The explosion of pioneering FinTech innovations from around the world is disrupting and transforming the global financial landscape. From payment, investment and lending innovations, to mobile money, digital wallets and Blockchain technology, FinTechs make financial services more relevant, accessible, affordable and easy to use by society. In emerging markets, FinTechs are destined to flourish and adoption is expected to skyrocket over the coming years. Welcomed or not, FinTech innovations are disrupting the South African financial landscape and accelerating the digital conversion of financial services.
Pioneering FinTechs like Mexem are breaking down trading and stock market entry barriers. Mexem empowers everyday South Africans to trade and invest intelligently with first-in-class and user-friendly trading platforms, superior trading algorithms, expert knowledge sharing and online security, customised portfolio reports and analytics, always-on customer service, attractive terms and access to 120 exchanges across the globe. The group’s vision of financial empowerment is driven by Israeli-born Mexem CEO, Itai Liptz, a zealous advocate of global knowledge sharing.
Israel’s drivers of innovation
The Global Innovation Index (GII) recognises innovation as a key driver of economic growth and prosperity and the world’s top 10 innovation heavyweights, according to Bloomberg’s 2017 Innovation Index, are South Korea, Sweden, Singapore, Germany, Switzerland, Japan, Finland, Denmark, France and Israel.
The 2017 Global Competitiveness Report ranks Israel the 3rd most innovative economy and given the geographic location and economic size, Israel’s innovation rankings have sparked great interest in the drivers behind this rising economy. New ideas are fuelled by existing knowledge bases and effective knowledge sharing across industries. This entails effective collaboration between diverse technologies, skillsets, research and development. The GII recognises the importance of collaboration to innovation and in 2017 ranked Israel 2nd in this area.
The success of Israel’s innovation ecosystem is driven by a flexible economy, young population, high demand and adoption rate of FinTech solutions. What’s more, it is pushed forward by access to capital and a highly skilled workforce, extensive R&D capabilities and regulations conducive to FinTech growth. Israel’s compulsory military service also instils a culture of discipline and transfers advanced technical and risk management skills invaluable in the business and trading space.
The urgency of financial understanding
The lack of trading knowledge and low savings rate in South Africa poses a major socio-economic barrier to the prosperity and financial stability of the nation. Despite rising living costs and the current economic environment, poor financial planning is mainly fuelled by a lack of financial education, particularly regarding trading on the stock exchange.
The financial services sector should first dispel the myth that saving and investing is reserved for the elite. FinTechs can play a key role in easily disseminated financial education, whether that be through knowledge sharing or practical initiatives such as the Johannesburg Stock Exchange (JSE) Investment Challenge.
FinTech disruptors like Mexem are causing a stir in the industry. The extensive knowledge and mobility they bring will leapfrog businesses and consumers into an inclusive and mutually beneficial global financial marketplace. Regulation is essential in this rapidly evolving space and the South African Reserve Bank is dedicated to the monitoring of FinTech developments. Instead of prohibiting cutting-edge and customer-friendly solutions from entering the market, legislation should strike a fine balance between promoting competition and protecting customer interests.