[Africa Cloud Review] Simon Ngunjiri: Africa is suited to jump to the cloud more than its peers

The speed at which Africa’s business sector has changed over the past year has been nothing short of astonishing. Business leaders have had their hands full, from enabling remote work on a previously unprecedented scale to adapting to disruptions among many other things. At the center of this change is cloud.

Before the pandemic hit, a number of businesses in Africa were at different stages of their cloud strategies, whether that meant moving their email server to the cloud or upgrading to Google cloud or Microsoft 365. This process has been accelerated as many workers were forced to work remotely.

According to a Synergy Research Group survey, which we wrote about in our last cloud review column,  spending on cloud infrastructure bypassed spending on data center hardware and software for the first time in 2020 . This study shows that spending on cloud infrastructure services (PaaS, IaaS, and hosted private cloud combined) grew by 35 per cent to reach almost $130 billion in 2020, while spending on data center hardware and software dropped more than 5 percent to less than $90 billion over the same period.

Cloud adoption—including hybrid and multi-cloud adoption—is expanding fast among both private and public sector organizations of all sizes.

At the enterprise level, consulting firm BCG estimates that two-thirds of companies globally already use multiple clouds. It predicts that by 2025, up to 60 per cent of consumer-facing applications, almost 40 per cent of data warehouse and analytics workloads, and more than 30 per cent of core business applications will be running on public clouds operated by the likes of Amazon, Google, and Microsoft. Traditional on-premises technology will handle no more than a third of these workloads.

In Africa, the continent has been suited to jump to the cloud more than its peers. 

”If you look at Africa from an economic development standpoint, you would be quick to assume the continent is not geared up to take advantage of the latest trends in cloud technology. But you would be wrong. ” Winston Ritsonthe Group Head for Cloud Services at Liquid Intelligent Technologies.   says in an OP ED published last week. 

Winston notes that international investors are clamoring to the front of the investment line to fund a boom in the African Cloud Computing market. 

”The proliferation of smartphones, mass adoption of business software and general economic growth prospects have seen a great demand for data centers to be built within continental borders. A young mobile population is driving end-user demand and the potential for the next Cloud boom,” he says.

In the news

Last week, Liquid Intelligent Technologies creates direct access to USA internet resources via a new POP connection to Miami. The new POP is connected to Liquid’s 100,000km of fiber across 11 countries on the continent and another 14 countries via the Operators Alliance Program and Liquid Satellite Services. This results in customers being able to leverage a better connection to the US, giving them access to Cloud services, OTT resources, Internet content and high-quality voice and video calls with family and business partners.

A South African financial institution also partnered with Sapiens on Cloud-Hosted Bancassurance solutions. The financial institution will implement Sapiens’ cloud-hosted, IDITSuite for short-term insurance and Sapiens Intelligence, with the help of Sapiens Managed Services.

Google Cloud and SAP  announced an expanded strategic partnership to help customers execute business transformations, migrate critical business systems to the cloud and augment existing business systems with Google Cloud capabilities in Artificial Intelligence (AI) and Machine Learning (ML).

Simon Ngunjiri Muraya is Google Cloud Architect at  Incentro Africa.

Nokia makes scholarships pledge of underrepresented communities in technology

Nokia announced the launch of a scholarship program aimed at providing greater opportunities for underrepresented communities in the technology industry. Working together with online learning and talent transformation platform Udacity and Blacks In Technology (BIT) Foundation, Nokia will offer over 300 scholarships, with a focus on empowering students and career changers from underrepresented communities.

The fully funded scholarships cover a range of core tech competencies, from cloud computing and programming to artificial intelligence and data science, and are available from introductory to advanced levels. The successful candidates will be able to select courses on topics such as AI Programming with Python, Java Programming, Data Structures and Algorithms, Intermediate Python, and Cloud DevOps Engineering.

The courses will be provided by Udacity, whose Nanodegree® programs are fully online and designed to be completed alongside further studies or full-time work, making them accessible to anyone regardless of their position or profession. Scholarships are open to applicants based anywhere in the world, to both students and industry professionals who wish to further develop their technology skills.

