Most read articles
Finance x TEch
written by Tomi. E Alimi Edited by Araoluwa Abdulazeez Ogundairo Revolutionizing the Banking and Investment service sector What exactly are Financial Technologies? In simple terms, they are NEW TECHNOLOGIES that seek to improve and automate the delivery and use of financial services. In 2021, McKinsey estimated that artificial intelligence (AI) can generate up to $1 trillion in additional value for the global banking industry annually. Banks and other financial institutions would therefore adopt an AI-first mindset. Some time ago people had to queue for hours to get a bank statement or withdraw cash. Financial Technologies have revolutionized the service landscape, with about 46% of people now using digital channels exclusively for their financial needs. Traditional banking is quickly being replaced by tech-advanced services which are making financial services easier, safer and cheaper. In addition, the advent of Big data has allowed financial services companies to extract a wealth of consumer data to understand and service their customers better. What impact do Financial Technologies have on Investing? Financial Technologies have made the investment sector more accessible. An example is ALGORITHM TRADING . These are a computerized way of buying and selling financial instruments at very high speeds in accordance with predefined rules and guidelines given to computer systems. It involves using computer programs to make trades based on defined algorithms fed into the program. Algorithm trading can also analyse insightful data and make relevant decisions much faster than a person could. This allows investors to take advantage of fast, computerized and accurate decision-making tools. It automatically updates, and adjusts strategies as prices, volumes and market volatility change thus reducing investment mistakes that can be caused by human error. In Conclusion: Fintech is revolutionising the financial landscape and completely changing how people manage their finances. Today, more and more startups are entering the sector looking to help deliver improved financial services to consumers. The fast-paced growth of this industry has not only caught the eye of financial institutions but big tech companies as well.
The Finance Professionals Network
Jun 24, 2022 · 2 min read
Finance x TEch
written by Lukman Usman edited by Araoluwa Abdulazeez Ogundairo Africa and the rise of the Fintechs Despite it being arguably just the latest update to the millennia-old evolution of credit, contracts, and banking, FinTech is one of the most explosive fields of the past and present decades. Venture capitalists, angel investors, traditional finance firms, governments, and the users each contributed to the massive improvement of its development in Africa as a whole. Advancements like cross-border payments , app-based stock trades, and automated financial claims became easy to operate. Africa insight in fintech and approaches. The year 2021 saw larger deals closed in Africa, as tech startups across the continent raised close to $5 billion and it is predicted to contribute $150 billion before 2025. Fintechs dominated the fundraising, accounting for nearly $3 billion, or two-thirds of all the investment realized by startups across the continent last year, a report by markets insights firm Briter Bridges shows. This amount was also more than double the $1.35 billion investment that fintech in Africa raised in 2020, and it’s three times the amount raised in 2019. In 2012, Y-combinator, a USA-based company that invests in start-ups, accepted its first Africa-focused startup, Wave, a fintech startup in Senegal. Every year since then has seen at least one African startup get into the famous accelerator programs. Kenyas’ fintech revolution, significantly contributed 82.9 % to the country's finances making it the highest in Africa. However, the African development bank has enhanced its attention towards the direction of landmark achievements by the Kenyans. In 2020, South Africa was ranked 37th in the world among fintech game-changer alongside other African countries by Global Fintech Index City. Nigeria Fintech background In Nigeria, like in other parts of the world, fintech is a buzzword, with the companies sprouting and operating in different niches Home to Africa’s largest population, Nigeria plays a pivotal role in fintech ecosystem growth in Africa which is largely driven by increasing smartphone penetration and a massive unbanked population. Nigeria is ranked among the top three fintech hubs in Africa. This is a mean feat considering how fintech has evolved in Nigeria despite a series of challenges that are attached. Fintech space in Nigeria should be regarded major contributor to the nation’s pulse. It took Nigeria fintech an average of 3 years, 6 months, and 23 days to become a unicorn in status. This shows how impact they have contributed on the nation's prosperity. An ecosystem that consists of consumers, financial institutions, fintech start-ups, investors, regulators, and educational institutions. This has created an opening FinTech companies have been quick to take advantage of, with many stepping up to develop enhanced propositions across the value chain to address pain points in affordable payments, quick loans, and flexible savings and investments, among others.
