Financial services

Our Financial Services team has completed more than 500 projects across sub-Saharan Africa and the Middle East since 2001. We help leading financial institutions address their challenges, unlock value for their stakeholders and develop strategies to compete in a fast-changing sector. Our team understands the evolving technology and market structures, economics and regulatory trends across all segments of the financial services sector in Africa.

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Expertise Areas

Strategy

Genesis has provided strategy support to financial institutions across Africa and the Middle East for more than 20 years. Rooted in our strong economics background, our approach to strategy development is classical in orientation, taking into account industry and market structure, competition and value chain analysis.

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Financial institution expertise


By working together with our clients to understand their unique contexts by applying our industry expertise and experience, Genesis delivers practical and valuable advisory services.

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Market analysis and positioning

We have extensive expertise in conducting market analysis and positioning across a number of financial sectors in Africa and the Middle East. We work with our clients to understand industry dynamics and ascertain the relative position of competing businesses. Our approach focuses on understanding supply-side and demand-side issues to uncover potential gaps which our clients can then use in developing strategies to unlock value.

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Business and operating models

The complexities of doing business in Africa are stark in financial services. Faced with rapid technological change, growing competition from non-financial service providers, shifting national policy and regulation, and significant economic headwinds, retail banks and insurers have to work hard to create value for their stakeholders. A key to unlocking this value is to apply structured thinking to what business and operating models are best suited to the African context.

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Risk management

The ever-increasing volatility and complexity around financial markets have created ongoing downside risk for financial institutions. Without a strong understanding of the risk factors, combined with robust methodologies on how to manage them, financial institutions are virtually guaranteed to lose money,

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Financial inclusion

Hundreds of millions of people across sub-Saharan Africa lack access to basic financial products and services, including savings, credit and insurance. Lack of access to financial services is particularly acute among the poor, among women and among those living in rural areas where the reach of traditional financial channels has historically been limited.

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Transaction advisory (corporate finance)

Our corporate financial services advisory service spans the full investment cycle, from capital raising and investment advisory through to strategic interventions with portfolio companies to deliver value to all stakeholders.

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Monitoring and evaluation

Genesis provides a full range of monitoring and evaluation services that include the design, review and support of M&E systems and evaluations of programmes, strategies and policies. Our aim is to inform the design, management and allocation of funds to generate better decisions and outcomes, as well as to provide greater value for money.

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Financial Sector regulation

Extensive regulatory oversight is a key feature of a number of critical sectors such as energy, telecommunications, water, healthcare, financial services and broadcasting.

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Competition economics

We offer clients a comprehensive range of expert economic services in the area of competition law, and remain the provider of choice for most top law firms when they need to retain expert economists to advise on critical matters. Our application of rigorous economic analysis, using quantitative and conceptual approaches, has resulted in blue-chip companies across Africa routinely relying on us for expert advice and support when they interact with competition authorities.

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Applied behavioural economics

Behavioural economics is essentially a science that centres on studying how contextual factors affect human decisions. Our Applied Behavioural Economics team specialises in understanding why customers behave in the way they do and uses a set of tools to improve their decision-making.

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Digital

At Genesis we provide digital strategy support and advice to our clients looking to embark on a transformation journey, enter new markets with a digital proposition or optimise their existing strategy through better use of digital analytics.

We have a broad understanding of fintech innovation and keep abreast of developments across the financial service core competencies. These include payments, lending, deposit taking, investments, and wealth management and capital markets.

We have advised a number of financial institutions on their digital transformation journeys and have contributed to how policymakers can support and enable innovation that promotes improved access to finance while protecting consumers and ensuring the stability of the financial services sector.

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Projects

Helping South African bank to keep up with digital innovation

Project name:
Future of payments project

Service:
Strategy
Business and operating models
Digital

Sector:
Financial services
Payments

Area of Expertise:
Market analysis
Segmentation
Competitive positioning
Customer value proposition (CVP) development and execution
Digital transformation

Client:
Large South African bank

Date:
2017

Country:
South Africa


The growth in non-cash payments has increased the revenue potential of the payment sector, making it one of the high-stakes sectors in financial services.

Until recently, banks were dominant but new players have successfully challenged this dominance. From MNOs to fintechs to third-party payment processors, increased technology has intensified competition. Improved speed, ease, security and cost of making payments are common in contactless payments to biometric authentication features, social-media payments and distributed ledger platforms.

