The financial industry is experimenting with automation, predictive analytics, new delivery platforms, digital-only banking, blockchain and more. These changes are helping the institutions provide higher quality services at lower price points.

As a result, companies in the financial sector are able to better align their business strategies to consumer expectations. The emphasis is on creating better digital processes that consumers can personalize. And these digital FinTech enhancements are creating more positive consumer experiences.

Let’s look into some cutting-edge technologies that are directly impacting the relationship between consumers and financial institutions.

1. Artificial intelligence for predictive analytics
Besides powering chatbots and virtual assistants, artificial intelligence (AI) is also powering large-scale predictive analytics to help consumers find more personalized experiences. Now banks have the power to take all the data about a particular consumer and create a particular financial solution in real-time.

This level of personalization was unthinkable in the past. It might break up the traditional model of checking, savings, and loan management processes.

Banks can use the AI-driven predictive analytics to design individual financial packages for individual customers. AI in FinTech helps improve customer retention, speed-up loan approvals and prevent financial frauds.

2. Chatbots and virtual assistants for consumer education
Mobile devices, better network connectivity and improvement in artificial intelligence have made chatbots and virtual assistants easy to implement.

Most people are not financially savvy. When they contact any kind of financial institution, they are looking for guidance.

In the past, human advisors helped consumers understand their options. However, most of the customers have a similar line of questions with slight variations.
Banks and other financial institutes tried to answer these questions through frequently asked question (FAQ) pages. But these pages can become hard to navigate due to their length and become ineffective.
So businesses in the financial sector are using chatbots and virtual assistants to more effectively deliver content.

3. Digital-only banking
In the past, consumer confidence in financial institutions depended on physical infrastructure.
However, that sentiment seems to be changing. Most banks already maintain some form of digital presence through websites and mobile apps. However, a new generation of banks is going all digital to reach mobile-first consumers.

Digital-only banks (the most profound example of FinTech technologies on the market today) cut down infrastructure and human resources costs. So they can deliver cheaper services of the same quality as traditional banks.

As more digital banks start offering better deals to consumers, traditional financial institutions will have to compete. Overall, it will provide better options for consumers.

4. Internet of things (IoT)
Even though most FinTech companies are not utilizing IoT at the moment, there are lots of opportunities to explore. IoT is basically various connected devices.

As more and more devices get connected to the internet, it opens up new opportunities for financial institutes.

For example, companies can deploy IoT devices to collect insurance telematics and use the information to provide customized insurance coverage. In case of an accident, IoT devices can provide more accurate information to make faster claim decisions.

So, the deployment of IoT-based insurance services means consumers can take advantage of cheaper rates and get faster services.

5. Augmented Reality
Augmented reality (AR) is helping FinTech institutions enhance and enrich services for consumers.
Compared to virtual reality (VR), AR has proven more practical. VR requires expensive headsets. But most consumers can access AR technology through their mobile phones. Financial institutions are trying to create interactive AR experiences in physical spaces.

Wells Fargo has created an AR-based system [] that allows consumers to interact with bank tellers in an augmented reality environment. The experience combines the digital and physical world for consumers. They feel more connected to the institution because the experience has a physical component to it.

Summary
Consumers are benefitting from the various technologies that the financial industry is implementing. In a competitive market place, consumer confidence is always important. So, financial institutions who can embrace innovative solutions will enjoy sustained consumer loyalty.

In as much as this causes uncertainty for traditional banking, one thing that’s sure is that FinTech is here to stay. Yes, you read that right.

It is quite essential that companies understand the importance of implementing digital finance solutions to improve efficiency, service, and, ultimately, profitability. Below, we unravel the FinTech trends that are changing the face of finance forever.

1. Mobile Payments
Today, consumers don’t rely so much on physical cash as much as they used to. People now prefer instant, convenient modes of payment which exist largely in mobile banking.

A couple of companies, in fact, multimillion / billion companies are already making use of this mode of payment. Imagine these companies paying attention to mobile banking, you definitely have to get involved.