The Finance Professionals Network
Jun 17, 2022 · 3 min read
Finance x TEch
written by Quadri Badru; edited by Araoluwa Abdulazeez Ogundairo Cloud application in the finance industry As proper maintenance of business operations and financing is to a firm, so is the proper storage and processing of its data. The era of the on-premises data is fast coming to an end after the introduction of cloud computing. Initially accessed for entertainment, healthcare, finance and government, the need for the cloud is gradually evolving over time as it has been embraced by the majority of organisations. It is noteworthy that cloud spending rose by 37% to $29bn during the first quarter of 2020. In March 2017, the Cloud Industry Forum reported that the UK’s overall cloud adoption rate had reached a record high of 88%, an increase of 5% from 2016. Prior to this period, the financial service industry was reluctant to adopt this innovation in its practice due to the cloud’s outdated security concerns. As of today, more than 25 of the world’s 38 largest financial organisations and insurance businesses have partnered with Microsoft. The IBM and Bank of America partnership led to the creation of the Bank of America private cloud and that of Goldman Sachs and AWS brought about the GS Financial Cloud. How cloud computing is changing TradFi Saving time and costs Bank of America has saved about $2 billion by building its own cloud. The high cost of the establishment and operation of a bank can be attributed to the high cost of hardware acquisition and maintenance fees. This is a result of the creation of new data centres and servers, staff recruitment and training. All these costs can be avoided as cloud services are typically subscription-based, and companies can scale requirements up or down according to their needs. Better focus on the work that counts The cloud is freeing the finance function from administrative tasks, helping them win back valuable time from mundane tasks and, in doing so, giving them the opportunity to lead digital transformation. This is particularly important for businesses that are operating across multiple markets with numerous target demographics and must optimise all aspects of their organisation to retain a high level of efficiency. Creation of tailor-made products for consumers The cloud’s combination of big data and potentially unlimited computing power allows banks to secure better insight into their clients than ever before as it enhances firms’ ability to develop systems that can render services that meet their clients’ expectations. Big data insights There are still compliance issues to be mindful of with the cloud, but leading cloud providers and other expert consultants can help ensure businesses meet relevant regulatory policies and processes. Data security Safer data handling is one security benefit of the cloud, which provides an additional layer of protection over data stored on laptops or USB drives that can easily be stolen or lost through the physical security measure managed by the firm.
The Finance Professionals Network
Jun 11, 2022 · 3 min read
FPN Newsletter Issue #68: The Governor wants some more
Analyst Corner Do farmers throw Emefiele’s hat in the ring? As the race to the 2023 general election intensifies, a number of politicians across party lines have declared their interest in contesting for the highest office in the land, with little or no reaction from Nigerians. However, news broke late Friday afternoon that set tongues wagging all weekend long; in Twitter spaces, Clubhouse rooms, WhatsApp groups and possibly, the very corridors of power in Aso Rock. Yet another person had allegedly picked up the pricey N100mn Presidential nomination form under the All Progressives Congress (APC). But this time, it was not a random politician, it was the Governor of the Central Bank of Nigeria (CBN) – Mr Godwin Emefiele. The man that has steered the economy of the nation since 2014. The sitting CBN Governor’s intention to run for President throws up a number of concerns. First off, it contravenes the provision of the Public Service Rules, CBN Act, and the Constitution, calling to question the legality of his intentions. Secondly, running on the platform of the APC is as partisan as it gets. Given the sensitive office Emefiele occupies and the relevance of maintaining a non-partisan, independent Central Bank Governor, it should come as no surprise if (and when) the international community loses confidence in the institution that is the apex bank. As one commentator put it, “we are witnessing the erosion of institutional credibility in real-time”. Also, who is to say how long the Governor has nursed this ambition, who his backers are, and the steps he may (or may not) have taken to fortify himself with State resources to pursue his ambition? All of these questions beg for answers. Answers