Question

Financial technology, also known as FinTech is an industry composed of companies that use new technology and innovation with available resources in order to compete in the marketplace of traditional financial institutions and intermediaries in the delivery of financial services. The recent COVID 19 curfew period in Mauritius saw a huge surge in demand for such services, both for consumer and corporate use, as it helped to perform financial activities without risks of infection.

a) List at least 2 Fintech services that are provided by local companies in Mauritius. (1 mark)

b) List and explain two benefits of each Fintech services mentioned.

c) List and explain two possible drawbacks of each Fintech services mentioned.

d) Will Fintech have a very high adoption of active users in Mauritius by 2021? Debate.

Answer 1

MAFH is supported by the Mauritian government, regulatory authorities and financial services providers. The Mauritian government's ambition is exactly what the fintech industry should be fueling: the potential for population growth and a limited traditional economy, according to Albert Maasland, chief executive of Crown Agents Bank.

"By opening the doors to change and innovation in this space, Mauritius is ahead of many markets, including many OECD countries," Maasland said. "This adoption is a major factor in determining whether the country can become the next fintech hub."

Fintech is evolving to incorporate emerging technologies
Fintech is actually a technology used for financial services, or business transactions in businesses. Fintech over the past few years has moved away from background data centers to embracing fully automated processing systems - often involving emerging technologies such as artificial intelligence, blockchain, and robotic process automation - including cloud-based services.

Increasingly, regulators are under pressure to accept that the latest technology solutions in the wallet industry are a reality that will influence the way people do business, notes Graham Patrick, Maitland's top customer service manager, financial, corporate and political communications advice.

"Instead of resisting what many see as 'inevitable', the Mauritian government in its place has seen the digital revolution offer an opportunity for small economies like Mauritius to attract investors," Patrick said. He adds that innovations, in the form of artificial intelligence and fintech, including the blockchain, are seen as a way to increase private investment and employment in Mauritius.

The Fintech industry is growing across Africa
According to Africa's Disrupt Finnovating for Africa 2019: A rethinking of Africa's financial services report, the number of fintech startups on the continent has grown by almost 500 from over 300 in 2017, and raised more than $ million 132 in 2018.

The fintech trend in Africa is growing, but according to the 2019 EY report, South Africa, Kenya and Nigeria are the three major fintech destinations that are fueling growth. "These areas boast natural fintech systems compared to the rest of the continent," the report said. The African fintech landscape has grown by about 24% annually over the past decade, according to the report. The report did not mention Mauritius at all, but many believe it is well-established for its technical expertise.

The island nation still has work to do. Maasland explains that the law is ignored, and the risks associated with cyber security, money laundering or many other issues are ignored.

"By focusing on other fintech facilities and programs, Mauritius is working to address these issues and promote longevity and security in fintech development," Maasland said. He cited the National Sandbox Licensing Licensing Committee as an example, adding that similar soil boxes came from countries such as the U.K., U.S., Australia and Thailand. "It appreciates areas where legal or regulatory standards may be lacking to date and encourages entrepreneurs to consider their ideas in a regulated environment before presenting them," Maasland said.

Sandboxes are a way for fintech businesses to conduct testing in a controlled environment approved by the authorities. "Fintech startups and businesses can operate within the sandbox box for a set period of time without going through the normal authorization procedures set by regulators," according to MAFH.

Control is essential for fintech growth
Meanwhile, the introduction of Mauritius digital licensing services and the digital goods market could be useful to various international companies looking for a strong location to operate, said Patrick of Maitland. While it is good that Mauritius recognizes that cryptocurrency has value, is not a legal tender and is not regulated, he adds. There is still work to be done, therefore, to ensure that the country can use the power of cryptocurrency to attract professional investors and investment funds.

In January, the Economic Development Board issued five licensed sandbox licenses to fintech companies, including PIRL and FundKiss, which is the world's first complex platform, allowing them to operate fintech operations across Mauritius.

The Mauritius Financial Services Commission is also drafting regulation of platforms to make more money for more people to provide better opportunities to support entrepreneurs. The result of this knock is also a very important vote of confidence that it shows to the public. Kenya's Communications (Amendment) Act is a comprehensive study of how the government's adoption of new technologies is critical to promoting social acceptance and successful integration, explains Maasland.

Lord Meghnad Desai, chairman of fintech and the Innovation-Driven Financial Services Regulatory Committee, told the first committee meeting that Fintech's major transformation of the financial services sector was a great opportunity for Mauritius to "utilize its technology, and its good reputation in the financial services sector." fintech entrepreneurs and position themselves as the fintech and technology hub in Asia and Africa and leading the way in the development of Artificial Intelligence in the region. "

For businesses looking to reach and do business with Mauritius, Maasland says local technology is important. In less developed markets with limited infrastructure, closer knowledge of financial procedures and liaison with the right institutions are essential to ensuring financial security and secure trading relationships.

In Maasland's view, Mauritius is not just a gateway but a prime example of the continent of Africa. "With the same economic outlook, other African governments can look at and learn how to turn many unwritten people into an emerging opportunity," he said.

The power of the unwritten is exercised Fintech has long been regarded as a means of bringing equity to the underprivileged and unpaid, but the law has been a problem, which is why the Mauritian regime is promising.

As the only international financial aid institution and a member of all major regional organizations in Africa, Mauritius is an important source and source of investment for low-income countries and directs most of its foreign direct investment to Africa, and other Asian countries as well. "The country's value as a gateway to Africa puts it well to help and encourage a new wave of investment in the fintech space," Maasland said.

Mauritius' unique relationship with Africa - at the edge of the continent - places it as a key player in the continent's fintech industry. As Maasland points out, leading by example and facilitating investment across Africa, Mauritius will play a key role in enabling other African regions to develop their fintech sectors and place them on the world map.