The rise of FinTechs might be shaking up the banking sector in developed countries, but African banks are taking full advantage of this technological revolution.

This is according to Yves Eonnet and Hervé Manceron, co-founders of mobile digital banking platform provider TagPay.

On 25 September 2018 at the headquarters of digital transformation company one point, Eonnet and Manceron launched a book Fintech: The Banks Counter-Attack focused on the digital revolution.

TagPay used the opportunity to announce a partnership with one point to provide integrated digital solutions to banks globally.

"Africa is the Silicon Valley of banking," said the authors. "The bank of the future is being invented in Africa, and it is more agile and close to its customers."

In their book the authors show how FinTechs have been powerful tools for financial inclusion in sub-Saharan Africa.

"In a region where the population remains largely unbanked but whose growth in terms of access to smartphones is the fastest in the world (+ 350% increase between 2007 and 2016), digital banking is the solution to the shortcomings in traditional banking infrastructure," reads a statement issued by TagPay.

The second major observation of the book is that the popularity of digital banking solutions in sub-Saharan Africa makes the region a source of inspiration for the rest of the world.

"In terms of disruptive innovation, the weight of the installed systems is an obstacle that is always difficult to overcome. The lack of existing systems frees Africa from these constraints, allowing it to realise its financial inclusion projects. The continent is making a technological leap by deploying the digital bank to serve these new populations. This is how Africa has invented before our eyes the bank of the future. "

The regulation issue

Those who follow developments across Africa's FinTech ecosystem agree that regulation remains a challenge.

In early September 2018 the Governor of Kenya's Central Bank Patrick Njoroge sent out a warning to digital lenders he claimed continue to operate illegally that they would "soon be regulated."

Daniel Szlapak, Director for Africa at Branch International, said digital mobile lenders are not averse to regulation "if done in a well-meaning structure."

Speaking at the recent Seamless East Africa conference, Szlapak said, "We only hear about regulation in the press but there is no structure for regulation. My dream is for the regulator to say 'let's talk about how we can regulate the FinTech sector'. That would be the ideal place to start."

"There are a number of regulations that are happening in Kenya: there is the rate capping, the data protection and others. But we have never been invited to comment if interest rate caps work, how should we regulate the sector or what are our recommendations," he added.

Brian Kalule, partner at Bowmans Uganda said financial technology is flourishing in Uganda, thanks partly to the enormous popularity of mobile money and payment systems and partly to the hands-off approach of the country's regulators.

"Although regulation does exist, it applies only to certain areas of the FinTech market and even in those areas, it tends to be loosely applied. For example, mobile money guidelines were introduced in Uganda in 2013 but are not binding. What's more, these (non-binding) guidelines apply to some players in the mobile money space but not to others. Those who provide digital wallets are not affected. On the other hand, those who provide the platforms for these services are."