that Godwin Emefiele fails to provide in his 163-word thread posted on Twitter Saturday afternoon. If anything, his thread raises even more questions. We would stop here and await God’s divine intervention (as the CBN Governor himself has said) due over the next few days. Hopefully, the Almighty is still a non-partisan God. Top headlines for the week US Fed Raises Rates, Again! The Fed hiked interest rates by 50 basis points on Wednesday, following a 25-basis point increase at its previous meeting. Investors in the financial markets anticipated the decision, but it does not diminish the fact that it was the Federal Reserve's first 50-bps rate hike in 22 years. Moreover, Fed Chair Jerome Powell hinted that monetary officials are not yet inclined to raise the aggressiveness of rate hikes. We believe the most important takeaway from the meeting was that the Federal Reserve is committed to rapidly tightening monetary policy in the coming months to catch up with the inflation curve. This week will see the release of the Consumer Price Index (CPI) and Producer Price Index (PPI) for April 2022. This will be the biggest headline in the coming week, as it will reveal if price increases have begun to level out after rising 1.2% m/m and 8.5% y/y, in March 2022. OPEC+ Forges Ahead… OPEC+ agreed to adhere to last year's plan to gradually release slightly more than 400,000 barrels per day of oil onto the market, maintaining the status quo. The OPEC+ policy meeting takes place against the backdrop of skyrocketing oil prices, which reached their highest level since 2008 in March at over $139 per barrel as a result of Russia's invasion of Ukraine, which worsened supply concerns that were already fueling the price increase. In June, the union chose to maintain its schedule by releasing an additional 432,000 bpd of oil onto the market. The OPEC+ summit took place after the European Union proposed a phased ban on Russian oil as its strongest action so far in relation to the Ukraine conflict. The embargo will certainly push Russia to reroute flows to Asia and substantially limit output, while the EU will compete for the remaining available supplies, contributing to an increase in oil prices. … Increases Nigeria’s Production Quota Despite Poor Performance OPEC+ increased Nigeria's oil production quota for June 2022 from 1.735mbpd in May 2022 to 1.772mbpd, resulting in a 19,000-barrel oil difference. This development was necessitated by the limited supply of crude oil on the global market despite robust demand since the numerous sanctions imposed on Russia for invading Ukraine caused supply shortages. Despite the fact that Nigeria has not even come close to fulfilling its goal, it is good news for the government's crude oil production benchmark of 1.88mbpd for 2022. However, it appears unlikely to be attained in the near term as the country grapples with inherent challenges, such as an increase in oil theft and pipeline vandalism, among others. Did you know That there are now just two countries in the whole world were Coca-Cola products cannot be bought or sold (at least, not officially). They are Cuba and North Korea (according to the BBC) as both countries remain under long-term US trade embargoes (since 1962 and 1950 respectively). Box Office banger This weekend, we’re watching both Doctor Strange in the Multiverse of Madness (from Marvel Studios), and Blood Sisters (from EbonyLife Studios). This writer has actually seen both movies (I just got back from the cinema a few hours ago), but he’d be kind enough to spare you the details (at the risk of dropping spoilers). As of Saturday morning, Doctor Strange had grossed $229mn globally (higher than its $200mn budget) and was on track to beat its worldwide $300mn opening projection. This would mark the second-best box office debut of the Covid era after Spiderman: No Way Home ‘s $582mn and ahead of The Batman ‘s $251mn. Quote of the week “If you want to be happy, be.” – Leo Tolstoy
The Finance Professionals Network
May 9, 2022 · 5 min read
The FPN Newsletter Issue #67: Finally we feast
Analyst Corner Again, Crypto Adopted as Legal Tender. On the 27th of April, the Central Africa Republic (CAR) signed a bill to adopt Bitcoin as a legal tender alongside the CFA franc. CAR will be the second country after El Salvador and the first and only African country to legalise cryptocurrency for now. Cryptocurrency has gained global popularity and usage in this past decade, although government and regulating agencies are still sceptical about its safety. Many countries including China and Qatar have absolutely banned all forms of cryptocurrency, 4 African countries including Algeria, Egypt, Morocco, and Tunisia have banned all forms of cryptocurrency trading, while 42 other countries have levied other forms of prohibition including Nigeria, Cameroon, and Gabon. However, the prohibition doesn't mean citizens in these countries are not exchanging cryptocurrency, matter of fact, the Geography of Cryptocurrency report 2021 reported that Africa's crypto market grew by 1200% between 2020 and 2021 with Kenya, Nigeria, Togo, South Africa, Ghana and Tanzania among the top 20 occupying fifth, sixth, ninth, sixteenth, seventeenth, and nineteenth position respectively. Is this a good development? Though the development seems great and interesting for the Central Africa Republic (CAR) there has been scepticism as to whether CAR was ready for such development, for reasons including: 1. CAR has one of the lowest internet penetration among African communities. 