African financial firms including banks and insurers are considering joint ventures with tech-startups in order to stay competitive and grow in new markets on the continent, a PwC report has said.
The report showed that nearly 50 percent of insurance chief executives and 40 percent of banking executive surveyed by PwC, planned to enter into joint ventures in the next year as they try to find ways of attracting new clients and access the previously inaccessible segment of the African market.
“More than a third of CEOs are planning to enter into joint ventures and strategic alliances over the next 12 months,” BDlive quoted Johannes Grosskopf, PwC banking and capital markets leader for Africa, saying during a media in Johannesburg on Monday
“I think we are going to see a lot more of that in Africa, particularly with mobile phone operators.”
Financial services access in sub-Saharan Africa still lags most of emerging and developing nations, but a growing use in mobile phones on the continent has opened up a large portion of the market that was previously unreachable by banks and insurance firms.
For instance Kenya’s mobile money revolution, that has pig-banked on telecom firms applications like like M-Pesa by Safaricom and Airtel Money by Bharti Airtel, has enable banks to open more customer accounts while building a savings culture in the east African nation.
Nearly two-thirds of households in 23 sub-Saharan African countries had at least one mobile phone in 2013 and the region is the fastest-growing mobile technology market in the world, according to Gallup, a US-based global research firm.
Victor Muguto, PwC’s long-term insurance leader for Africa, said there were “huge opportunities” to tap the previously uninsured market in the rest of Africa, where high growth rates are fuelling an increase in wealth, and the growing base of insurable assets and lives that comes with it.