Banks are faced with how best to respond to these developments. Genesis engaged with a large South African bank to create and maintain a market insights capability that would enable it to develop internal points of view on developments in the payments sector, allowing the bank to respond with appropriate short-term and medium-term strategies.

Genesis compiled a live database of developments within the payments sector and analysed them according to the payment flow, rail and theme. From this, we built a comprehensive as-is analysis of the payments space, identifying the ongoing technological developments as well as that of the competitors, both banks and other entities.

We formed our points of view on key issues that the bank needed to consider. These included, among others, the entry of Chinese payment giants into the South African market and innovations in the acceptance frontier. We outlined the main trends and analysed their impact, imminence and risk to the bank.

Our insights provided the bank with a comprehensive view of the trends and developments in the payments sector. Our recommendations included considerations for short-term tactical investments and also longer-term considerations of the direction of payments innovation.

Our insights were presented to the senior management and key stakeholders of the bank. These formed the basis for discussion on appropriate strategies the bank should take regarding its payment services and product offerings.

A winning strategy for deepening financial markets in Uganda

Project name:
FSD Uganda strategy refresh

Service:
Strategy
Financial inclusion
Digital

Sector:
Financial services

Area of Expertise:
Market analysis and positioning
Fintech market enablement

Client:
Financial Sector Deepening Uganda

Date:
2006 - 2018

Country:
Uganda


Financial-sector deepening aims to improve access to, and usage of, financial services that are instrumental in improving the livelihoods of vulnerable and poor communities. It is the objective of financial-market facilitators, set up as Financial Sector Deepening (FSD) Trusts, to be active in a number of African markets.

The FSD approach is unique in prioritising interventions that are systemic, i.e. self-sustaining shifts in the market system rather than supporting individual market actors that require ongoing support. FSDs work at the “macro” level to create an enabling regulatory environment, at the “meso” level to improve financial and digital market infrastructure and information, and at the “micro” level to pilot and diffuse innovative financial-service models into the market.

Market facilitation is challenging for a number of reasons. It requires a large amount of information to ensure that interventions are targeted at the binding constraints preventing financial-sector deepening at each “level” of the market. These interventions also need to be targeted because market facilitators invest heavily in relationships to influence key market actors, and this requires time and committed resources. Lastly, market facilitators need to show that these targeted interventions do result in systemic change. The ultimate beneficiaries are the same groups of vulnerable consumers whom donors (who control much of development funding) care about. Genesis has partnered with FSD Uganda (FSDU) over the last two years to assist it with these three key challenges.

Our partnership began at a point where FSDU required a re-invigorated approach to facilitating financial-sector deepening in Uganda. We developed a vision and definition for financial inclusion in Uganda, reviewed the state of barriers to access and usage of financial services, identified key technology trends likely to reshape the prospects for financial inclusion in the coming years, and identified a high level list of strategic initiatives that FSDU should engage in to facilitate systemic change. This helped FSDU with the first challenge – ensuring that interventions are targeted at the binding constraints for specific beneficiaries.

We then helped FSDU develop a refreshed strategy for the next three years. We spent time with the FSDU team to understand its planned interventions, and engaged extensively with market actors in Uganda to test which of these interventions were likely to generate systemic change. The outcome was a concise and well-evidenced strategy document that provided FSDU with a clear vision and three workstreams that focused interventions at all levels of the market on generating impact on target beneficiaries. This helped FSDU with the second challenge – targeting interventions and resources where it can make the biggest impact.

With a refreshed strategy, we then assisted FSDU with a critical part of strategy execution related to fundraising. We helped FSDU develop a funding application for the Gates Foundation on the basis of the revised strategy document. We also developed a new fundraising strategy which helped FSDU identify new potential funders aligned to FSDU’s strategic priorities and provided actionable initiatives for FSDU to increase its presence in the donor market. This assisted FSDU with the last challenge – communicating the value of its work to secure donor funding.

Plan to leverage bank’s investment in modern payments system

Project name:
Digitisation catches up to wholesale banking

Service:
Strategy

Sector:
Financial services
Corporate and Investment Banking
Payments

Area of Expertise:
Market entry and growth strategy
Strategic planning

Client:
Large multinational bank

Date:
2019

Country:
South Africa


A wholesale payments capability is a core component of a corporate banking proposition. It provides corporate and institutional clients with solutions that facilitate payments to suppliers, collect funds from customers, and optimise their cash and liquidity positions.

The economic environment has put pressure of net interest income and banks are increasingly looking at growing fee-generating parts of the business. Corporate clients, through their experience as retail banking customers, have changing expectations and wholesale payments are increasingly under pressure to catch up with payment innovation prevalent in retail payments.

