With six of the seven African unicorns in the financial technology (FinTech) sector, Africa’s FinTech sector is booming; industry experts expect the $15 billion 2021 valuation of the sector to double by 2025. Driving this surge in demand are factors like the youthful population, the growing internet population and access to mobile telephony. Besides changing the ways consumers utilise financial products, this surge is creating employment opportunities.
Notwithstanding, reports from Findexable and McKinsey estimate Africa’s FinTech skills gap is between 1.5 million and 3 million people. Factors for this skills gap, including the lack of qualified FinTech professionals, the lack of FinTech education and training programs, and the lack of investment in FinTech education, pose a significant challenge to the sector’s growth potential.
Education and training programmes play a crucial role in developing the skills needed for the FinTech industry and are one pathway to bridging this gap. The talent gap is a spectrum of technical and non-technical competencies, ranging from software engineering and data science to business development and PR and marketing. Investing in education sets a path for creating a prosperous future for Africa, providing the flourishing industry with skilled talent and new job opportunities, promoting entrepreneurship and the development of innovative financial services, and addressing financial inclusion by expanding reach (access) and raising awareness. Notwithstanding the educational benefits at the macro-, meso- and micro-levels, the global supply side of FinTech education is budding.
Though the broad competencies for FinTech guarantee sectoral entry from diverse knowledge areas like business management, computer science/engineering and banking and finance, specialised academic and non-academic FinTech programmes are emerging. One such programme (and probably the earliest) is Hong Kong University’s Introduction to FinTech Programme which started in 2018. Today, more educational and training institutions are offering FinTech degree and non-degree (executive) programmes in-person and online. The Centre for Finance, Technology and Entrepreneurship (CFTE) is one such specialised FinTech learning platform. Digital Frontiers Institute (DFI) is an African online training platform developing skills for the digital economy through standalone and certification programmes like the Certified Digital Finance Practitioner (CDFP).
The maiden Inclusive FinTech Forum is supporting Africa’s capacity development through a specialised Online Certificate for FinTech in Africa course and a Careers Forum for students and young professionals.
In addition, accelerators and incubators are filling the knowledge gaps by providing a blend of business and management (non-technical) education, technical (software engineering, cybersecurity) and enablement skills like networking and mentoring support with experienced industry professionals. The GSMA Ecosystem Accelerator Programme and Briter Bridges report identified over 600 entities providing support to technology and digital entrepreneurs.
Filling the skills gap between traditional banking and fintech: The case of DFI
Established in 2015, Digital Frontiers Institute (DFI) seeks “to fill the skills gap between traditional banking and new digital finance” and “grow the capability and capacity of Digital Financial Services (DFS) professionals in low-middle-income countries, ultimately contributing to shaping and offering more efficient, effective and inclusive financial services at scale”. The flagship Certified Digital Finance Practitioner (CDFP) programme, certified by the Fletcher School at Tufts University, comprises two foundation courses and 19 career-related specialisations. Table 1 presents DFI and CDFPs’ reach as of December 2022. Of the 2,096 (27%) students on the 3-year CDFP journey, of which 433 (21%) are certified so far, 59% are from African markets and 33% are women. DFI blends the practical learning components through communities of practice (CoPs) and a 6-week CDFP Practical Forum for individual learners not in CoP locations. The CoPs operate in 38 countries, of which 15 have birthed national associations in further developing local ecosystems that promote national inclusion and equality. The umbrella body of the national associations, the Alliance for Digital Finance Associations, was formed in 2021 to promote international linkages among the local associations.
Table 1: DFI and CDFP performance (source: internal documents)
|DFI Community||CDFP Community||CDFP Penetration|
“What we’ve achieved here is a new and innovative approach to scaling adult learning. By combining the capabilities of EdTech with the reality that learning becomes skills only with local context and human connection – we’re closer to a physical university experience and the thinking behind the New Education Institute, yet can break the limitations of available ‘seats’ in the brick-and-mortar university halls”. Gavin Krugel, CEO, DFI
DFI impact evaluations show that: “8 out of 10 students on free self-paced courses defer or drop out, those that continue do complete” and “paying self-paced students are twice as likely to defer or drop out than synchronous learners”; emphasising that student performance and completion depend on financing (paying vs. free) and study mode (asynchronous/self-paced vs. synchronous).
However, an independent evaluation of CDFP impact has proven that, through CDFP:
Despite CDFPs’ reach and success, programme affordability comprising costs and learning time are limiting factors for about 38% of African professionals earning less than $10,000 per annum. For DFI, a funding gap to develop new programmes is a persistent constraint.
In summary, closing the skills gap in the African FinTech sector requires diverse strategies across the FinTech education value chain. First, develop a pool of qualified educators with subject expertise to create FinTech-focused programmes and courses. Second, deploy the right pedagogy or andragogy that will offer FinTech professionals the complement of knowledge and skills to succeed. Third, roll out FinTech programmes and courses through strategic alliances with universities and other educational institutions alongside gender-intentional strategies to enhance female participation. Finally, secure funding to develop FinTech education and training programmes.
Article by Professor Olayinka David-West, prof at Lagos Business School, Elevandi Ambassador.