Scholarship recipients will also have access to support and networking provided by the BIT Foundation, including mentorship, tutoring, and post-completion career support resources. Nokia will also work closely with its African-American employee resource group ABLE (Advancing Black Leadership and Excellence) to further promote the initiative.

“We are committed to creating technology that helps the world act together, but to do so, the technology industry must reflect the world around us,” said Karoliina Loikkanen, Global Head of Sustainability at Nokia. “This initiative further expands our activities to drive greater inclusion and diversity through concrete actions that provide opportunities to underrepresented communities and individuals, irrespective of background or ethnicity. Education forms a key part of this. Diverse businesses are shown to perform better, and we intend to encourage students who successfully complete one of the programs to apply for positions within Nokia.”

“Education is one of the most important ways for us to help remove the barriers to diversity in tech. By providing access to resources that are designed to nurture and develop people’s skills, we can help get more Black talent into the technology space,” said Dennis Schultz, Executive Director at the BIT Foundation. “We are pleased to see major industry players like Nokia stepping up to the plate with Udacity and addressing the issue head-on in order to drive forward digital transformation and improve much-needed Black representation in tech.”

“We have joined forces with Nokia and Blacks In Technology Foundation because we believe that it is vital to continue to create opportunities for underrepresented groups to build careers in the field of technology,” said Gabe Dalporto, CEO at Udacity. “Democratizing access to digital skills training will create life-changing opportunities for people, and these scholarships will ensure we continue to take measurable steps to increase the participation of Black people in the technology sector.”

Applications are now open. For more information about the scholarship program and how to enter, visit: https://www.nokia.com/about-us/sustainability/improving-lives/tech-and-underrepresented-communities/

www.nokia.com

[Africa Cloud Review] Simon Nguniri: Kenya’s Data Center Market Size by investment is set to Reach $342 Million by 2026

Kenya is witnessing the growing adoption of digital services such as cloud, big data, and IoT driving the demand for data centers in the region.

Kenya’s data center market is set to grow at a CAGR of 12.36% during 2021-2026. This is according to the “Kenya Data Center – Investment Analysis & Growth Opportunities 2021-2026” report released this week.

The report notes that  the data center market in Kenya includes around six unique third-party data center service providers operating around nine facilities. 

Kenya is one of Africa’s primary data center hubs and is considered the gateway to the East African region. Nairobi, the capital city, is a favorable location for data center development. In Kenya, Unaitas Sacco, a financial firm, selected Eastra Solutions for installation and commissioning services to Unaitas Data Center. Atos is investing in the development of a new data center facility in Kenya with around USD 260 million investment at the Mwale Medical and Technology City (MMTC) in Butere, Kakamega County.

Icolo.io which is among the top data centers investors in Kenya recently announced the construction of its third data center in Kenya to be located in Nyali, Mombasa. Called MBA2, the new data center is expected to be completed in Q1 of 2022 and set to provide an estimated capacity of 1.6MW megawatt and 1,200 square meters of IT space. 

Other key investors include IXAfrica, PAIX, Teraco Data Environments, and Wingu.

Other tech giants like Huawei Huawei Technologies is among the leading vendors in the modular data center space with multiple efficient and reliable deployments. All the vendors the report notes have taken precautionary measures to reduce disruptions in their supply chain operations. The most commonly adopted servers in the industry include rack and blade servers from Cisco Systems, HPE, Dell Technologies, IBM, and Lenovo.

Data centers are being utilized now more than ever according to Carol Koech is the Country President for Schneider Electric East Africa. Data spending is also going up with Gartner estimating that end-user spending on global data center infrastructure is projected to reach US$200 billion in 2021, up 6% from 2020. The landscape in East Africa is no different. In Kenya for example, the country has a total number of 43.7 million Internet/data subscriptions according to the Communication Authority of Kenya; this coupled with the country’s youthful demographics means that data demand will rise rapidly, which will require more data centers. And we can already see investments in this space.

Across Africa, the continent accounts for less than 1% of the world’s co-location data centre supply, with South Africa accounting for the bulk of the continent’s capacity. Co-location facilities rent space, power and cooling to enterprise and hyperscale customers; they also offer interconnection enabling businesses to scale at low complexity and cost.