Genesis was appointed by a large multinational bank to develop a business strategy for the domestic wholesale payments business unit that would leverage the bank’s strategic investment in a modern payments architecture.

The analysis began by conducting a comprehensive review of international trends in wholesale payments to identify the key drivers for change: changing customer expectations, technology innovation, regulation and globalisation. An in-depth analysis of payment regulation provided a framework for where to prioritise innovation.

An in-depth review of the bank’s revenue from the various payment service lines was conducted to highlight key areas of concern and growth for the bank. The analysis provided flags for areas of risk and concentration. The analysis also evidenced areas of strength, which the bank could leverage to grow revenue.

Following the research phase, the team worked closely with the client to define the business vision and mission; guiding principles; and to understand the current capabilities and contrast this against the systems potential to identify gaps. Using the research as an input, the team was then able to develop initiatives to help the business achieve the strategy. The final outcome was the development of a tool that scored the relative importance of each initiative against a set of qualifying criteria to develop a prioritised road map.

Mapping out path for local card-processing in SA

Project name:
South African card switch strategy

Service:
Market analysis and positioning
Strategy
Digital

Sector:
Financial services
Payments

Area of Expertise:
Digital payments

Client:
Bankserve

Date:
2016

Country:
South Africa


South Africa is unusual in having a domestic payment switch that can process domestic card transactions in addition to the global processing schemes (Visa and MasterCard). This brings a number of unique benefits: South Africa’s payments system maintains an element of sovereignty, protected from political fluctuations elsewhere, and the global processing schemes’ prices can be benchmarked against a local processor.

However, South Africa’s domestic payment switch, BankservAfrica (Bankserv), is under increasing pressure from the global processing schemes. With the rise in digital payment innovations, banks typically move large portions of their card-processing to Visa or MasterCard to access these digital innovations.

Genesis partnered Bankserv to address this competitive pressure and determine how to continue providing card-switching services to the South African market. We worked closely with Bankserv and an international payments consultancy to extensively scope the domestic payments landscape, in particularly estimating the probability of cash and EFT being substituted for card payments in the future.

We then helped Bankserv understand its vulnerability to losses in card volumes by conducting a scenario analysis and a volume-based cost reallocation. This provided Bankserv with the minimum processing volume it would need for the business to remain sustainable and highlighted how changes to the card business would impact the cost of processing all other products.

Given the findings from the analysis, Genesis developed a number of strategic options for Bankserv to consider. The options included maintaining the current business model, with a few enhancements; pursuing a strategy to facilitate innovation across the network; or exiting and selling the card-processing business. The options were not mutually exclusive and each option was assessed against a number of criteria to understand which could be practically implemented.

The analysis and recommendations were presented to the executive committee. It resulted in Bankserv beginning a consultative process with its shareholders to understand how best to shape its card business to meet the needs of the South African market and maintain the benefits of domestic card-processing.

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Making Botswana an investment gateway to Africa

Project name:
Supporting the development of Botswana as an international financial services centre

Service:
Market analysis and positioning

Sector:
Financial services
Capital markets

Area of Expertise:
Market analysis
Segmentation
Competitive positioning
Customer value proposition (CVP) development and execution

Client:
Global asset management company

Date:
2015 - 2016

Country:
Botswana


Channelling capital flows to Africa is essential for the continent’s development. International financial centres (IFCs) facilitate this and provide income and employment opportunities.

For this reason, Botswana established its International Financial Services Centre (IFSC) in 2003. The tax and regulatory incentives offered to investors were an important step towards developing an IFC, but Botswana faced stiff competition. The IFSC attracted only a handful of large companies compared with the size and gravitational pull of the incumbent financial centre in Africa, Mauritius.

Genesis partnered with a global asset management company to diagnose why the IFSC had not developed into a global financial hub and how to rectify this. We leveraged our understanding of how IFCs evolve – investors choose a location with a competitive and credible tax and regulatory offer and with a strong network of support services. 

These factors intersect to attract a critical mass of investors to the IFC. This creates a gravitational pull which attracts more investors and support services and establishes the IFC’s credibility, creating a virtuous cycle. 

To understand why most investors were choosing Mauritius over Botswana, we conducted extensive interviews with investors, tax lawyers, fiduciary service providers and policy-makers in South Africa and Botswana. The IFSC’s tax and regulatory offer was found to be less competitive than that of Mauritius. There was uncertainty regarding the treatment of investors and the guarantee of IFSC incentives. Botswana also lacked a large network of support services.

