Christopher Saul, Territory Sales Lead for East Africa at Red Hat.

Kenya’s financial services sector is in constant flux thanks to the adoption of new technologies and state-of-the-art consumer and business solutions. 

The era of cloud computing marks a turning point in terms of digital and computational capabilities, enabling both legacy institutions and fledgling start-ups to innovate and align their strategies to a digitally oriented market.

Fintech revenue in Africa leads the rest of the world, with predictions that the market will be worth around $65 billion by 2030. 

Kenya is one of the countries propelling that growth, but it can only continue to do so with strategic planning and digital infrastructure, specifically infrastructure that reflects and reinforces the critical attributes of consistency, compliance, and security. 

All of these are possible with the power of the cloud and enterprise IT platforms that let developers and innovators build the systems and deliver the products and services of tomorrow.

The three big IT challenges for fintechs

Thanks to several key trends such as the expansion of network coverage and smartphone ownership, Kenya’s fintech sector is delivering significant value to its customers. That said, to achieve long-term sustainability, fintechs need to overcome several key IT challenges:

• Scalability: Though there have been significant gains in access to infrastructure, organisations still need systems that let them scale their IT according to their needs as well as market demand.
• Compliance: Branching out of Kenya and into neighbouring regional markets, organisations may encounter contrasting regulatory circumstances related to offering financial products and services, and the handling of customer and business data, making it difficult to maintain continuity and compliance.
• Agility and flexibility: In a highly competitive market like Kenya, organisations need to be agile with their product strategy and be able to align with new customer and industry trends at a moment’s notice. A good example of this currently is the adoption of AI/ML technologies and whether fintechs can integrate them into their infrastructure.

Reshaping financial services, for customers AND developers

Digital transformation has led financial services providers to leverage new technologies that break down siloes and enable different software and systems to communicate with each other. 

Enter application programme interfaces (APIs), which are now the most critical tool for not just transforming the banking experience for customers in terms of speed and convenience but also for unlocking new opportunities for fintechs in terms of embedded finance and banking as a service.

The role of APIs in banking has shifted over the years. Initially used to comply with industry regulations, APIs are now leveraged to capture cost savings and deliver new value to the end customer. APIs enable organisations to open themselves up to the industry ecosystem that surrounds them. 

By making them available to partners and the public, organisations can develop and offer new products as well as enhance that overall ecosystem through collaboration and openness.

Of course, with so much potential with APIs, fintechs need a management platform that makes it easy to secure and control them, as well as lets them deploy repeatable integrations for multiple partners and service providers. 

Combined with a hybrid cloud application platform, management solutions can let fintechs and their teams take an API-first approach to building applications, enabling faster delivery, improved productivity, and system modernisation.

The power of the open cloud

With cloud computing now being the most essential technology for achieving business priorities, fintechs and financial firms need to adopt a cloud-first approach for application development – everything from online banking and deposit and payment systems to fraud detection and data pooling. 

The optimal cloud strategy is a hybrid one, where organisations can develop and deploy applications across a wide range of infrastructure, including on-site, cloud, and edge. Importantly, hybrid cloud environments enable organisations to more easily address regulatory requirements for the markets they operate in.

An open hybrid cloud strategy also enables fintechs to enhance their operational resilience. Using consistent operating and application foundations that unify infrastructures, organisations achieve greater visibility and control of their resources wherever they are deployed. 

Furthermore, standardised development processes mean organisations can achieve consistency while retaining agility and flexibility.

Given the role that Kenya’s fintechs play in the greater economy and the sensitivity of the data they handle, they need to work with cloud and service providers that consider all variables. And, by staying consistent, they can help build an industry that is the envy of the world, characterised by innovation, compliance, and added value.