Fintech has arrived and it’s changing the economy

Fintech has arrived and it’s changing the economy

The unemployment rate in South Africa is at an 11-year high, with 5.7 million people finding themselves without a job. The technological boom in the financial sector is not only making waves in innovation, but it’s also creating jobs and redefining employment roles within existing, traditional businesses.

Technology can create employment opportunities

Confidence in South Africa from a financial and investor point of view, is the lowest it has been in 5 years, according to Rand Merchant Bank’s Bureau for Economic Research. Because of the somber outlook on the South African economy, investment from the private sector has been limited, hindering job creation. The need for startups to emerge has never been more pressing. “Startups and small businesses contribute significantly to the economic and social development of South Africa by not only birthing innovation and change, but also by helping to alleviate poverty by means of job creation”, says Glen Jordan, director of startup fintech firm, IMB, based in Cape Town.
With the current digital disruption in the financial sector, more and more fintech startups are coming to the fore. Financial technology companies are springing up in tech hubs like Cape Town and Johannesburg especially, and according to Bradley Mehl from Kurtosys, a seed funder called Techstars will invest in 10 fintech startups, with with the first funding being allocated in March 2016.
South Africa is a big growth market where fintech is concerned. With this growth will not only come innovation and clever business solutions that will change the financial sector landscape, but growth means more and more startups emerging, which means more and more jobs are being created. With the changing face of technology, we will also find a redefinition of existing roles into more digital-oriented ones, with the skill set of many expanding.
Fintech startups are one up on traditional banking
We see it everywhere: new and innovative ideas and technologies are disrupting the financial sector. Many of these revolutionary technologies are shamelessly invading the spaces that are predominantly owned by banks or other financial services providers – changing the face of finance as we know it.
In this fast paced, highly connected, digital era that we live in, we find that there is a constant demand for financial service products to actually add-value in people’s lives. This is where fintech is proving to be so invaluable, as it completely reimagines and remodels traditional banking products. New fintech players are able to innovate and bring completely new systems to the party as they have no legacy systems and revenue to protect. Glen believes that traditional finance options are a slow way of doing things and are busy dying out, and soon digitally advanced methods will be at the forefront of the financial sector. Next generation banking is taking over.

FinTech is changing the face of finance.

We hear about fintech startups providing invaluable services to customers, like alerting them when banks and credit card issuers charge hidden fees. We hear about companies offering financial planning tools and services – often zoning in on a niche, making the service all the more bespoke. We hear about companies like IMB that are reimagining financial services from the ground up in order to offer a system that creates wealth for their clients and using an innovative route to market, and are able to create employment at the same time.
The financial digital revolution has arrived, and it’s here to stay. According to KPMG, “global investment in fintech companies totalled US$19.1 billion in 2015, with US$13.8 billion invested into VC-backed fintech companies.” The boom has just begun. Agility, constant evolution, reinvention and innovation is key to keeping this sector booming and thriving – changing the face of finance.
Article by Danielle from http://www.lumico.co.za
Photo by HLundgaard downloaded from https://commons.wikimedia.org/wiki/File:Mobile_payment_02.JPG
 

Proudly South Africa – Telling an entrepreneurial story?

Proudly South African Entrepreneurs

Chatting to business owners exhibiting at the Buy Local Summit was inspiring. So inspiring that I almost entirely missed the official programme. Dragging myself away from the businesses exhibiting I attended the sessions after lunch. Over three sessions I was left with a distinct sense that the Proudly South Africa lacked a strategy and an identity. The panelists all emphasised useful points on the need for leadership in South Africa, social dialogue and raised a couple of interesting experiments in supply chain and franchising. Nothing wrong with these statements, but there was little or no attention on how this related to increasing the demands for South African products by South Africans. It is typical of all conferences in South Africa, general calls for leadership without what conference goers call ‘actionable insights’. As I listened to the interviews on radio and TV on the event, my sense of a directionless campaign grew, despite me nodding to the fact that buying local was good for economy.
The Buy Local Summit is the premier event for Proudly South Africa, an organisation aimed at promoting South Africans to buy local goods and services. The official message from leaders inside and outside of government was that buying locally was patriotic, was supportive of job creation and contributed to the economy of South Africa. Outside in the exhibition space, business owners emphasised not the link between my wallet and my patriotism, but rather the link between their product or service and how it could help me. For example, businesses focussed on designing products, focused on the innovativeness or uniqueness of the product. Next, they emphasised international quality of their products, and that they were fairly priced. I quizzed them on whether they thought South African were not patriotic by not buying more South African products, and they argued that the real problem was customers knowing about the product. Those in manufacturing and construction always added that they found it difficult to compete with the ‘big boys’. Most importantly, they understood Proudly South Africa not as patriotic buying, but rather that the country has lots going on and that they could compete internationally. Herein, may lie a future direction for Proudly South Africa campaign. A campaign that emphasises the uniqueness, quality and price points of local products.