By offering easy-to-use mobile payment services, you can increase your market capitalization. Also, consumers have been conditioned to expect a few business days between requesting withdrawals from their digital wallets into their bank accounts.

This provides you with the chance to earn interest on those consumers’ funds in the interim.

2. Artificial Intelligence (AI)
Artificial intelligence (AI) refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. The term may also be applied to any machine that exhibits traits associated with a human mind such as learning and problem-solving.

Majority of financial companies are implementing and reconditioning their AI solutions, simplifying the extraction of information from their customers on a singular clamber.

The resultant effort will be introducing customized services to your customers, generated by a faster and more in-depth analysis only a machine can perform.

3. Robotic Process Automation (RPA)
Robotic process automation (RPA) is a software technology that makes it easy to build, deploy, and manage software robots that emulate humans’ actions interacting with digital systems and software. Just like people, software robots can do things like understand what’s on a screen, complete the right keystrokes, navigate systems, identify and extract data, and perform a wide range of defined actions. But software robots can do it faster and more consistently than people, without the need to get up and stretch or take a coffee break.

RPA is akin to a software robot, in that companies have a 24-hour digital worker that doesn’t make mistakes. They will only do what they are programmed to do.

This technology will, in fact is already having an impact on the financial sector as companies are using RPA to save time wasting by automating much of their business processes.

For instance, you can code it to manipulate applications to emulate how a human being uses an app. Doing this can help with error testing before launching your digital products to consumers.

Conclusion
Now that you know the most important financial technology trends, you need to keep an eye on the future. That way, you can position your company to get the most out of this evolving technology and adapt to consumer demands

What is Technology-Enabled Services (TES)?

The definition of TES is amorphous.  Emergence Capital wrote in 2011 an article titled What the heck is TES?  They defined TES are information service offerings that technology companies develop and operate on behalf of their customers.  Index Ventures in 2020 defined TES differently: Companies offering tech-enabled services bundle software and humans to provide “superhumans-as-a-service” as a turnkey solution.

The confusion arises because, on the spectrum between pure services and pure software, there is a lot in the messy middle.  At times, some technology companies look a lot more like services companies than they would like the public markets to believe, and sometimes services companies use and sell a lot more technology than many want to believe.

My view is the test of a software product should be how autonomous it is without the value devising from human use.  It’s not complicated, but the deeper the tools are in the stack’s back-end, the more they are pure technology.  The more the software requires a skilled and trained operator to extract value continuously, the more the opportunity for technology-enabled services.

Examples of successful technology-enabled services:

• Uber: The Company enables physical and digital worlds to make movement happen at the tap of a button for everyone, everywhere.
• Jumia: The tech company has become one of the most visited one-stop online retail shop for individuals and also companies in Uganda, with deliveries to all regions across Uganda.
• SafeBoda: The tech company is revolutionizing transportation, payments, and on-demand services in Uganda through affordable services at a click of a button.

The inflection point:

We’ve arrived at the inflection point, which seems more gradual than dramatic.  As more and more no-code and low-code products become more ubiquitous, more digital natives reach the workplace, and software has actual, functional AI, the necessity for technology enablement will become more acute.

What does it mean for evaluating businesses?

The key to evaluating businesses that have a TES component is understanding where cost for the labor sits and how it is compensated and incentivized. I see four models for TES:

1. Large services firms with formal and exclusive partnerships or proprietary technology e.g. Uber and Spotify
2. Large services firms with informal technology partnerships e.g. IBM
3. Freelance or solo-practitioners with deep domain expertise using the best tools available.
4. Technology firms with in-house services. Sometimes these services are embedded in sales and customer success.  One hypothesis is that sometimes unprofitable SaaS companies embed services in their sales cost lines instead of including them in Cost-Of-Goods-Sold.

No matter how you cut it, there will be more merging of SaaS and professional services.  But there are many open questions on what models will prove dominant.  The SaaS or the Service?  Who owns the relationship with the payer/customer?  Who has the most competition?  Which product or service is a commodity?  The most likely outcome is that there will be a mix.