Nina Triantis, Global Head of Telecoms, Media & Technology at Standard Bank notes that we should expect to see a substantial wave of data centre investments materialise across the continent, led by regional economic powerhouses including South Africa, Kenya and Nigeria.  

Simon Ngunjiri Muraya is Google Cloud Architect at Incentro Africa.

[Africa Cloud Review] Simon Ngunjiri: Moving to the cloud is the key to succeeding in the digital era

Moving to the cloud is the key to succeeding in the digital era. Many business leaders in Africa are making this move to improve security, flexibility, and agility whilst others are doing it to keep relevant and productive, ultimately with the bottom line in mind.

Before the pandemic hit, businesses were at different stages of their cloud strategies, whether that meant moving their email server to the cloud or upgrading to Google cloud or Microsoft 365. This process has been accelerated as many workers were forced to work remotely.

According to a Synergy Research Group survey, spending on cloud infrastructure bypassed spending on data centre hardware and software for the first time in 2020. This study shows that spending on cloud infrastructure services (PaaS, IaaS, and hosted private cloud combined) grew by 35 percent to reach almost $130 billion in 2020, while spending on data centre hardware and software dropped more than 5 percent to less than $90 billion over the same period.

An increasing number of African businesses are reaching a pinnacle of their digital transformation journeys with most of their IT already running in the cloud. However, it’s not only about having a cloud strategy but rather knowing how to use the cloud to its full extent to propel a business into the future. Cloud is giving organisations the ability to simplify and scale their systems landscape without sacrificing performance.

With this in mind, a number of cloud providers have been trying to set base in the continent. Recently, Zadaraannounced Africa’s largest network of interconnected, carrier-and cloud-neutral data center facilities, Africa Data Centres, and service provider Global Sense deployed Zadara’s edge cloud services to their marketplace.  In South Africa, HUAWEI opened applications for its Women4Tech digital training programme. The free online course is open to savvy, tech-forward women entrepreneurs, and aims to advance their skills and help them use new technologies like Cloud Computing  to grow, improve and digitise their businesses.

At the same time, Google Cloud also appointed Niral Patel as Regional Director for Sub-Saharan Africa. Patel will be based in Johannesburg and will be responsible for leading Google Cloud’s business across Sub-Saharan Africa region. 

As we have mentioned in a previous column, with cloud-enabled intelligent enterprise capabilities, organisations can achieve the speed needed to stay ahead of competitors and other disruptors while maintaining the certainty of measured, data-driven decision-making.

Simon Ngunjiri Muraya is Google Cloud Architect at Incentro Africa.

Digital Transformation a Real Opportunity For Inclusive Growth in Africa, SAS

The digital economy, and with it an increasing demand for the Fourth Industrial Revolution (4IR) skills identified by the World Economic Forum in 20161, is here. And while there can be no doubt that digital transformation presents a massive opportunity for economic growth in Africa, it is critical to ensure that this growth is inclusive – and that it benefits women’s equality in the workplace, rather than harming it.

In context, according to the final draft of the ICT and Digital Economy Masterplan for South Africa2, anecdotal evidence suggests that South Africa’s digital economy is growing and contributing anywhere between 2% and 19% to the country’s GDP. Globally, the digital economy is expected to grow to 24% of the world’s GDP by 2025.

“This growth represents both challenges and opportunities for workers. Digitalisation means that, worldwide, women and men in low-skilled, routinised employment face a similar scale of potential job losses, while those in higher-skilled roles face similar gains. The key to realising these gains, at least for skilled women, is digital fluency,” says Leanne Gordge, Manager: Banking, Telco and Public Sector, SAS in South Africa.

Affirming this; an Accenture report released in 20163 stated that: “At the current rate of digital adoption, developed nations likely won’t achieve workplace gender equality until 2065, and developing nations until 2100. But if governments and businesses can double the pace at which women become frequent users of technology, we could reach gender equality in the workplace by 2040 in developed nations and by 2060 in developing nations.”

“If this 40-year reduction in time to achieve gender equality is to be realised, women will need to be skilled, mobile, and tech-savvy. It is, therefore, critical to encourage and develop digital fluency from an early age for girls. However, there are still challenges to overcome in girls’ education, especially in Africa, to achieve this,” adds Gordge.

