Vast opportunities for digital finance and payments in the Cloud. Africa has been the poster child for innovation and improvisation by using technology to transform financial services. M-Pesa, a mobile phone-based money transfer, financing and microfinancing service was first launched in Kenya 2007 then Tanzania in 2008.

Many of the founding team at RedCloud Technologies were behind the design and development of M-Pesa and over the last five years, RedCloud has been building what is the world’s first intelligent distributed banking platform to bring digital finance to a much wider audience.

On a global level, an estimated two out of nine billion people remain unbanked and 90 percent of all small financial transactions are still made in cash versus online or digitally. Small businesses need to send efficient low-value payments across different payment networks, on-demand, in real time, at a fraction of the cost of traditional rails. In particular, the engines of growth, the micro enterprises, need to have the capacity to transfer cash securely and require loans or basic financial services. Yet, they remain underserved by the current financial system.

Opportunities for digital finance and banking in Africa

There is an enormous lost revenue opportunity in terms of cash management across nearly every country in the world. Cash displacement and not replacement is becoming a top priority for much of the banking system. In Nigeria alone, for example, it is estimated that only 2% of 180 million people pay any tax and the regulators are proactively support banking and new digitised financial services. With the right technologies and distributed banking infrastructure, banks can find a way to meet this need.

Distributed Banking Technology through the cloud can help reach new customers

Intelligent banking means smart distribution. The assets already exist in terms of vast retail and distribution networks. Large companies like P&G and Coca-Cola have strong distribution networks, agents and infrastructure. Intelligent banking technology can work closely with these existing retail and distribution networks to reach new customers. The opportunity for banks is to leverage these existing distribution networks to help customers build digital cash through secure cash in and out. RedCloud is working with a number of major banks in other countries, alongside some of the world’s biggest distributors to realise this opportunity.

Banking and digital disruption

Many ‘fintech’ start-ups are trying to move into the banking space. To succeed, they will need to provide workable, adaptable solutions or platform. The risk for fintech companies more broadly is that by simply adding layers to the core banking systems, they are not really attacking the entire banking infrastructure. Given the extraordinarily high core banking platform costs, banks can find it difficult to adapt to new technology.

At RedCloud, we enable banks to step up to reach vast areas of untapped markets, to help entrepreneurs and businesses to better manage their finances, to better serve their customers and to make a profit. This is the challenge and the opportunity today.

We at RedCloud look forward to being a part of this banking revolution.

By Justin Floyd. The author is CEO of RedCloud which builds technology for banks in emerging economies – particularly in Africa, South America and Asia – to help countries replace the vast amount of cash transactions with easy to use digital transactions.