Learning from Shot ‘Left

The Shot ‘Left campaign offers a way to illustrate what is possible. The campaign emphasises memories, fun and family all within South Africa. The Shot ‘left campaign asked the nation to change our perception, offering memories, fun and quality time. They were not arguing that the intrinsic value of the South African tourism offering was one of patriotism, but rather than great and affordable holidays are possible in South Africa. In a way it transforms what it means to be South Africans, especially for families who have never had a holiday before. It opened markets and created a new segments. This is important, because the process sees government and social partners working together to create new markets, through an exceptionally targeted campaign. In short, it is an effective and positive marketing campaign with none of the policy babble, although its motivations are to reach a policy objective of growing tourism by South Africans in South Africa. Proudly South Africa needs to do something similar. It is a marketing organisation, and needs to devise a marketing strategy that emphasises the intrinsic value of South African experience. What would such a marketing campaign focus on? First, it would deal with questions of quality of South African products, erroneously regarded as inferior to imported goods Second, it will reposition South African goods as being ‘cool’ and well designed, emphasising the intrinsic value of South African brands. Third, it would have a very specific target audience for its marketing campaign, not a broad appeal to conscious of South Africans.

Creating local demand

Now, one might be wondering what this tells us about human nature. Should an appeal to patriotism not be enough?
The problem with the current message is that it is not actionable, even for patriotic ethical consumers who are seeking local products. The problem is magnified for consumers not already convinced to buy local products. A marketing campaign linked to easy ways to find and purchase South African goods would make Proudly South Africa relevant. It would offer an important platform for South African companies, especially those that produce manufactured goods, a way to reach a wider audience. In so doing, the benefits of having many smaller businesses and more employment would be more realisable. The clarion call to patriotic shopping needs to be replaced with a message that South African products are cool and quality products. This change in the marketing strategy in itself is an important starting point, but will require complimentary initiatives to help growing businesses operate and succeed in the South African economy. Much of the wider economic strategy is outside the ambit of Proudly South Africa, but it can play a crucial role in creating demand for locally produced products and services.

GIBS Enterprise Development Academy (Scholarships Available)

The Gordon Institute of Business Studies (GIBS) has an exciting opportunity for business owners in the manufacturing and green economy sectors and a supplier development programme. The opportunity is aimed at being accessible to those that would not usually be able to afford it. GIBS explains the model as follows:

GIBS provides high quality business education and support services for small and growing businesses that create and demonstrate social and economic impact. To ensure that this education and support is accessible to those who would not ordinarily be able to afford it, the Academy works primarily on a scholarship-based model. This is made possible through the generous contribution of public and private sector partners committed to enterprise development.

Details of the programme are outlined below. All the details are on the GIBS Website. Click Here.
Below you can find an overview of what is being offered.
Click her for green economy details.
Click here for Supplier Development Programme