For example, the Girls’ Education and Climate Challenges Index, which SAS built with Malala Fund4, identifies countries where girls are most at risk of experiencing educational interruptions and predicts lowering of completion rates of girls’ primary and secondary education due to climate change.

The Malala Fund’s report highlights that when natural disasters occur, young female students are often more at risk of educational disruption than their male counterparts. Similarly, when access to water is scarce, girls are most often responsible for travelling long distances to collect water, keeping them away from the classroom. And, when temperatures rise and income-producing agriculture is lost, girls most often leave their schooling behind because families can no longer afford to pay educational fees. Based on the combined indices, the region most affected is sub-Saharan Africa, even though this region contributes the least to climate change.

Melissa Jantjies, Business Solutions Manager: Advanced Analytics and Artificial Intelligence, for SAS in South Africa, adds: “Another concern lies in automation in productive sectors in Africa, where women’s employment is particularly at risk.”

According to a report compiled for the South African Institute of International Affairs (amongst others): “Studies show that in specific female-dominated industries, technology will reduce jobs. The other misgiving in Africa is that the 4IR, like its antecedents, will further entrench gender inequalities. This is based on the observation that most women are unlikely to benefit from technological advances, as they do not possess the skills to compete in the emerging knowledge economy.”5

Jantjies believes that to achieve the approximated 40-year reduction in time towards true gender equality and inclusive economic transformation, there needs to be far more collective focus from Governments, educational institutions and private sectors on twin goals.

“The first must be on collaborative special programmes aimed at encouraging more young girls and women to pursue their education and career in science, technology, engineering, and mathematics (STEM) fields. Women have a vital role to play in leadership – in all tiers of society – and in contributing to development and socioeconomic transformation of Africa’s economies. Yet, they are still significantly under-represented in higher education in STEM,” says Jantjies.

Certainly, this is a global issue, where women make up 43% of the world’s PhD graduates6, but only 28% of researchers in all fields and only 30% of women in higher education pursue STEM fields. However, in Africa, this under-representation is accentuated by prevailing challenges of educational gaps, skills mismatch, and high rates of unemployment.

The second goal, Jantjies believes, is upskilling and reskilling people for a digital-first and data-driven environment. “In many respects, the pandemic has accelerated digital transformation across numerous markets at a pace that previously may not have been conceivable. This has amplified challenges around skills shortages and mismatch globally – and coupled with remote working trends, it also means that people with highly sort after skills have more choice on where they want to live and who they want to work for. Together this is compounding the need to retain scares talent, while establishing special programmes to upskill and reskill people.”

“Interventions are needed to better secure talent pools, now and for the future. Clearly Governments, educational institutions and private sectors must make not only a concerted effort but tangible investment in ensuring young women have access to the digital economy if they are not to be left behind. We must ensure they know what skills are required to participate in the 4IR, how these can be applied in a variety of careers, and have access to learning opportunities and the technology needed to enter the digital economy,” concludes Gordge.

www.sas.com

eLearning Africa returns to Kigali with the theme of ‘A New Purpose for Education’

The Convention Centre in Kigali will be the setting for the next edition of Africa’s leading conference and exhibition on technology-assisted learning, bringing political leaders, investors and some of the world’s leading experts on education and technology to the Rwandan capital for three days of talks, workshops and a ministerial roundtable.

eLearning Africa’s founder and CEO, Rebecca Stromeyer, said that she hoped the conference would help to establish “a new purpose for education” by facilitating in-depth discussions on “what the world will be like after Covid.”

“The pandemic has brought about many changes, some of which will be permanent,” she said. “Now we need a real focus on adaptability, resilience and sustainability in education. And we need an African agenda – not just for Africa itself, but because Africa has so much to teach the world.

“African experience and traditions, such as ‘ubuntu’, will enjoy a new relevance. Equally, African ideas of community and partnership with nature could soon mean that Africa is increasingly recognised as a resource of knowledge, experience and education for the whole world.”