2. CAR is one of the poorest countries in the region. 3. In CAR only about 48% of its population have access to mobile connection. The question is how do they intend to trade cryptocurrency? Which means there'd be a large number of its population excluded. 4. CAR is one of the most troubled countries in the region, the adoption of cryptocurrency means the CAR central bank will lose control of financial transactions via cryptocurrency and this may encourage Money laundering, Tax evasion, Terrorist financing and Fraud altogether. What should have been done? The CAR should have adopted a digital currency which as opposed to the cryptocurrency will allow its central bank to exert some control over financial transactions. Top headlines for the week USA’s GDP Dropped in Q1:2022 While the most conservative analyst expectation was a 1.0% growth in Q1:2022, Gross Domestic Products (GDP) statistic released last week showed that the American economy contracted by 1.4% YoY. The decline in the GDP was a result of the drop in fixed capital investments, defence expenditure, and a substantial imbalance in trade. While the Federal Reserve plans to embark on a series of interest rate hikes which further poses a risk to GDP by discouraging capital investments, the GDP contraction is reckoned to be a temporary situation which is not likely to persist into subsequent quarters. This optimism is particularly premised on the expected improvement in net trade and defence spending. Specifically, the substantial trade imbalance resulting from businesses restocking inventory, which counteracted the rise in consumer spending in the period, is not expected to persist. Elon Musk Finally Buys Twitter Arguably, the widest known news in recent times is the move by Elon Musk, the CEO of Tesla, to buy the microblogging social media, Twitter. During the week, Twitter’s board members finally approved Musk’s USD44bn offer to buy the social media giant and take it private. Recall that earlier, Twitter’s board members introduced a poison pill to deter Musk from going ahead with the deal. However, following the board’s approval, the purchase by Elon Musk will be financed through a combination of cash, bank loans, and margin loans against Musk’s shareholdings in Tesla. CAR Becomes First African Country to Adopt Cryptocurrency Following a unanimous vote by the country’s lawmakers and the subsequent presidential assent last week, the Central African Republic becomes the first African country to adopt bitcoin as a legal tender. Globally, the country is the second country to make the controversial move, after El Salvador. The cryptocurrency would be used side-by-side with the CFA Franc in exchange for goods and services in the African country. This decision was taken in a bid to solve current challenges in the country. Did you know Although it seems unbelievable that in the 1960s, Zambia was in the race for the first to get to the moon. Zambia had a space program which was not successful. Edward Makuka Nkoloso, a science teacher and the self-appointed director of Zambia’s unofficial National Academy of Science, Space Research and Philosophy was the driver of the space mission in Zambia. 16-year-old Matha Mwamba was chosen as the first person to attempt a mission to Mars. Nkoloso reportedly sought funding from countries and organizations but he received nothing back except good wishes. Box Office banger Fun Size (known as Half Pint in some countries) is a 2012 American teen comedy film directed by Josh Schwartz and written by Max Werner. Fun Size was released in theatres on October 26, 2012, by Paramount Pictures and grossed $11 million against its $14 million budget. Though it doesn't always hit the hilarity target, this tween-targeted romp strikes a sweet-but-not-sappy balance. The fun to be had in Fun Size... is neither gigantic nor minuscule; it's just about fun-size, which is probably enough. Quote of the week “Rest is not idleness, and to lie sometimes on the grass under trees on a summer's day, listening to the murmur of the water, or watching the clouds float across the sky, is by no means a waste of time.” - John Lubbock
The Finance Professionals Network
May 2, 2022 · 5 min read