Africa's digital banking future

Sitoyo was in Mauritius for Absa’s recent launch of Google Pay and Spark by Absa, a move that places the island within the group’s wider push to make digital banking and payments part of customers’ everyday lives. For Sitoyo, who is the Group Chief Executive: Personal and Private Banking at Absa Group after leading M-PESA Africa, the launch also reflects a broader shift in African financial services. In an interview with Investor’s Mag, he said the next phase of banking on the continent will be shaped by purpose, trust, partnerships, artificial intelligence and the ability to solve practical problems for customers and businesses. He  argued that banks must start with the customer’s reality rather than with technology itself, because behind every transaction there is often a life event, a business need or a social problem to solve.

You have moved from one of Africa’s most successful mobile-money ecosystems to heading Personal and Private Banking at Absa Group. From your years with M-Pesa, what was the most important lesson you learned about serving African customers?

The most important lesson is to start with the problem you are trying to solve.

With M-Pesa, the starting point was purpose: transforming lives. In the beginning, the problem was very simple but very real. People needed to send money home. In 2007, with rural-urban migration, it was still difficult for many people to move money safely and quickly. M-Pesa began as a “send money home” proposition. Over time, it grew from that simple use case into a payments ecosystem, and then into the broader digital ecosystem we see today.

But the DNA never changed. The DNA was purpose. That is what drove the organisation, and it is also what drives me as an individual. I strongly believe that if society is successful, then we will be successful as well.

Africa provides huge opportunities for innovation because the continent still faces real problems, especially around financial inclusion and financial health. We also have to make sure that no one is left behind. In financial services, we often forget some parts of society: women, vulnerable customers, the elderly, and people living with disabilities.

Take visually impaired customers, for example. With cash, people can touch and feel money. With digital money, the experience is very different. That is the way I have always approached financial services: what problem are we trying to solve, or what opportunity are we trying to unlock?

I call it front-loading. You spend a lot of time understanding the problem before building the technology. Too many people start with the technology and then build solutions around it. For me, technology has never been the reason for building a product. You first understand the customer, understand the problem, and then design the solution.

In fact, you can whiteboard a product or service before writing a single line of code and already have a strong sense of whether it can work. Then you work backwards from the problem. 

That is the DNA I bring with me to Absa from a pan-African perspective, this is critical. 

Africa is one of the fastest-growing regions in the world. It has the largest youth population, and the middle class is rising. That creates enormous opportunity. Much of the continent is still cash-based or prepaid, with limited access to credit. That is a huge space for financial services to serve people better.

That is why Absa is such a business. Its purpose resonates with me: “Your story matters.” Everyone has a story behind them. For me, banking has to start from that understanding.

What does customer-centric banking mean in practical terms in Africa, where income levels, documentation, data availability and digital access vary so widely from one country to another?

I think customer-centric banking starts with understanding the different financial milestones in people’s lives.

Very often, banking is viewed in transactional terms: payments, accounts, loans, deposits. But behind every transaction, there is usually a life event. Someone may be paying for a wedding, buying a first house, buying a first car, paying for education, planning retirement, or trying to start a small business.

The role of banks and financial institutions is to look at customers from that perspective. At which point in someone’s life are we participating? How are we supporting them at that moment? How are we helping them achieve their goals?

This applies to retail banking as well. The ambition is to be present at every important stage of a customer’s life and to support them in a way that is relevant. That is why Absa’s purpose, “Your story matters”, resonates with me. Every customer has a story, and banking has to begin by understanding where that person wants to go.

That could be a a young customer starting their savings or investment journey, including in the digital asset class,or someone preparing for retirement. The needs are very different, but the principle is the same: we have to be there at the right point in time, with the right solution.

Accessibility is also critical. In my previous role, a lot of the work was about disrupting banks.  But since joining Absa, I see the opportunity differently now. It is about unlocking the assets that banks already have and using them to create more relevant products and services. It is also about partnerships, working with fintechs and other players to give customers better solutions and build more trust in the ecosystem.

Banks bring important strengths. We understand areas such as anti-money laundering, cybersecurity, regulation and risk management. Those capabilities are essential to protect the financial ecosystem. 

But banks also need to become more open. 

At M-Pesa, we opened APIs and created an ecosystem with more than 170,000 developers. That meant thousands of people were building relevant products and services for their own customers on top of the platform. That kind of openness is important.

As a financial institution, we are present across the whole digital ecosystem, from corporates to SMEs to individual customers. The challenge is how we connect all of that together and allow others to leverage the ecosystem as well.

Digital will be central to this. With the progress being made in generative AI and agentic AI, the way banks and financial institutions operate will change significantly. That creates major opportunities to serve customers better, make services more accessible, and design financial solutions around people’s real needs rather than around products alone.

Trust is often described as the real currency in financial services. From your experience, what does it take to make millions of people trust a digital financial platform with their money?

The first thing is to make sure that the customer’s money is safe.

People must know that when they leave their money on a platform, it will still be there when they come back, whether that is the next day, the next month, or even a year later. They need to know that the system is secure and that fraud will not take place.

That trust comes from several things. It comes from the systems and processes behind the platform. It comes from the brand promise you demonstrate give to your customers. It also comes from customer education. People need to understand how to protect themselves, for example, how to keep their PIN safe and how to avoid exposing their account to risk.

But trust is not built by one institution alone. It has to be built across the financial ecosystem. Banks should not compete when it comes to fraud prevention, anti-money laundering, cybersecurity or the protection of customers. These are areas where financial institutions need to work together.