The conference, which will have ‘A New Purpose for Education’ as its main theme will consider issues including:

  • the challenges facing African countries in the aftermath of the pandemic
  • the suitability of global models in the African context
  • how to redirect education to meet African countries’ future needs
  • using technology to enable African countries to respond to specific needs in context
  • the single African market and the opportunities and requirements of employers
  • Africa’s contribution to global learning and problem solving

Featuring plenary sessions, seminars, workshops, debates and discussions, eLearning Africa will be accompanied by a major exhibition, showcasing some of the latest EdTech technologies and solutions. The conference will take place from 11 – 13 May, 2022 at the Kigali Convention Centre in Rwanda.

“I am delighted that eLearning Africa is back on the road and returning to the splendid, state-of-the-art conference centre in Kigali,” said Ms Stromeyer. “It has been a long wait but I hope this conference will show it has been well worth it. It will be wonderful to see the eLearning Africa family – our amazing network of experts, solutions providers, managers and investors – back together again for what will be the most important programme of discussions in our history.”

Founded in 2005, eLearning Africa is the leading pan-African conference and exhibition on ICT for Education, Training & Skills Development. The three day event offers participants the opportunity to develop multinational and cross-industry contacts and partnerships, as well as to enhance their knowledge and skills.

Over 14 consecutive years, eLearning Africa has hosted more than 18,000 participants from 100+ different countries around the world, with over 80% coming from the African continent. More than 3,830 speakers have addressed the conference about every aspect of technology supported learning, training and skills development.

The eLearning Africa 2022 Call for Papers is now open until October 01, 2021! Submit your proposal HERE.

www.elearning-africa.com

Ecobank launches 2021 edition of its fintech challenge for African startups

The pan-African banking group, Ecobank group, is inviting African fintech entrepreneurs to join the 4th edition of the Ecobank Fintech Challenge.

The Fintech Challenge is in line with the Bank’s commitment to championing digitization by giving innovative African startups the opportunity to promote their fintech solutions. The startups can potentially partner with Ecobank to scale their solutions across Ecobank’s 33 African markets as well as its international operations in France.  

All selected Finalists will be inducted into the Ecobank Fintech Fellowship following the Finals and Awards ceremony slated for November 2021. The selected top three winners will receive cash prizes worth $15,000, $12,000 and $10,000 respectively. All Fellows will however qualify to explore the following opportunities with the bank:

  • Multinational product roll out: an opportunity to pursue integration with Ecobank and potentially launch products in parts of Ecobank’s Pan African 33-country ecosystem.
  • Service provider partnerships:  Ecobank may select start-ups as pan-African service partner within the bank’s ecosystem.
  • Access to Ecobank’s Pan-African Banking Sandbox: Fellows will be given access to Ecobank’s APIs to test and improve their products for the pan-African market.
  • Mentoring and networking support in the network of global and African partners of the Group.
  • Priority Access to Ecobank’s VC partners for funding exploration.


Ade Ayeyemi, Chief Executive Officer, Ecobank Group, reiterated Ecobank’s dedication to support innovation across the continent: “The global impact of COVID-19 has accelerated the dire necessity to digitize and transform banking operations. As a banking group, we are convinced now more than ever that innovation and technology are the future of banking and therefore reaffirm our continuous commitment to identify and support Africa’s brightest developers to promote their solutions and help improve our services through the Ecobank Fintech Challenge.”

The Challenge resulted in Ecobank successfully launching the Ecobank Investor App, originally developed by Finance Mobile, a startup from the 2017 Ecobank Fintech Fellows cohort. Following the successful rollout of the app in 9 Ecobank markets and currently launching in additional countries, Ecobank is working on finalizing other such partnerships with Fellows from the 2020 Fintech Challenge.

Tomisin Fashina, Operations and Technology Executive, Ecobank Group: “We are firm believers that Africa’s talent pool is enormous and requires specialized and targeted mentorships to fully crystallize and ready fintech startups for business engagements. Through the Ecobank Fintech Fellowship, we are creating a learning experience through mentorship sessions with in-house, high-level technical teams and with our global partners to help shape and reshape the strategy and focus of African Fintechs.”