Small Business Boost Programme – applications open

Entrepreneurship education for those in the green economy
August – November 2016

Overview
The Small Business Boost Programme, funded by J.P. Morgan, aims to promote small business growth and job creation for those involved in providing solutions for the green economy. The programme will provide four months of business and management education and six months of support services to 100 small businesses in Gauteng. It seeks to empower entrepreneurs with the knowledge, skills and resources to grow in this niche sector.
Details
The programme is funded by J.P. Morgan. A refundable commitment fee will be charged for participants. There are two days of classes every second week for four months followed by six months of support services. Classes start in August and end November 2016, after which the six month support services ensue.
How you will benefit:
• Foresee and address challenges faced by businesses in this niche sector;
• Communicate and market the value of your solution;
• Anticipate and manage change better;
• Navigate the supply chain of big businesses;
• Approach financing for growth using unique modelling techniques relevant to the sector;
• Learn how to overcome challenges using cutting-edge business management strategies relevant to the sector; and
• Identify strategic growth opportunities that exist across the rest of the continent.
In order to apply, entrepreneurs must fulfil the following criteria:
• Operate within the manufacturing/green-economy sector in Gauteng;
• Have been in operation for at least one year;
• Have an annual turnover of between R200 000 R20 million;
• Employ at least three people; and
• Work in the business full-time and have minimum 35% shareholding.
Programme Methodology
Four months of business training (four days per month) on the subjects of business modelling and planning, marketing, finance, operations management, leadership skills and new business development as is relevant to the green economy;
Six months of support services, including: monthly mentorship sessions and coaching circles, access to capital through financing partnerships, networking events, access to new markets and peer learning opportunities;
Field visits, soft skills workshops, and entrepreneur guest lectures; and
Four dialogue events with the manufacturing/green economy sector to share perspectives on sector challenges.

Transnet GIBS Supplier Development Programme

 Entrepreneurship education for those in  manufacturing  /  engineering / processing businesses
June – September 2016

Overview 
Transnet has partnered with GIBS Enterprise Development Academy to deliver their Transnet GIBS Supplier Development Programme –    a 10-month business management scholarship at GIBS which is specifically focused for manufacturing/engineering/processing businesses.
Details
 A commitment fee of R1,500 per candidate will be required upon acceptance onto the Manufacturing/Engineering/Processing programme and will be refunded upon successful graduation.
Content covered during this programme:

  • Leading oneself/Personal Mastery;
  • Entrepreneurship & Innovation;
  • Creative Thinking & Strategy;
  • Business Model & Business Plan Overview;
  • Financial Strategy and Financial Management;
  • Compliance, Governance & Taxation;
  • Marketing, Sales & New Business Development;
  • Negotiation Skills;
  • Leading Others and Leading an Organisation; among other modules

In order to apply, entrepreneurs must fulfil the following criteria:

  • Own and run a manufacturing/engineering/processing business
  • Earn an annual revenue of  at least R200,000 (total sales in one year)
  • The business must show growth potential
  • The entrepreneur must have at least a matric but this may be assessed on a case-by-case basis
  • The business must be trading for at least 1 year

Programme structure:
4 months of academic sessions focused on successfully running and managing an SMME (two consecutive classroom days every two weeks)
6 months of support services (coaching, mentoring and additional workshops).
Remember : All the details are on the GIBS Website. Click Here.

Consistency on ZApreneur

ZApreneur is an important part of my life, and has become important to so many of our dedicated readers.  However, ZApreneur has been a ‘hobby’ and I have tried to squeeze updating the site up between consulting work, pursuing various opportunities, and between family and friends. This translates into weeks with lots of updates, and weeks without any updates and analysis.
Starting this week, I am scheduling a consistent block of time to ensure that the site is updated regularly. Two reasons:

  1. ZApreneur will develop only if I dedicate time to it consistently. After five years of running this site, it is no longer a nice hobby. And, I think we can still do somethind awesome on this site.
  2. South African entrepreneurs deserve better.

To track progress I have added this table, and will update it regularly. The goal is once a week, every week for 2016.  Is this not a cool idea!
[table id=26 /]

Work sucks! Join an entrepreneurial network

For several years, a grouping of entrepreneurs have been  running an SME network with the City of Johannesburg – Sandton Library. One of the key persons in the network is Yusuf Mahomedy, who runs the website Work Sucks. 
He writes on his website:

From 2008 – 2014 and again this year, we are working with the City of Johannesburg – Public Libraries to assist entrepreneurs start and build their business through free SME briefings. These briefings are held in the Sandton Library, in Nelson Mandela Square.

I love the idea of using public spaces like libraries for entrepreneurial networking events.
They invite you to attend our next free event to:
* Get your career or business off the ground
* Explore business challenges & ideas
* Network with other entrepreneurs
* Market Yourself for employment or business opportunities.

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Editors Note: So, you have been warned. A part of the network is promoting your business. Is that not what a network is about.

On ZApreneur, we want to highlight useful opportunities, and especially smaller initiatives. If you have a small networking event, do let us know. If you selling tickets to an overpriced and over-hyped conference, do not contact us.
Go attend.