The critical pieces for technology-enabled services to get right. 

• Value-based pricing vs. hourly costing.  Trading time for money is classic professional services.  The best TES should be outcome-focused and priced for the results delivered.
• Differentiation on culture.  Culture eats strategy for breakfast.  For firms that hire and train staff to perform services, corporate culture is everything.  Cultures that promote continuous learning, apprenticeship-models, and constructive feedback will thrive.  Those mired in petty politics without an outcome orientation for clients will struggle to prove enduring value.
• Deep specialization. There is always a place for people and firms that are absolutely the best at what they do.  Technology, as an accelerant, makes specialization more vital as the deep domain experts will be at the forefront of the technological development in their fields.
• Know your business and match your founder and capital structure accordingly.  The technology founder used to leading with the power of a software product is not the ideal operator for TES opportunities.  You need to manage your talent and cost structure in different ways.  Some of the companies mentioned in the Index article have already disbanded, like Atrium, the YC-backed company hoping to reinvent legal services.

When will the future arrive?

Like most things, it’s both already here and will take longer than we expect. But what’s obvious is that the most profitable, most enduring services will need to be enabled by the best technology.

Among the provisions of the National Payment Systems Act, 2020 is a requirement for all payment system operators to apply for and qualify for licensing after having satisfied a meticulous process applied by the Central Bank.

The National Payment Systems Act, 2020

The National Payment Systems Act, 2020 followed the National Payment Systems policy which was approved by the Cabinet of Uganda in December 2017. The policy put in place the framework around which the Payment System Law was enacted.

The National Payment Systems (“NPS”) Act was passed by Parliament in May 2020, and assented to by the President on 29^th July 2020 and is therefore the law governing and regulating payment systems in Uganda.

Mobile Money was first launched in Uganda in 2009 and has since been the main digital financial services platform. As well as the mobile money service providers, players in the mobile money network include issuers of payment instruments and issuers of electronic money. Although the industry was previously regulated through the Mobile Money Guidelines of 2013, passing of this law was aimed at increasing the safety and efficiency of payments systems operations by providing a legal basis to ensure compliance from all service providers and operators.

“At Yo!, we see the passing of the NPS Act, 2020 and the grant of our license by Bank of Uganda as a major validation and endorsement of our innovative and then-futuristic Payment Gateway service, Yo! Payments, that we pioneered back in 2010.” says Gerald Begumisa, Managing Director and Founder of Yo!.

“We are very thankful to our customers for trusting our service right from the start. We also consider ourselves fortunate to operate in an environment where the regulator, Bank of Uganda, has taken an approach to establish regulations and guidelines which allow new innovations time to grow and thrive”, he adds.

What this means for Yo!

Being regulated under the auspices of the Bank of Uganda within the prescripts of a license means that every customer transacting via the Yo Payments platform can do so with a new level of TRUST. The license merely validated Yo!’s impeccable track record with regards to the security and reliability of its technical platforms.

The issuing of licenses means that going forward only licensed Payment Operators will be allowed to provide payment and aggregation services, which in turn will boost confidence in the market and allow the mobile money ecosystem to grow to fulfill its real potential.

Yo! looks forward to working with and integrating with the other licensed financial institutions in Uganda to further democratize the financial system in Uganda

About Yo!

Yo-Uganda Limited (“Yo!”), incorporated in January 2006, is a leading technology company based in Uganda. Yo! leverages various mobile platforms to deliver payments solutions to financial institutions, large and small businesses and individuals.

Yo! was the first company to launch and profitably operate a multipurpose mobile payments aggregation service in Uganda, Yo! Payments, in 2010, and has continued to be at the forefront of developing financial technology solutions for business.

Through its Yo! Payments platform, the company provides full support for Mobile Money services including integrations with several banks, utilities and customers wishing to make and accept payments through all mobile networks currently active in Uganda. Apart from mobile money, other mobile platforms leveraged include SMS, USSD and IVR enabling businesses accept payments through Point of Sale devices, Mobile Applications (Apps) and web transactions.