The Ecobank Fintech Challenge was designed in partnership with the advisory firm Konfidants and is supported by several partners across Africa and globally including ACCION, Catalyst Fund, Nedbank VC and Cellulant. Applications will close on 20 September 2021.

Applications have opened for entries from all startups and developers in any of Africa’s 54 countries and global Africa-centered fintechs. More information on the competition, benefits, and how to apply is available here.

www.ecobank.com

[Africa Cloud Review] Simon Ngunjiri: Increase in connectivity and broadband services is driving huge demand for cloud services in Africa

In our last Africa Cloud Review article, we highlighted extensively how cloud providers are fighting for a share of the growing cloud market in the continent.  As this market grows, it is generating a lot of interest and deals as cloud players and providers position themselves to take advantage of this boom.   

As this happens, the demand for cloud experts is also on the rise. In May this year, tech giant Google announced a new programme to offer new scholarships for Android, Web and Google Cloud development to developers across Africa. The programme will be offered in partnership with tech talent companies Pluralsight and Andela. A total of 40,000 scholarships will be offered to developers spread across Mobile and Cloud development tracks and, at the end of the training, the top 1,000 students will earn a full scholarship to certify in Android or Cloud development. Last week, Global IT consulting firm Accenture also launched the Accenture Cloud Engineering Centre in South Africa to train hundreds of cloud engineers in efforts to fuel Africa’s cloud computing boom.

According to Willie Schoeman, MD of Accenture Technology in Africa, in an article published by IT Web, as data traffic demand and cloud adoption continue to soar in South Africa, the increase in connectivity and broadband services is driving huge demand for more data centres, leading to a widening skills gap. 

In May, Amazon Web Services (AWS) also announced that it’s bringing its re/Start cloud skills training program to Kenya and South Africa this month as part of its rapid expansion plans this year. AWS re/Start is a free, full-time, 12-week program designed to support people who are unemployed or underemployed, and who have little technology experience, for careers in cloud computing. The program provides participants with new cloud computing skills, career and resume coaching, and interviews with local employers.

With all these reports, it’s clear that the continent needs more cloud computing skills. IT professionals in the region need to gain skills in cloud and data architecture due to the rapidly increasing number of organizations subscribing to integrated cloud services in recent years.

Google Cloud

With 24 regions and 73 zones in 17 countries, Google Cloud delivers high-performance, low-latency cloud services to customers. In Africa companies like Incentro have been at the forefront in offering Google Cloud services.

Last week, the company was credited by DigiCloud Africa for its role in expanding Google Cloud in the continent and subsequently being recognised as the Google Cloud Expansion Partner of the Year – Europe, Middle East, and Africa. 

In March this year, the company announced that it has achieved the Google Cloud Partner “Work Transformation” Specialization, in the Google Cloud Partner Specialization Program. By earning the Partner Specialization, Incentro Africa has proven their expertise and success in building customer solutions in the Work Transformation field using Google Cloud Platform technology – such as technical implementation, change management, training and ongoing premium support.

Google Cloud and SAP SE also last week announced an expanded strategic partnership to help customers execute business transformations, migrate critical business systems to the cloud, and augment existing business systems with Google Cloud capabilities in artificial intelligence (AI) and machine learning (ML).

Simon Ngunjiri Muraya is Google Cloud Architect at Incentro Africa.

ICASA to hold virtual public hearings on draft mobile broadband rules

The Independent Communications Authority of South Africa (ICASA) will hold public hearings in respect of the draft Mobile Broadband Services Regulations published on 26 March 2021 for public comments. The virtual public hearings will be held on 12 and 13 August 2021.

The draft Regulations, amongst other things, define relevant wholesale and retail markets or market segments for mobile broadband services, and determine whether there is effective competition in those relevant markets and market segments. Most importantly, the draft Regulations impose appropriate pro-competitive licence conditions on those licensees with significant market power, to remedy the market failure.

The Authority is of the view that the current Information and Communications Technology (ICT) sector remains highly concentrated, with market dominance enjoyed by a small number of major providers in various market segments, as identified in the Findings Document on Mobile Broadband Services Inquiry published on 26 March 2021. This dominance and ineffective competition in some of the markets, if not addressed, together have the potential to constraint the sector, and continue to contribute towards the high cost of data services, while stifling dynamism and innovation in products and services.

