Standard Banks South Africa (SBSA) and Moneta Seeds announced today that they have signed a cooperation agreement pertaining to mutual investment in Fintech companies. As part of the agreement, the parties will work together to locate target companies and invest together in such companies. The cooperation between SBSA, and Moneta Seeds, will allow SBSA to increase its exposure to innovation in the financial technology sector. The goal is to support the growth of the investee startups by leveraging the professional knowledge and experience of Moneta managers and the infrastructure and capability of SBSA. The partnership with Standard Bank will open the African markets to Israeli Fintech startups, especially in the fields of mobile payment and international wiring. About the Fintech opportunity in Africa / Fintech opportunities opening up for African startups Fintech globally is increasingly big business globally. Investment in the sector spiked last year, growing 201 per cent from 2013 to reach more than US$12 billion across 730 deals, according to research by Accenture. A “digital revolution” in banking and financial services is well underway, with fintech companies growing and incumbent players such as Citi and Bank of America becoming active in making sure they keep up with the trend. As ever, it is the United States (US) and Europe that lead the way, with Africa lagging. But the trend is evident in Africa too, and, as Disrupt Africa noted last week with regard to on-demand mobile technologies, it offers great opportunities for startups looking for a sector in which to scale. Fintech, in fact, has the possibility to grow in Africa even more so than elsewhere in the world. Around 75 per cent of the continent’s population lacks access to formal banking services. A tiny minority have credit cards. The importance of remittances in African countries also offers opportunities for startups in the fintech field. Africans in the diaspora send home more than US$40 billion each year, a figure that is rising. Yet costs are high, with the Overseas Development Institute (ODI) reporting those Africans pay an average of 12.3 per cent to money transmitters to send home US$200. Fintech startups can provide the solutions to these problems. And, even more optimistically, there is enough evidence to suggest Africans are more than willing to adopt alternative means of paying for goods and services, and moving and saving money. Africa is the continent of mobile money, accounting for more than half of the total number of mobile money wallets globally. Kenyans alone transferred more than US$11 billion via mobile money services in the first six months of 2014. So mobile money proves Africans are open to alternative financial methods. Yet the prevalence of such services on the continent does not harm the chances of other fintech services succeeding. Even mobile money is ripe for disruption. M-Pesa has an average transaction value of US$29, far too high for those on lower incomes. There is room for African fintech startups to come up with other solutions that can scale. Fintech in Africa received a substantial boost last week with the news Kenyan startup Weza Tele had been acquired by AFB for US$1.7 million. As local stakeholders told Disrupt Africa, this will serve as inspiration to both the startup scene in general but also fintech startups particularly. The knowledge that there are funding rounds and exits ahead if a solution gains enough traction will be well received. Globally, there are opportunities aplenty. Swiss Fintech accelerator Fintech Fusion is calling for applications for its 12 month incubator program, naming African mobile startups as a key interest. This year, for the first time, Seedstars World is focusing on fintech. Five startups have been selected from the African leg of the Innotribe Startup Challenge to compete at the global event in Singapore in October. Within Africa, too, there are more opportunities than ever before for fintech startups to flourish. Village Capital recently announced the 12 startups selected for its FinTech for Agriculture accelerator program in Nairobi, Kenya, two of which will ultimately walk away with US$50,000 each in funding. Citi has launched a mobile challenge. Savannah Fund has invested in fintech. In a guest post last year for Disrupt Africa, Nellie Horn of Seedstars World caught the prevailing mood and highlighted the myriad opportunities for startups active in fintech in Africa. “The incredible success of M-Pesa has empowered several startups to profit from mobile money, remittance, and forex issues. Especially Uganda was a hotbed of fintech activity. The lack of trust in banking systems, which has led to a majority of the population being unbanked, plus the high mobile penetration (mostly feature phones with heavy USSD usage) are important factors for these startups’ successes,” she wrote. Examples include the likes of Ghana’s Beam, operating in the increasingly lively bitcoin space, as well as Remit.ug andSimple Pay, the latter of which Seedstars World invested in this year. “While mobile money is taking off in other countries, most notably Eastern Europe, it still is not as popular as in Africa. However, financial services are changing,” Horn wrote. She is certainly right. Mobile money can no longer be considered Africa’s only fintech solution of note, and with interest from global banks and investors alike on a marked rise, now is the time to get that fintech solution out of your mind and into the market.