First comprehensive mapping of South African fintechs for national treasury

South Africa has a small but fast-growing fintech industry, presenting considerable benefits but also significant risks. The opportunities for fraud and cybercrime are increasing as digital channels and products expand.

The rapid adoption of new technology by financial service providers can also introduce systemic risk when the technology fails. Financial regulators are therefore faced with the challenge of managing these risks in a way that does not significantly stifle innovation.

To enable the growth of the fintech sector while minimising risk and protecting consumers, the National Treasury, in partnership with The World Bank Group, commissioned Genesis to conduct the first full market diagnostic and sizing of the local fintech sector.

The analysis began by capturing all active fintechs in South Africa and segmenting these by function (e.g. payments). The fintech market size of each segment was then estimated and compared with the total segment size to understand its relative importance/influence. International trends and fintech business models were next assessed to determine the potential growth of each segment. A sample of fintech entrepreneurs was then interviewed to understand the journey, challenges the entrepreneurs encountered and their perceptions of the regulatory environment.

Using this as an input, the analysis then focused on financial services regulation in South Africa and presented priority segments that needed immediate attention. The report concluded with recommendations on how regulators could support the fintech sector.

An online portal was created to not only display the results of the report, but engage with fintech entrepreneurs by allowing them to edit their information (e.g. company name and financial data) and submit themselves as a new fintech. This serves as a first step in understanding the fintech market in South Africa and increase stakeholder engagement, especially between regulators and fintechs.