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Africa 2016: Social banking, cyber security and talent development

Africa’s internet penetration currently sits at 30% while the mobile connection is at 900 million subscribers. This offers great opportunities for various products and sectors to grow. The financial and business sectors will surely see a high boom in business as more people get access to smartphones and the internet this year.

However, with these developments, cybercriminals will also be inclined to do much more damage. In recent reports in Kenya, more locally bred cybercriminals are gaining access to sensitive government and company documents.

Nevertheless, for the main tech players, 2016 would be the year to get a foot in, as the number of mobile smartphone subscribers marches on to the predicted 550 million (by 2019). And so I predict that African tech will take great steps in the following areas.

Growth of social banking

This is a new concept that has slowly taken root especially in East Africa. More companies have crept up to offer mobile banking solutions including loan formats which compete with regular banking services.

Combining such services with social media, where most of the continent’s youth spend their time, could open avenues to offer services to the unbanked but the connected.

Various banks and private companies have already started to introduce this new type of banking in Kenya. The latest is Branch, a company founded by Kiva founder, Matt Flannery. Branch is a mobile application that allows users to apply for loans of up to US$500 and uses social media analytics to screen its applicants.

“We have a machine learning algorithm which analyses data from your phone, Facebook and other source to determine how much to lend to you,” the company explains.

Andrew Huelsenbeck, the Kenya country lead for Branch, said, “Branch is using Facebook as a kind of digital fingerprint for our customers. We use it as a fast and easy way to confirm identity, and use other information available from Facebook for credit scoring. So many Kenyans have Facebook accounts, but might not have other forms of ID commonly needed to get loans. By using Facebook in this way, we're offering a lot of folks reliable access to credit for the first time.”

NIC Bank also recently launched its NIC KONNECT application that will allow banking activities to be done through social media platforms such as Twitter, Facebook, WhatsApp and many more.

Group Managing Director John Gachora said: “This new innovation is aimed at providing our customers with an easier point of interface with their bank. It is perfectly aligned with our MOVE to NOW philosophy through which we aim to provide our customers with multiple channels of access to our services, thereby creating greater convenience.”

Social media is fast growing in African countries and more services will join the bandwagon to capture the youth.

Mobile money interoperability

One of the biggest hurdles for mobile money is the lack of interoperability between different products and even countries. This is set to change as more mobile money transfer services aim to differentiate themselves from the competition.

Two ingenious developers from Kigali, Rwanda have figured a way to bypass the systems and offer cross-network and cross border money transfer.

Cedrick Muhoze, a developer and his brother Patrick Muhire living in Kigali, recently launched Vugapay, an application that allows cross network transfer of mobile money – probably the first attempt to break the transfer money deadlock.

Cedrick tells us that his product works with all mobile money operators. But how is this possible without having to collaborate with the telecom companies? Cedrick’s company has bought all the network’s SIM cards and created a system where they can allow users to withdraw from any network and deposit the money in any network, bypassing the telecom companies.

This success might be short-lived as more mobile money companies look to be interoperable. Currently, mobile money product MPesa is integrated with Western Union and MoneyGram, enabling mobile money remittances, internationally.

This is tipped to be the next evolution of mobile money and this might pop out in 2016 as more customers ask for more flexibility and integration.

Greater adoption of cyber security features

Last year’s prediction was that the continent will face great cyber fraud. These were mostly social engineered kind of insecurities where system breaches were not heard of. But the coming year could see more sophisticated cyber insecurity in Africa from Africans.

Already the Kenyan government is losing Kshs five billion (US$50 million) yearly on cybercrime and it doesn’t seem to stop there. According to the Kenya Cybersecurity Report 2015 [PDF], most companies are now experiencing inside threats.

“The number of threats and data breaches increased with clear evidence that home-grown cyber criminals are becoming more skilled and targeted. This means that local organisations will continue to lose as they scramble to change their defensive stance,” an excerpt from the report said.

During the period of the research, Serianu, a cybersecurity firm in Kenya, observed that most companies and government bodies have not put away budgets to address cyber insecurity. This will change with the growing losses for companies.

It is with this in mind is that many local companies, which are suffering in silence will adopt cyber security measures to protect their digital assets.

“Localised cyber intelligence and research is critical in understanding the type of attacks that your peers are facing in the region. While many technology vendors will provide you with cyber intelligence - our experience has been that this intelligence is global in nature and does not put into account any local intelligence. To be fully secure you need to develop local cyber intelligence capabilities that will enhance the visibility of the threats facing your organisation,” the report noted.

As more incidences become reported, companies and government bodies will be pushed to increase their IT budgets and adopt cyber security features in the near future.

More emphasis on talent development

The reality in East Africa reflects the problems around the globe it attaining well trained and matured talent to work in the IT departments.

According to Lindsay Britz, the Marketing Manager of Magic Software South Africa, the need for skilled labour will be a point of concern in 2016.

“Perhaps the biggest challenge will be finding skilled people who have the necessary experience. The shortage of IT skills is having an increasingly negative impact on business, with many companies being forced to delay the introduction of new products and services because of problems filling vacancies,” Britz elaborated.

“In 2016, CIOs can overcome this challenge by investing in youth development and internship programs that promote critical IT skills, innovation, and offer rapid career growth,” she predicted.

The Kenyan government has also called on more training for their government IT staff. The current Cabinet Secretary for Information and Communication, Fred Matiangi has several times decried the situation of lack of professionals in the IT industry.

It is with this end that the government came up with the Digital Talent Programme aimed at coming up with relevant ICT workers in the country.

More users are tipped to join either online boot camps or physical programmes like The Dev School and Moringa School and many more across the continent to improve their skills and become market ready. 

IT in general will have a greater impact on the continent and I would attribute that to the low cost smartphone options readily available through various brands. Government and private sectors will now take advantage to this new phenomenon to set themselves up for a new wave of internet users.

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Vincent Matinde

Vincent Matinde is an international IT Journalist highlighting African innovations in the technology scene.

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