Fintech in Uganda

Digital financial services present tremendous opportunities for the Ugandan business environment to provide high quality, reliable and affordable financial products and services. This is especially necessary for the large number of unbanked and underbanked people whose access to financial services is impeded by the limited spread of banks across the country.

In a recent announcement, Yo! unveiled plans to reach out to and include 300,000 farmers across Uganda into the digital ecosystem through a $250,000 grant partnership with United States African Development Foundation (USADF) and Mastercard, Inc.

“Initiatives such as our digital agriculture solution are important in achieving financial inclusion for more Ugandans,” said Lawrence Totimeh, Head of Business and Service Delivery at Yo! “With the regulatory environment instilling more confidence to the consumer, we shall have greater participation and willingness for more people to take advantage of digital financial services and move away from the riskier cash based transactions.”, he adds.

Yo-Uganda Limited (“Yo!”), a 16-year-old leading financial technology solutions provider based in Kampala, Uganda, has announced a new grant partnership with the United States African Development Foundation (USADF) to roll out Mastercard Farmer Network – a digital agriculture solution that digitizes marketplaces, payments and workflows within the agriculture sector.

The platform provides a digital marketplace for buyers who are looking for sustainable sources of quality produce at favourable market prices and a place for small-holder farmers to access reliable markets and fair prices.

USADF supports African-led community enterprises by providing seed capital and technical support. The grant partnership will provide seed funding of up to $250,000 over a 24-month period.

Yo! will be leading the implementation teams on ground to roll out a customized version of Mastercard Farmer Network, tightly integrated with Yo!’s payments infrastructure countrywide. Over the next two years, Yo! will work in close collaboration with the USADF and Mastercard to reach out to and include 300,000 farmers across Uganda into the digital ecosystem.

The aim of the partnership is to create permanent links between key stakeholders in the agriculture sector, which serves as the largest employer in the Ugandan economy. It will create a one-stop digital marketplace, advancing digital inclusion and fostering wealth creation for both individuals and communities.

The implementation of this digital technology will also help bring more visibility to supply chains and help move farmers away from unreliable and risky cash-based interactions.

“At Mastercard, we remain committed to digital and financial inclusion of the rural communities in Uganda. Our partnership with USADF and Yo Uganda will help significantly advance digitalization efforts in the agriculture sector, improving the livelihoods of farming communities, growing agri-based micro, small and medium sized businesses (MSMEs) and reducing the prevalence of cash transactions in Uganda,” said Daniel Huba, Vice President, Humanitarian and Development.

“Our partnership with USADF and Mastercard is a critical continuation of our strategic initiative to digitize operations and financial transactions in the agriculture sector of Uganda. Since 2015, we have heavily invested in partnerships to see that our services get extended to this sector, the largest contributor to Uganda’s GDP.” said Gerald Begumisa, Managing Director of Yo!

The partnership is expected to lead to the on-boarding and training of 300 Farmer Producer Organizations (FPOs) on how to access and utilize the Mastercard Farmer Network solution.

In order to create a permanent link between the FPOs and the farmers who will be on boarded, Yo! will recruit and train 600 Digital Champions from the FPOs to serve as digital change agents within the communities to propel the uptake and usage of digital solutions. 40 medium to large agri-buyers are also expected to be on-boarded onto the service.

About Yo-Uganda Limited

Yo-Uganda Limited (“Yo!”), incorporated in January 2006, is a leading Financial Technology Solutions Provider based in Uganda. Yo! develops solutions geared at delivering significant operational benefits to its customers such as increased efficiency in processes, reduced costs, accelerated growth, and increased profitability.

Our solutions leverage various mobile platforms such us Mobile Money, SMS, USSD, and IVR to deliver value to our customers. For example, our solutions enable some of the largest businesses in Uganda to accept mobile money payments through points of sale devices, mobile applications, or the web.

