From: aidotengineer
Artificial Intelligence (AI) and Financial Technology (Fintech) are distinct, yet related, areas within Africa’s evolving technology landscape. While AI is a broad concept encompassing various advanced computational methods, Fintech specifically applies technology to financial services.
Understanding AI and Fintech in Africa
What is AI?
AI is not a new concept, with its origins tracing back to the 1950s with neural networks, followed by machine learning in the 1980s, and more recently, deep learning and generative AI [00:00:48]. The conversation around AI has expanded beyond tech-specific circles into diverse areas, signaling a transformation of the world, and notably, the African continent [00:00:40]. Despite its perceived novelty, Africa is already deeply immersed in technology, with Kenya reportedly having the third-highest daily use of ChatGPT globally [00:07:23].
What is Fintech?
Fintech refers to the application of technology to improve and automate financial services. The African Fintech sector demonstrates unique and strong growth, with products like M-Pesa enabling money transfers using only cell phone numbers [00:08:45]. This capability to move money easily across different regions and continents has been a “game-changer” [00:08:57]. Projections show significant fintech revenue growth in Africa between 2021 and 2030, indicating its potential as a global player in the financial technology space [00:09:08].
The Distinction and Relationship
A crucial point of distinction is that fintech is not inherently AI [00:09:31]. While many new tools and processes in fintech might leverage AI, it is important to differentiate between the two [00:09:37]. Fintech focuses on digitalizing financial transactions and services, whereas AI is a broader set of technologies that can be applied across various sectors, including finance, to enable intelligent decision-making, automation, and problem-solving.
Africa has a notable number of companies specializing in the AI space [00:10:00], indicating existing immersion in this technology. The continent is actively investing in AI learning spaces, including universities, primary, and high schools [00:23:18]. The AI market in South Africa alone is projected to grow significantly within the next decade [00:23:31].
Africa’s Unique Position and Potential
Despite being perceived as a “baby” in the AI phenomenon [00:07:13], Africa’s unique challenges have often fostered innovation. The lack of extensive resources can spur “some of the best innovations” through simplicity [00:08:19]. Examples of this include:
- Farmer Wings in Nigeria: Used to deliver medicine to remote or difficult-to-access areas [00:16:49].
- Project Cumulus in Morocco: Produces drinking water from air [00:17:03].
These innovations highlight groundbreaking solutions not just continentally but globally [00:17:18]. The continent’s ability to “work around problems” using technology is a testament to its ingenuity [00:08:38].
Challenges and Opportunities
Challenges in Africa often involve bureaucratic hurdles such as politics, tax laws, and financial red tape, which can lead to over-engineering solutions rather than systemic change [00:11:59]. For instance, addressing long queues at government offices often focuses on ticketing systems or hiring more staff, rather than fundamentally rethinking processes using technology like AI [00:12:26]. An AI-driven approach could, for example, automatically initiate ID or passport applications when an individual reaches the qualifying age, significantly reducing the need for manual applications and queues [00:14:04]. Such innovative thinking can solve not only African problems but also global ones [00:14:40].
Africa holds 30% of the world’s earth minerals [00:19:11]. However, these raw materials are often exported, repackaged into finished products elsewhere, and then bought back by African nations [00:19:45]. This dynamic suggests a need for Africa to recognize its own potential and shift from being primarily a consumer to a producer on the global stage [00:20:11].
The continent’s potential is immense, fueled by creativity and a high usage of technology [00:17:30]. To fully realize this potential, Africa needs to overcome a mindset that sometimes sees itself “below par” and requiring extra effort to reach the level of other regions [00:18:11]. A shift in mindset, akin to China’s “China first” approach, can lead to developing solutions tailored to local needs that also prove valuable globally [00:20:35]. AI can accelerate this, allowing the development of solutions at a much faster rate [00:21:08].
For global partners, the question is what can be done to help Africa stand on its own feet, not just as a participant, but as an active player in the market [00:25:04]. For Africans, the question is what AI means to them personally and what opportunities it presents given the continent’s creativity and existing resources [00:24:46]. AI may not provide everything, but it can unlock existing potential and help Africa shed the perception of being “in the back of everything” [00:25:34].