The 2024 edition of the African Financial Industry Barometer, conducted by Deloitte and the African Financial Industry Summit (AFIS), highlights a sweeping transformation in the continent’s financial sector. With digital innovation and sustainability shaping the strategic focus, financial players are navigating heightened risks and complex economic conditions.
A divide is emerging between the optimism of fintechs and the more cautious stance of capital markets. Fintech leaders express a robust confidence in future growth, giving an impressive score of 9.25 out of 10 regarding the next three years. In contrast, traditional markets are adopting a measured approach to the evolving landscape.
Innovation is becoming the centerpiece of the industry’s agenda. Data infrastructure and cloud-based projects are gaining momentum across financial institutions. However, despite technological strides, the sector struggles to foster organizational change. Only two percent of institutions report achieving full maturity in digital capabilities—a gap that could hinder long-term progress.
Digitalization is now a vital tool for enhancing both operational efficiency and customer experience. Over 70% of financial institutions rank digital transformation as a top priority. Banks are tailoring services through deeper customer segmentation, while insurers are accelerating efforts to digitize core processes.
The report underscores a surge in cyber risks, now seen as the top threat by 52% of survey respondents. Operational risks remain high, reflecting growing vulnerabilities from expanded digital activity. Political instability and volatile currency markets also continue to complicate investment and financing strategies, forcing institutions to tread carefully in an uncertain environment.
Continental financial integration initiatives such as the Pan-African Payment and Settlement System (PAPSS), the African Continental Free Trade Area (AfCFTA), and the African Exchanges Linkage Project (AELP) are recognized as potential growth drivers. However, implementation remains slow, with stakeholders calling for stronger coordination and support to maximize their impact.
Africa’s financial sector is facing reduced interest from international investors, a consequence of geopolitical instability and uneven performance across market segments. To counter this, institutions are increasingly forging strategic partnerships, particularly those centered around technology. Collaborations on cloud computing and digital payment solutions are becoming pivotal to staying competitive and innovative.
Financial players are progressively incorporating sustainability into their operations. Impact investing, ESG (Environmental, Social, and Governance) criteria, and eco-friendly insurance products are gaining traction. Yet, measuring carbon footprints remains underdeveloped, signaling the need for accelerated efforts on environmental goals.
The findings confirm that the future of Africa’s financial industry hinges on its ability to integrate technological innovation, strengthen governance, and promote financial inclusion. Adapting strategies to a fluid economic landscape will be essential for transforming today’s challenges into lasting opportunities.