We identified that Botswana’s government had a choice: an opportunity to develop the IFSC into a global financial hub, but at significant costs. Achieving this will require more than matching Mauritius’s offer and making it credible – the IFSC will have to carve out a niche identity which establishes a distinct advantage over Mauritius. Choosing this path requires balancing the benefits of achieving true IFC status against the costs of establishing this distinct advantage. 

Genesis developed a roadmap detailing the steps Botswana required to match the Mauritius offer; establish this offer’s credibility, and leveraging Botswana’s proximity and ties to South Africa. The plan was presented to the president and his cabinet where the government affirmed its commitment to developing the IFSC. Botswana’s Investment and Trade Centre has adopted the roadmap.   

Business case for new retail bank in South Africa

Project name:
Building a new retail bank

Service:
Business and operating models
Digital

Sector:
Financial services
Retail banking

Area of Expertise:
Operating model design
Business model advisory
Digital transformation

Client:
Confidential

Date:
2013, 2016

Country:
South Africa


Genesis partnered with a JSE-listed South African financial services provider to develop a business case for specialist banking services to the business and personal market.

The client already possessed many of the capabilities required for a retail bank but faced multiple challenges such as the lack of a core banking system and a physical distribution network, which have historically dominated the face of retail banking in South Africa. In order to address the capability gaps that were identified through a detailed capability mapping exercise, the Genesis team identified technological solutions that address the constraints.

The design of the value proposition was informed by the client’s vision of building a low-cost, high-touch-and-feel bank for its target customer base. Then, in order to identify suitable technologies through which to implement this vision, the team conducted a detailed assessment of the bank’s target market segments. Using this methodology, we obtained a good understanding of client behaviours and attitudes to using digital channels as opposed to physical infrastructure.

As the client’s objective was to develop a bank from the ground up, the team proposed an operating model that would overcome many of the challenges related to organisational and product silos faced by incumbent banks, which often result in conflicting interests. Building a robust operating model fully supported by technological choices such as the core banking system was therefore identified as a key success factor for this client.

The outputs presented to the group CEO were well received. These are informing the client’s market entry strategy and Genesis conducted further work in 2016 on delivering a new technologically driven retail bank.

New costing model for top-tier SA bank

Project name:
Operational Shared Services (OSS) cost-recovery model for a top-tier bank

Service:
Financial institution expertise

Sector:
Financial services
Business Banking
Corporate and Investment Banking

Area of Expertise:
Financial modelling

Client:
Confidential

Date:
2016

Country:
South Africa


A top-tier South African bank, under increasing cost pressure, needed to relook at the costs of its shared services and the allocation methodology.

The Genesis team developed a revised cost recovery model for the division. The model enabled operations and product management to immediately understand their costs better, to take control of their costs and make informed business decisions.

We provided an assessment of current and new allocations which made sense to operations and to the business, and between businesses where some of the products’ costs went up while others went down.

Through the analysis of available data and drivers of cost recovery, the team built a new cost-recovery model on activity-based costing principles. In this way, Genesis was able to identify opportunities to become more efficient as well as create accountability and transparency in the recovery of cost.

Through constant engagement with the finance, costing and business departments during the process, we ensured that the revised model was accepted as best for the bank. The new costing model will be implemented fully in the new financial year with revised estimates taking into account adjustments this year.

Unlocking competition in digital finance in Africa & Asia

Project name:
Unlocking competition in digital finance

Service:
Financial inclusion
Competition economics
Digital

Sector:
Financial services

Area of Expertise:
Digital transformation
Fintech market enablement

Client:
Confidential

Date:
2015 - 2016

Country:
Bangladesh
India
Kenya
Nigeria


Genesis was commissioned to study impediments to more effective competition in mobile money markets in four markets – India, Bangladesh, Kenya and Nigeria. The explosive growth in mobile money in a number of countries has made a key contribution to providing the poor with access to financial services.

At the same time, in some of these markets, the presence of dominant providers, inappropriate regulations, and other problems may prevent effective competition, to the detriment of consumers and to innovation.

The purpose of the study was to provide the client with insights into (i) potential regulatory or market-based solutions to identified problems; and (ii) how these might be promoted to improve competitive outcomes for consumers of digital financial services (“DFS”).

