Amplify CEO Segun Adeyemi Talks FinTech in Africa

Sylvana Lewin, Tuesday February 6th 2018

In 2017 Africa produced more than 300 FinTech startups. According to Disrupt Africa, these startups are active in 20 countries, focusing on everything from payments and remittances to lending and financing. African FinTech is a sector that is quickly gaining popularity and traction.

Within the MEST portfolio, Nigerian Fintech startup Amplify builds next-generation payment and data systems for banks, businesses, and consumers in Africa. Amplify's solutions help incumbent financial institutions and FinTechs to meet the changing demand of their customers and reach the unbanked/underbanked population. CEO Segun Adeyemi is headed to Hong Kong this week to speak alongside MEST Managing Director Aaron Fu and others at ReThink Live: Africa’s Next Unicorns. We spoke to Adeyemi to get his perspective on African FinTech before he heads to Hong Kong!

Tell me a bit about Amplify.

Amplify is on a mission to become the most innovative FinTech company in Africa, capable of meeting the fast-changing needs of today’s fast-growing businesses and consumers. We do this by building next generation payment systems for banks, businesses and consumers.

We currently have two solutions in the market; AmplifyPay, a payment gateway for accepting and managing payments online and mTransfers, a patented solution that allows bank customers to carry out banking operations while chatting on any social media and messaging application.

[caption id="attachment_6345" align="aligncenter" width="400"] Amplify Cofounders[/caption]

What are you excited about in the African FinTech industry?

There is a lot to be excited about in the FinTech space in Africa if you consider the recent buzz and attention that the industry has been enjoying from both local and international investors and press. Last year, almost a quarter of all venture investments that came into Africa went into FinTech companies. We also saw a number of FinTech-focused programs, incubators, and accelerators opening up across the continent. It is also interesting to note that we are seeing increased openness and support from governments and regulators across key African markets such as Rwanda.

Beyond all this attention, I am personally excited about the opportunity to significantly help drive financial access and inclusion through the creation of innovative solutions that leverage the now ubiquitous technologies that were previously unavailable.

Finally, the quality of entrepreneurs playing in the space and, as a result, the depth of problems being solved and viability of the companies being built is quite impressive. It is indeed a great time to be playing in the fintech space in Africa.

Why do you think FinTech is important?

In answering this question, it is important to pay attention to some hard facts. Almost 60% of the African population does not have access to formal financial services, and 90% of transactions in Africa are still done in cash. Evidence has shown financial inclusion to be an important tool for social and economic progress and long-term reduction in poverty. Access to microcredit can help businesses grow and better cope with risk. Mobile money and digital payments channels help households reduce transaction costs and improve their ability to share risk. Insurance helps the poor mitigate risks and manage shocks.

FinTech provides an opportunity to leverage new technology to deepen financial services for already included members of society, and an even greater opportunity to reach millions of people who previously aren’t able to access some of these services.

What would your advice be for someone trying to get into the FinTech industry?

The first thing I will say, which I believe applies to anyone trying to get into any industry, is to not get carried away by the buzz or hype. You shouldn’t get into FinTech or any industry just because you think it’s cool or trendy.

Practical advice I would give to anyone looking at entering into the fintech space includes:

  • Think solutions and not product. Start with the specific problems you’re passionate about solving or the value you intend to add before you start designing or building your fintech products.

  • Do your homework. Financial services has its sensitivities. It is therefore important that prospective fintech players research extensively and gain a deep understanding of the regulations, requirements, and intricacies of the space they intend to disrupt or innovate in.

  • Look beyond payments and remittances. This is the most vibrant but also the most competitive. There are a lot of areas of fintech such as insurance, pensions, savings, asset management, data, security, and more that are getting much less attention than required.

What are your thoughts on cryptocurrency?

It is pretty difficult to form a conclusive opinion on cryptocurrency as it is still in the very early stages and no one can accurately predict how things will turn out. But one word I would use to describe cryptocurrencies, such as Bitcoin, is game-changing. Cryptocurrencies are a high-risk, high-reward bet similar to early stage investments, and I think most of them will implode, but the ones that survive will become really valuable. I will take this from two perspectives: the store of value standpoint and the medium of exchange standpoint.

In regards to store of value, I believe cryptocurrencies like Bitcoin will continue to rise and may hit as high as $1million or could crash and be worth nothing tomorrow. There are different advocates that align to the two different positions. One thing we can agree on is that it is extremely volatile. This volatility leads to the second part of medium of exchange.

It will be very hard for a currency with this high level of volatility to become widely or universally acceptable as a medium of exchange. This also can change really fast. However, the increase in the value of cryptocurrencies hasn’t been driven by an increase in usage but is merely due to speculative activities.

What are some of your top African FinTech companies to watch?

Outside Amplify, some of African fintech companies that I am on the look out for include:

  • OneFi: A consumer credit company that offers fast loans and other financial services via mobile apps. I like their ability to automate and fully digitize their entire operation.

  • Luno: A platform that makes it easy for people to buy, sell, send, store and learn about cryptocurrencies.

  • Asoko Insights: A data company that makes it easy for investors and other stakeholders to access in-depth profiles on Africa's leading private companies.

Where do you see African FinTech going in the future?

FinTech will drive the adoption of financial services in the coming years. Specifically, as we have seen with the significant growth in the adoption of payment services with the success of solutions like m-pesa, and other mobile money and payment neworks, other services like savings, credit, insurance and more will be driven by FinTech.

Also, we will see more collaboration between incumbent financial services providers and young FinTech startups. This is because, we are coming to the constant realization that in many cases, we need both parties to really drive solutions that create significant impact in the lives of customers. This will continue to drive investments into the African FinTech space both from local and international investors.

Finally, a few of the young fintech startups today will become the household names for younger customers of this generation, just as the traditional financial institutions were defaults for previous generations.

Interested in FinTech? Learn more about cryptocurrencies in our article How Cryptocurrency Can Enable Africa’s Entrepreneurs.