The relationship between conventional banks and fintechs is complex and contested in most markets in Africa.
Increasingly, fintechs have the technical and financial muscle to build businesses that can scale rapidly across markets and enter more markets than banks. As banks continue to make significant investments across their operations span, a unicorn fintech may have considerably deeper pockets for niche businesses.
This project sought to identify opportunities for such partnerships for one of Africa's larger retail banks. It involved mapping the fintech landscape across the continent, identifying the individual partnership needs from the perspective of the bank and the fintech, and identifying profitable cooperation arrangements that would create value for both partners.
One of the challenges that the project sought to overcome was the relationship of banks with national-level operations, and operating models and fintechs with Pan-African aspirations, and seeking partnerships that would cover most countries on the continent.
The project highlighted the trade-offs between the regulatory and balance-sheet support the banks can provide to fintechs, the risk that needs to be managed in a fintech partnership, and the integration challenges when many country operations are involved.