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Can AI be the Catalyst for Financial Inclusion in Africa?

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It’s difficult to imagine a time before the widespread adoption of mobile technology in Africa – particularly where financial services are concerned. For millions of unbanked people, transactions were limited to cash, postal services or even the barter system. Now, in much the same way as mobile payments completely disrupted the status quo, AI has the potential to propel the fintech industry into a new era of financial inclusion. And perhaps most exciting of all is that Africa is not simply catching up with AI-powered developments, but surging ahead with innovative solutions that have considerable implications for the underbanked.

Already, homegrown fintech companies have completely changed the way people in Africa transact, helping to reduce reliance on cash transactions.

Innovative payment solutions have revolutionized access to essential services, such that millions of people can now afford everyday necessities like airtime. In fact, research from McKinsey has shown that these items are now available to lower-income households at up to 80 percent less of the cost associated with traditional banking players.

And when one considers that half of Africa’s population is still unbanked or underbanked, we can begin to appreciate just how dramatic an impact the fintech sector has had on the very nature of financial services in Africa.

The net result in Kenya, for example, is that the adoption of digital payment solutions helped increase financial inclusion by as much as 25 percent in just 15 years.

Banks, for example, can make their services more affordable to their customers by rolling out AI-powered chatbots to handle routine queries, at the same time sparing them from having to travel to a bank branch.

Already, fintech companies are helping their customers to improve their financial literacy by using these same chatbots as affordable advisors. Drawing on the power of AI, these bots can produce personalized recommendations such as budgeting strategies so that the user can make a more informed financial decision.

For some time now, Africa has been at the forefront of the payment technology revolution – empowering millions of people with access to financial services. Imagine what more could be done through the unprecedented power of AI? To turn that opportunity into reality tomorrow, we must begin by ensuring the groundwork for AI transformation is done today.