Over the past six (6) years, Yo! has made significant strides in providing its digital payments and allied solutions and services within agricultural value chains throughout Uganda through various interventions and partnerships which have seen tens of thousands of farmers and their communities impacted by digital interventions. More available at:

http://yo.co.ug/2021/04/15/bulk-digitization-of-agriculture-value-chains/

About the United States Africa Development Foundation

The U.S. African Development Foundation is an independent U.S. government agency established by Congress to invest directly in African grassroots enterprises and social entrepreneurs. USADF’s investments increase incomes, revenues, and jobs by promoting self-reliance and market-based solutions to poverty. USADF creates pathways to prosperity for marginalized populations and underserved communities in the Sahel, Great Lakes, and the Horn of Africa.

More available at: https://www.usadf.gov/

As well as the 163 members of FITSPA, the conference brought together fintech players from the East African region, and across Africa.

One of the stated goals of the Financial Technology Service Providers Association of Uganda (FITSPA) is to bring together the fintech community in Uganda and encourage open dialogue.

Yo! Uganda Limited is a registered member of the association and our MD, Gerald Begumisa is a member on the FITSPA Board of Directors.

Begumisa: Fintechs have eased payments of school fees and tuition while at the same time allowing institutions to collect and track the trends of the payments

Fintech
Fintech is the application of technology to products and services in the financial industry. Businesses are constantly carrying out a range of financial operations. There are payments to be processed, financial records to be kept and client transactions that must be handled speedily and securely.

In order to efficiently deliver services to their clients, companies are on the lookout for solutions that are convenient, safe, and simple to use. This is where financial technology (Fintech) comes in.

Fintech has evolved from its beginnings in computer technology to making use of the internet revolution and more recently powering mobile devices to take care of personal finance.

In Uganda, as in many developing countries, Fintech offers an opportunity for greater financial inclusion reaching individuals that traditional banking has historically struggled to reach.

Yo! Involvement in the Fintech Space

Yo Uganda Limited has been involved in the fintech space for more than 10 years, and is a winner of several industry innovation awards.

We were the first company to launch and profitably operate a multipurpose mobile payments aggregation service, having launched our payment platform in February 2011. Our aggregation systems have continued to offer SMS and USSD services to organisations in and outside Uganda.

With innovations that have introduced a number of services and products to Uganda’s fintech space, we are able to serve a wide range of industries.

Numerous organisations are using our services to securely and conveniently disburse funds directly to the mobile money wallets of multiple beneficiaries. Since 2015 we have been involved in digitizing agricultural value chains in Uganda.

Statement on Sponsorship

Sponsoring events such as the FITSPA conference and exhibition reiterates our commitment to the development of the Fintech industry in Uganda and Africa.

For more details on the just concluded FITSPA conference and exhibition: FITSPA Conference 2021

The “Bank-Format” statement is different from the standard detailed statement in the following ways:

1. Bulk Payments and associated charges are represented as a single Debit off your account;

2. Stand-alone transactions and associated charges are represented as single entries (combining transaction amount and charges into a single credit or debit)

This dramatically reduces the number of pages of the statement, should your processes require a printed copy of the statement.

Read the story of Yo! Payments, as published by PC Tech Magazine.

Yo! Payments Gateway was awarded the Best Financial Services Application Award at the 2015 MTN Innovation Awards.

The award was given in recognition of Yo! Uganda’s immense efforts to deliberately take steps to build a more inclusive financial system. Yo! was thus chosen based on its work as a financial services inclusion enabler helping to facilitate each of the four pillars of financial inclusion set forth by the Bank of Uganda. The Yo! Payments Gateway was additionally found to address the needs of both consumers of financial services and providers of financial services and was identified to clearly demonstrate enabling business intelligence to enhance reach, accessibility and efficiency.

Having satisfied the stringent judging criteria in this tightly contested category which included: Current Performance, Market Potential, Sustainability, Relevance in Vertical Industries, Rich Business Intelligence Presence, Scalability and Customer Experience, The Yo! Payments Gateway Application emerged the best from the pool.

To read further about MTN Innovation Award, click here.