The Authority’s mandate is centred around the public interest, and it is committed to protecting consumers, while ensuring the sustainability of those conducting business within the ICT sector. “This is spirit within which we should all be looking at this regulatory intervention i.e. to meet the broadband needs of all South Africans, especially during the time where the paradigm has shifted and the public relies more on broadband, or data services and bandwidth, to go about their communication lives,” says ICASA Councillor, Ms Thembeka Semane.

The Authority has identified and published several pro-competitive terms and conditions, in relation to which stakeholders made submissions. The public hearings provide ICASA with an opportunity to interrogate these representations further in order to make informed decisions in the final Mobile Broadband Services Regulations.

All interested stakeholders are invited to take part in the public hearings by clicking on the link below.

Click here to join the meeting

www.icasa.org.za

[Column] Caroline Mukiira: Hybrid Cloud: The catalyst for increased financial inclusion in Africa

Africa has made huge strides over the past decades towards the financial inclusion. The digitization and simplification of money management has especially proved to be a sturdy vehicle in making headway in this regard.  

Yet, more work needs to be done as only 34 percent of adults in Sub-Saharan Africa have a bank account and 350 million people are still unbanked. In Kenya, financial inclusion as of August 2020 stands at 82.9%, an improvement from 26.7% in a decade, while the commercial banking industry is the fourth largest in Sub-Saharan Africa but there’s still room for growth.  

Technology has been at the heart of financial inclusion in Africa and today we’re seeing how technology trends are evolving much faster than imagined. The pandemic has accelerated the pace, and we have seen digital transformation initiatives within the sector compressed from years to months.  

Building the right platform 

With the evolution of technology, banks are pivoting their platforms towards open ecosystems and the secure sharing of data with third-party applications from fintechs and online financial service vendors to increase access to banking services to the masses. The 2021 IBM CEO Study – that drew on input from 3,000 CEOs across 26 industries and nearly 50 countries – has found that such ‘platformification’ of banks is here to stay. 

Home to over 150 fintech companies, Kenya has one of the biggest and most developed fintech ecosystems in the African continent, owning to the proliferation of mobile phones and the rise of mobile money alongside technologies such as hybrid cloud and AI to name a few.  

Innovation through a secure cloud 

In highly regulated industries like the financial services sector, increasing financial inclusion for the unbanked is a juggling act between security and compliance together with innovation, and hybrid cloud is the answer to the conundrum.  

Hybrid cloud can help banks and fintechs cope with the hurdles of compliance, security, and innovation while meeting customer expectations and venturing into new services. As banks become platform providers, hybrid cloud adoption lowers the total cost of technology ownership and improves operational efficiency – promoting innovation, aiding in the development of new business models and supporting more fulfilling customer engagements.  

While the cloud offers clear advantages to banks and most are actively using cloud services, few have actually moved mission-critical regulated workloads to the cloud to date. In many cases, this has been due to concerns about whether cloud environments complied with stringent security and regulatory requirements.  

Meeting industry requirements 

If banks are going to guard against fraud and criminal activity while delivering on their promises to digitally sophisticated customers, they have to build their platforms on technology solutions designed to meet regulations of the financial service industry. 

In response to this, IBM launched Cloud for Financial Services – a financial sector specific cloud offering – which features built-in security, regulatory and compliance controls that help minimize risks for banks integrating with third party independent service vendors (ISVs), fintechs and software-as-a-service (SaaS) providers.    

IBM has also been investing in confidential computing research and technologies for over a decade, and the solutions provide greater assurance that data is protected and visible only to its owner and no one else. This means banks can now be as compliant on the cloud as they are within their own data centers, and they can demonstrate compliance on a continuous basis. 

As we continue in the journey to financially include more of our people across the African continent, the future of banking across Africa is dynamic and exciting.  

With the right technology partner such as IBM and being cloud-ready, financial services institutions can build a strong ecosystem of partners – be it fintechs, startups – to offer an array of services at a quick pace and lower cost to entice the unbanked to the digital economy. 

Caroline Mukiira is the General Manager, IBM East Africa