The team conducted the study by utilising four main tools i.e.:

  • A competition policy framework based on economic theory
  • An extensive literature review on DFS, payment systems, competition and regulation issues in network industries, and also in multi-sided platform industries
  • Stakeholder engagements in the four countries, i.e., DFS/MFS providers, regulators, banks and mobile network operators (MNOs)
  • Internal financial sector expertise and knowledge provided by the project leader, Richard Ketley.

In addition to various country-specific recommendations, Genesis identified the following cross-cutting priorities:

  • That appropriate regulation is required for USSD pricing. Cost-based pricing of USSD is a critical enabler of competition.
  • Regulators should drive full interoperability between competing MFS platforms
  • Regulatory capacity building is required at the interface between competition law and payment systems regulation to develop the pro-competitive regulatory approaches in future.

The findings of the report are that environments in which mobile network operators are able to offer mobile financial services, and there is a dominant player in the data and voice market, the potential for network effects to give the dominant provider market power is high.

This market power can be offset by appropriate regulatory interventions. It is less clear that these interventions will drive down the price of the services given demand elasticities for different product types.

Business model for e-wallet customer payments

Project name:
Licence application and business model for an e-wallet and peer-to-peer lender

Service:
Business and operating models
Digital
Regulatory economics and accounting

Sector:
Financial services

Area of Expertise:
Fintech market enablement
Digital transformation

Client:
A large provider of online retailing and services

Date:
2014

Country:
Nigeria


Genesis was commissioned by a large provider of online retailing and services to examine the regulatory regime of Nigeria, with respect to the launch of an e-wallet for customer payments and the launch of a peer-to-peer lending service.

The project involved the development of a detailed business plan for each business, and an assessment of the licensing options available for each business, as well as a review of the regulatory model that is evolving globally with respect to peer-to-peer lending.

Following the advice of the consultants, the business model was reconfigured to take advantage of the card eco-system which would reduce the complexity of operations and the need for additional licences.

Sizing Africa’s Vehicle and Asset Finance (VAF) market

Project name:
Sizing Africa’s Vehicle and Asset Finance (VAF) market

Service:
Market analysis and positioning

Sector:
Financial services
Retail banking
Corporate and Investment Banking
Business Banking

Area of Expertise:
Market analysis

Client:
A large Pan-African bank

Date:
2015

Country:
Angola
Botswana
Ghana
Kenya
Mozambique
Namibia
Nigeria
Tanzania
Uganda
Zambia


A large Pan-African bank approached Genesis to conduct a market-sizing exercise for vehicle asset finance (VAF) across its operations in 10 countries encompassing personal, business and commercial vehicles.

The research focused on a macroeconomic analysis of the 10 countries and the trends that may influence VAF in the future. It also focused on a review of both sector and industry developments to identify opportunities for growth.

A market-sizing exercise was then conducted using import data, regulator information, client data and industry association data. The report also estimated the client’s potential market share based on the trends and gaps in the asset finance market. 

The client used the research to develop its Africa go-to market strategy for VAF products.

Meet the Team

Areas of Service Expertise

  • Strategy
  • Financial institution expertise
  • Market analysis and positioning
  • Business and operating models
  • Risk management
  • Financial inclusion
  • Transaction advisory (corporate finance)
  • Monitoring and evaluation
  • Financial Sector regulation
  • Competition economics
  • Applied behavioural economics
  • Digital

Related Sectors

  • Retail banking
  • Corporate and investment banking
  • Business banking
  • Capital markets
  • Payments

More information about our practice

Our Financial Services Strategy practice was established more than 15 years ago by Richard Ketley, who is widely recognised as a leading expert on the financial services sector in Africa. The practice is made up of around 20 consultants with backgrounds in financial services and consulting.







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Projects

Project

Helping South African bank to keep up with digital innovation

Genesis engaged with a large South African bank to create and maintain a market insights capability that would enable it to develop internal points of view on developments in the payments sector, allowing the bank to respond with appropriate short-term and medium-term strategies.

View Project
Project

A winning strategy for deepening financial markets in Uganda

Genesis Analytics have been working with Financial Sector Deepening (FSD) Trusts on a number of projects. FDS commissioned Genesis first to re-invigorate their approach to facilitating financial-sector deepening in Uganda. We then helped FSDU develop a refreshed strategy for the next three years and then assisted them with a critical part of strategy execution related to fundraising.

View Project

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Leading the team

Richard Ketley

Director and Managing Partner (Financial Services Strategy)

Richard Ketley
Director and Managing Partner (Financial Services Strategy)
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Bavani Naidoo

Partner (Financial Services Strategy)

Bavani Naidoo
Partner (Financial Services Strategy)
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