By Tamer Farouk
New innovations in financial IT solutions are opening several opportunities for finance decision-makers in Africa. But realising the full value of these innovations will require leadership and vision.
Earlier this year, the financial platform service M-Pesa announced that it has more than 20.5 million active users and over 27 million subscribers across Africa. This represents an important milestone for the continent and demonstrates the importance that innovations can have not only on financial systems but on the broader society.
Still, with the advent of AI, blockchain, and big data analytics, businesses are faced with an even broader array of innovations that will disrupt existing business models and potentially open previously unforeseen opportunities.
The impact that these technologies will have on finance departments and decision-makers in organisations across the region is profound, and finance leaders will come under mounting pressure to come up with a vision of how best to realise the value of these innovations within their respective organisations.
Modernising finance with today’s technology
M-Pesa launched more than 10 years ago, when smartphones and smart devices were not very prominent and the speed of technological advancement was not as rapid as it is now. Today, businesses are turning to a wide spectrum of innovations, such as cloud technology, to enable much faster, reliable, and scalable implementations of IT applications and are increasingly relying on big data analytics, AI, and blockchain capabilities embedded within the applications they are running in the cloud.
Kenya and Nigeria are leading the way in East and West Africa when it comes to leveraging emerging technologies to drive innovation, while countries like Uganda, Ethiopia, Rwanda, and Ghana are following a similar path as they pursue their own digital transformation journeys.
And this progress is not restricted only to banking and financial institutions, with organisations across a broad spectrum of industries now using advanced technologies and intelligent ERP applications to automate their finance processes and operations.
The high tax delinquency rate in Kenya, prompted the Kenya Revenue Authority to restructure the organisation to reduce the burden of compliance. By embracing cloud-based solutions and social media, the entity saw the average response time for taxpayer requests improve from several weeks to approximately 30 minutes.
CFOs are under tremendous pressure to align with different business units while providing the required strategic and financial guidance. And given the proliferation of advanced and scalable business applications, much of the modern CFO’s focus is on automating mundane tasks so they can free up bandwidth and become more involved in strategic engagements that help the organisation to achieve its goals.
Evolving responsibilities of CFOs
Technology represents a great opportunity to expand financial services, and CFOs have a major role to play in defining the strategy and business direction of their organisations. Indeed, finance is one of the core business units of any organisation given its role in managing capital and cash flow, developing strategies around profit planning and cost controls, and ensuring the organisation’s ability to meet its financial goals.
In a recent study conducted by the International Data Corporation (IDC) in East and West Africa, 26% of the respondents identified the CFO as having an important role to play in supporting their organisations’ overall digital transformation initiatives(1). In line with this, the responsibility for driving innovation is increasingly being shared by CFOs, whereas previously this was considered the preserve of CEOs and CIOs.
Creating a better digital solution
Organisations across East and West Africa are gradually speeding up their digital transformation efforts, with more and more businesses across Kenya, Nigeria, Uganda, Ethiopia, Rwanda, and Ghana leveraging technology to disrupt their markets, particularly in the banking and financial sector.
In East Africa, three large banks have migrated most of their transactions from traditional branch solutions to digital channels. In turn, this enables CFOs and CIOs to remain focused on driving internal change through more innovative value propositions.
The growing number of FinTech companies and start-ups operating in the region are bringing innovative solutions and new use cases to the fore. Consequently, businesses are increasingly leveraging innovative digital applications and achieving better business results with an improved customer experience. It is for these reasons that technology and innovation are poised to have an immense influence on the finance operations of tomorrow.
The Author is a Regional Senior Director – East and West Africa Applications Sales Leader at Oracle