Digitization must be responsible – FSCADigitization must be responsible – FSCA

Protecting underserved consumers is a prerequisite for their digital transformation, according to Awelani Rahulani, head of the fintech department at South Africa's Financial Sector Conduct Authority (FSCA).

Rahulani shared these sentiments during a panel discussion titled "Driving Digital Transformation While Managing Costs: A Strategic Balancing Act" at the 2025 Africa Fintech Forum, in Johannesburg South Africa this week.

"As regulators, we support digitization in the financial sector, but we believe that it should be done responsibly, we should always make sure that we balance the risks and promote innovation," he explained.

Brian Mahlangu, VP of product for mobile at Absa Group said that when looking at the current African constraints, there are untapped markets that require faster technology to unlock opportunities.

"We need to view digitization as an ecosystem so that there is not just a single player in the system but multiple players that need to make this system work," added Akhona Bashe, the strategic partnerships and new capability development lead at Liberty Group South Africa.

Legacy systems vs. digital agility

Mahlangu said that even though legacy systems make day-to-day operations efficient, there are associated risks.

"Some of the risks include downtime – imagine going to a branch and the system is offline, that impacts businesses. When we consider working with fintechs, it is important as they offer the flexibility that traditional banks need," he explained.

Rahulani said regulators are also seeing fintech companies that are not familiar with how regulation works.

"However, when you look at the traditional incumbent, they are familiar with regulation as they are already regulated. So, when you bring the two together in partnership, there is a synergy that comes out of it," Rahulani continued.

"Whatever the service a fintech wants to render, because they have partnered with a traditional bank they can comply with regulation," he said.

Understanding customer needs

Bashe said corporates need to understand the customers they serve, to financially include them.

"We need to ensure that we are tailoring solutions that speak to them, solutions that speak to their values, their affordability, the systems they navigate in. We need to build solutions that are desirable, feasible and viable," she explained.

She said that for corporates to financially include underserved communities they need to address and fix what she called a "broken system."

"From a financially inclusion perspective, we are looking at a vulnerable market, the lower-income market. A lot of those people rely on public transport to get around. When the petrol price increases, taxis increase the price. However, when the petrol price decreases the taxi fare stays the same," she explained.

She added that other financial pressures, such as rising food prices, further restrict low-income consumers' financial choices.

"By the time they come to us, requesting financial services, they are not in the best shape financially. They have gone through this journey and are now not in the best position to be offered financial services because of this broken system," she continued.