Africa’s Fintech Growth Must Be Matched by Resilient Infrastructure - CEO
Fintech growth increases demand for resilient digital infrastructure.
Africa’s growing fintech sector will require stronger and more resilient digital infrastructure to cope with increasing transaction volumes and reduce service disruptions, Belema Fintech Acting Managing Director and Chief Executive Officer Michael Adesola has said.
Adesola made the remarks at the Nigeria Fintech Forum, where he highlighted infrastructure reliability, transaction failures and system interoperability as issues that require greater attention as digital financial services expand across the continent.
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Rising Transaction Volumes Put Pressure on Systems
According to Adesola, the expansion of fintech services is increasing the demands placed on payment infrastructure.
As more consumers and businesses use digital platforms for financial transactions, interruptions in payment processing can affect users regardless of where the failure occurs within the transaction chain.
He said the experience of the customer remains the same when a transaction fails, whether the problem originates from a bank, payment processor, switch or another service provider.
Transaction Reliability Remains a Key Concern
Adesola identified transaction failures as one of the challenges confronting the digital payments ecosystem.
He said users primarily want transactions to be completed successfully and may not distinguish between the different institutions involved in processing a payment.
This places pressure on financial technology companies and other participants in the payment system to maintain reliable connections between their respective platforms.
Need for Stronger System Resilience
The fintech executive called for greater attention to system resilience as digital financial services expand.
He said companies should test their systems under different operating conditions before deploying them at scale.
He also pointed to the importance of redundancy, which allows critical services to continue operating when part of a system experiences a failure.
Such measures can reduce the effect of technical disruptions on users and businesses that depend on digital payment services.
Interoperability Remains Important
Adesola also highlighted interoperability among financial technology companies, banks and payment infrastructure providers.
Nigeria's digital payment ecosystem involves multiple institutions and technology platforms, making connections between these systems important to the completion of transactions.
Greater interoperability can allow different platforms to communicate more effectively, although it also requires common technical standards, security measures and operational arrangements.
Digital Infrastructure Supports Financial Services
The infrastructure supporting fintech extends beyond the applications used by consumers.
Payment platforms depend on telecommunications networks, data centres, payment switches, banking systems, cloud infrastructure and cybersecurity systems.
Disruptions affecting any of these components can potentially affect digital financial services.
For this reason, infrastructure reliability remains relevant to the wider digital economy as businesses and consumers increasingly depend on electronic payments.
Infrastructure Investment Remains a Wider Economic Issue
The concerns raised at the forum also extend beyond fintech companies.
Reliable digital infrastructure supports businesses that use electronic payments to receive customer payments, pay suppliers and manage financial transactions.
Persistent service disruptions can increase operational difficulties for businesses and affect consumer confidence in digital payment channels.
Strengthening the underlying infrastructure could therefore support more consistent delivery of digital financial services.
Nigeria’s Fintech Ecosystem Faces Growing Infrastructure Demands
Nigeria has a large and expanding digital payments ecosystem, increasing the importance of reliable payment infrastructure.
As transaction volumes grow, payment service providers and financial institutions need systems capable of handling increased demand while maintaining security and availability.
The challenge involves both private-sector investment and the wider infrastructure environment, including telecommunications and electricity supply.
Resilience Requires Coordination
Improving the reliability of digital financial services also requires coordination among different participants in the ecosystem.
Banks, fintech companies, payment processors, telecommunications providers, regulators and infrastructure operators all play different roles in the transaction process.
Weakness in one part of the system can affect other participants, making coordination important when addressing recurring infrastructure problems.
Outlook
The comments by Adesola highlight infrastructure reliability as an issue that could influence the performance of Africa's expanding fintech sector.
For Nigeria, improving payment infrastructure, connectivity, system redundancy and interoperability will remain important as more consumers and businesses rely on digital financial services.
The focus, however, will need to remain on the reliability and resilience of the underlying systems rather than fintech adoption alone, particularly as transaction volumes continue to increase.
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