Banks also need to work closely with regulators, fintechs and telecom operators. The objective is to make sure that the whole financial system is secure.

Once customers trust the system, they become more comfortable using it for payments, savings, lending, remittances and other financial services. That is how trust moves from a basic sense of safety to a deeper relationship with the financial platform.

AfCFTA has raised Africa’s trade ambitions, but SMEs still need faster payments, better access to credit and greater trust between markets. What role should banks, mobile-money operators and fintechs play in making intra-African trade easier for SMEs and businesses?

It is an interesting question because, with the trade agreements that have been signed, governments have done their part. The policy framework is there. The next part has to come from businesses and from the financial ecosystem.

Customer-to-customer payments across Africa already exist. Today, you can send money to Nigeria or to other African markets more easily than before. But when it comes to business-to-business payments, or even customer-to-business payments, it can still be easier to send money outside Africa than within the continent.

Those barriers need to be addressed. The continent needs stronger payment rails, better switches and more connectivity between markets. We are beginning to see some of those developments, including more regional payment infrastructure in East Africa and other parts of the continent.

There is also work to be done around how businesses and SMEs are identified across borders. Many small businesses do not always have the full KYC documentation that traditional financial institutions require. But technology can help. If an individual can send money instantly from Mauritius to someone in Nairobi, we should be able to make business payments move with the same level of simplicity and speed.

Of course, business transactions are usually larger than individual transactions, so issues such as KYC, compliance, anti-money laundering controls and fraud prevention become even more important. But the direction is clear.

We expect continued progress in this area over the next 12 to 24 months, including from our side. The opportunity is to make intra-African payments easier, safer and more efficient for businesses, especially SMEs.

As you take up your role at Absa, what belief about customers and markets will guide the way you think about the future of personal and private banking in Africa?

I do not think about it in isolation. When you look at a pan-African banking model, it is a two-sided ecosystem. On one side, there is the individual customer. On the other side, there are businesses, large corporates, SMEs and micro-enterprises. These two sides are interrelated.

You will see us playing across that ecosystem, across our business units, and creating a flywheel between customers and businesses. The way we look at digital will also fundamentally shift how we serve customers across different touchpoints.

Partnerships will be important. The question is how we partner more effectively, and how we leverage Absa’s strengths across the continent.

In Kenya, there may be opportunities to build on strengths in digital lending. In South Africa, there are strong capabilities in areas such as credit, asset finance and vehicle finance. The opportunity is to use those pan-African strengths and accelerate them across markets.

The playbook will become clearer over the next few months as we set our focus areas and roll it out.

Looking ten years ahead, how do you see Africa’s digital payment infrastructure evolving?

I think agentic AI has the potential to change many aspects of financial services.

In the same way that APIs changed the way institutions connect with each other and opened the door to a lot of innovation, agentic AI will accelerate that shift significantly. It will bring much greater hyper-personalisation into financial services.

Today, if I want to book a restaurant in Mauritius, I do not necessarily need a travel guide. I can go to ChatGPT, find a restaurant, make a reservation and, potentially, make the payment through the same experience. That shows how quickly the customer journey is changing.

Agentic AI will also change the way banks and financial institutions build and deliver products. It allows institutions to modularise products and services, and to connect newer systems with legacy systems without necessarily having to replace everything at once. In the past, this often required very large technology transformation programmes. AI can help make that process faster and more flexible.

As a result, we will see much faster iteration of products and services across financial services. In Africa, this is especially important because the continent has a young population, rising digital adoption, and expanding 4G and 5G connectivity. Those factors create the conditions for agentic AI to play a major role in how digital payments and financial services evolve over the next decade.

As digital payments and AI reshape financial services, what challenges do you expect Africa to face over the next ten years?

I think those developments will also bring challenges.

Cybersecurity will become even more important. KYC, identity and the protection of customers will be critical issues. As technology makes it easier to enter financial services, we will also see new forms of competition and lower barriers to entry.

Data sovereignty will also be an important issue, and it could slow some developments. Countries will want to know where data is held, how it is protected and who has access to it.

At the same time, new players could come into Africa and scale very quickly. Global Digital Banks and Fintechs could enter African markets and build a significant presence. That will not only create more competition, but also more specialisation.

No single institution will be able to do everything. Partnerships will become more important. The institution that stays closest to the customer through the right channels will be best placed to lead, because data will be central to creating more relevant financial experiences.

That also means customer protection will be essential. Institutions will have to be relentless in protecting customers, securing their data and making sure that new technology is used to solve real-life problems.

Any final thoughts on Africa’s place in the next phase of global growth and digital finance?

For me, one thing is clear: if any global company wants to remain relevant over the next 20 years, it needs to be in Africa now.

The continent has the population, the resources, the young talent and the digital momentum. It is a very exciting time for Africa. I believe the next generation of major global companies will include many African companies, and the next generation of wealth creators will also come from this continent.

We are already seeing major investments, such as what Nigerian billionaire, industrialist and entrepreneur, Aliko Dangote has done with refining capacity, changing the way Africa participates in industrial value chains. We are also seeing governments say that Africa cannot continue only exporting raw materials. With electric vehicles, minerals, infrastructure and manufacturing, there will be major opportunities.

Africa can also leapfrog. We do not always have to go through the same legacy systems or traditional development paths. Digital technology changes that. A child in rural Tanzania can now have access to the same information as a wealthy child in the United States. That is what makes this moment so powerful.

Of course, Africa has challenges. It is not one single market. It is 54 countries, each with its own realities and difficulties. But it is exciting to be here, and it is exciting to see the possibilities ahead.