Global Courant
With six of the seven African unicorns in the financial technology (FinTech) sector, the FinTech sector in Africa is booming; Industry experts expect the industry’s valuation to double by 2025 at $15 billion by 2021. Factors such as the youthful population, the growing internet population and access to mobile telephony are driving this increase in demand. This wave not only changes the way consumers use financial products, but also creates employment.
Nevertheless, reports from Findexable and McKinsey estimate that Africa’s FinTech skills gap is between 1.5 million and 3 million people. Factors for this skills gap, including the lack of qualified FinTech professionals, the lack of FinTech education and training programs, and the lack of investment in FinTech education, pose significant challenges to the industry’s growth potential.
Education and training programs play a vital role in developing the skills needed by the FinTech industry and are one way to bridge this gap. The talent gap is a spectrum of technical and non-technical competencies ranging from software engineering and data science to business development and PR and marketing. Investing in education paves the way for creating a prosperous future for Africa, by providing its thriving industry with skilled talent and new jobs, by fostering entrepreneurship and the development of innovative financial services, and by addressing financial inclusion through the increase reach (access) and raise awareness. Despite the educational benefits at the macro, meso and micro levels, the global supply side of FinTech education is under construction.
While the broad competencies for FinTech ensure sectoral access from diverse knowledge areas such as business management, informatics/engineering and banking and finance, specialized academic and non-academic FinTech programs are emerging. One of those programs (and probably the earliest) is Introduction to Hong Kong University FinTech Program which started in 2018. Today, more education and training institutions offer FinTech degree and non-degree (executive) programs in-person and online. The Center for Finance, Technology and Entrepreneurship (CFTE) is such a specialized FinTech learning platform. Institute for Digital Frontiers (DFI) is an African online training platform that develops skills for the digital economy through standalone and certification programs such as the Certified Digital Finance Practitioner (CDFP).
The first Inclusive FinTech Forum supports Africa’s capacity development through a specialized Online Certificate for FinTech in Africa course and a career forum for students and young professionals.
In addition, accelerators and incubators fill the knowledge gaps by providing a mix of (non-technical) business and management education, technical (software engineering, cybersecurity) and support skills such as networking and mentoring with experienced industry professionals. The GSMA Ecosystem Accelerator Program and Briter Bridges report identified more than 600 entities that support technology and digital entrepreneurs.
Closing the skills gap between traditional banking and fintech: the case of DFI
Founded in 2015, Digital Frontiers Institute (DFI) aims to “close the skills gap between traditional banking and new digital finance” and “increase the ability and capacity of Digital Financial Services (DFS) professionals in low-middle income countries, ultimately helping to design and deliver more efficient, effective and inclusive financial services at scale.” The flagship Certified Digital Finance Practitioner (CDFP) program, certified by the Fletcher School at Tufts University, includes two foundation courses and 19 career-related specializations Table 1 shows the reach of DFI and CDFPs as of December 2022. Of the 2,096 (27%) students on the 3-year CDFP journey, of which 433 (21%) are certified to date, 59% are from African markets and 33% are women DFI combines the practical learning components through Communities of Practice (CoPs) and a 6-week CDFP Practice Forum for individual learners who are not at CoP sites. The CoPs are active in 38 countries, 15 of which have established national associations for the further development of local ecosystems that promote national inclusion and equality. The umbrella body of the national associations, the Alliance for Digital Finance Associations, was established in 2021 to promote international links between the local associations.
Table 1: DFI and CDFP Performance (Source: Internal Documents)
DFI Community
CDFP community
CDFP penetration
Professionals reached
8,761
7,807
89.1%
To land
168
168
100.0%
Courses
20,027
17,371
86.7%
Instruction hours
830,000
660,438
79.6%
CoP locations
38
22
57.9%
“What we have achieved here is a new and innovative approach to scaling adult learning. Combining the capabilities of EdTech with the reality that learning only becomes skills with local context and human connection – we get closer to a physical university experience and the thinking behind the New Education Institutebut still be able to break through the limitations of available ‘seats’ in the physical university halls”. Gavin Krugel, CEO, DFI
Figure 1: CDFP Andragogy (Source: Internal Documents)
DFI impact assessments show that: “8 out of 10 students who take self-paced free courses drop out or drop out, those who continue finish them” And “paying students who follow their own pace are twice as likely delay or drop out than synchronous students”; emphasizing that student achievement and completion are dependent on funding (paying versus free) and mode of study (asynchronous/self-paced versus synchronous).
However, an independent evaluation of CDFP impact has proven that via CDFP:
Figure 2: CDFP impact results (source: internal documents)
Despite the reach and success of CDFPs, affordability of the program, consisting of cost and learning time, are limiting factors for approximately 38% of African professionals earning less than $10,000 per year. For DFI, a funding shortfall to develop new programs is a persistent constraint.
In summary, closing the skills gap in the African FinTech sector requires diverse strategies across the FinTech education value chain. First, develop a pool of qualified educators with subject matter expertise to create FinTech-focused programs and courses. Second, apply the right pedagogy or andragogy that provides FinTech professionals with the complementary knowledge and skills to succeed. Third, implement FinTech programs and courses through strategic alliances with universities and other educational institutions alongside gender-sensitive strategies to increase women’s participation. Finally, secure funding to develop FinTech education and training programs.
