During the Africa Financial Summit 2024, held recently in Casablanca, a panel of experts addressed the theme of integrated finance. The embedded finance industry, which aims to integrate services such as payments, credit, savings, investments and insurance into non-financial platforms, is growing dramatically. Estimated to triple by 2029 to reach nearly $40 billion, this transformation offers unprecedented opportunities to expand access to financial services, particularly for underbanked populations. However, this revolution faces major challenges: fragmented regulatory frameworks, uneven digital infrastructure and complex integration processes. To enlighten us on this subject, Ms. Leila SERHAN, Senior Vice-President and Head of North Africa, Levant and Pakistan at Visa, agreed to answer our questions.
La Nouvelle Tribune: What is your vision for the development of integrated finance, particularly in North Africa and Morocco, in the years to come? How is Visa positioning itself as a key player in this transformation?
Mrs. Leila Serhan: Visa considers integrated finance as a transformation lever to promote financial inclusion and stimulate economic growth in North Africa and Morocco. By integrating financial services with non-financial platforms, such as e-commerce and telecommunications, we aim to make financial tools more accessible to unbanked and underbanked populations.
Our vision of the development of integrated finance is based on three key elements:
Promoting financial education, improving access to financial services and promoting innovation and digital inclusion.
Promoting financial education is fundamental to enabling individuals and businesses to acquire the knowledge and skills necessary to effectively manage their financial resources. We are engaged in initiatives such as financial education programs in partnership with organizations like Trace Academia in Ivory Coast and the Moroccan Foundation for Financial Education (FMEF) in Morocco.
Improving access to financial services is also a key priority. We work with government departments, regulators, payment institutions (EDPs) and payment facilitators (Payfacs) to design payment solutions tailored to the specific needs of SMEs and traditional businesses. These efforts ensure that financial services are accessible to a wider portion of the population.
Encouraging innovation and digital inclusion is at the heart of our strategy. Through partnerships with non-financial institutions, Visa promotes the adoption of digital payments, enabling a cashless economy and strengthening digital inclusion. By leveraging our global experience and local partnerships, we aim to create a secure, efficient and easy-to-use financial ecosystem.
By combining financial education efforts, localized innovations and strategic partnerships, Visa is positioning itself as a key player in integrated finance, ensuring that financial inclusion supports economic development in Morocco and throughout the region.
In your opinion, what are the main technological challenges related to the integration of financial products into non-financial platforms such as e-commerce or telecommunications?
Integrating financial products into non-financial platforms presents several technological challenges. The protection of personal data is paramount, especially in today’s digital economy, where data security and privacy are crucial.
Additionally, bridging the gap between financial and non-financial systems often requires seamless connectivity and compatibility. Providing a seamless and seamless experience for customers accessing financial services on non-financial platforms is key to driving adoption and retention.
To overcome these challenges, robust APIs, secure data encryption, and scalable infrastructure are required. Visa, as a global leader in payment solutions, has successfully addressed similar challenges globally.
In Morocco, Visa collaborated with several partners, including e-commerce platforms and telecommunications operators, to implement solutions adapted to local needs. These partnerships demonstrate our commitment to sharing our expertise, deploying advanced technologies and supporting mutual success.
By leveraging our global experience and local partnerships, Visa is well positioned to help non-financial platforms address these challenges, ensuring that financial product integration is secure, efficient and easy to use. We remain open to collaborating with more platforms to drive innovation and expand financial inclusion across the region.
How can regulators and businesses work together to overcome the challenges of fragmented regulatory frameworks?
Collaboration between regulators and businesses is essential to address challenges and drive economic development
At Visa, we actively engage with governments and regulators through regular consultations, fostering a collaborative approach to openly discuss emerging challenges, regulatory updates and industry trends. This proactive approach ensures that regulations remain effective and relevant in an ever-changing digital payments landscape.
We work closely with central banks and regulators to address critical issues such as fraud prevention and risk management, ensuring that digital payment solutions are both innovative and secure. These partnerships allow us to align on key priorities while maintaining a focus on consumer protection.
To bridge the gap between regulators and industry players, Visa organizes dedicated forums and roundtables. For example, during the Visa Fintech Day In Casablanca this year, we organized a regulatory panel that brought together key players in the Moroccan fintech ecosystem, including regulators, businesses and startups. These forums facilitate open dialogue, allowing all stakeholders to discuss the regulatory landscape and identify opportunities for improvement.
As digital payments continue to evolve, regulations must adapt to new business models and new technological innovations while protecting consumers. One way to do this is to create « sandboxes »these controlled environments allow businesses and startups to test innovative digital payment solutions and financial services under the supervision of regulators, thereby encouraging innovation without compromising security.
Visa is committed to collaborating with regulators, encouraging innovation and ensuring that the digital payments ecosystem evolves for the benefit of all stakeholders.
How can integrated finance concretely improve the financial inclusion of underbanked populations?
Integrated finance and integrated payment solutions play a key role in improving the financial inclusion of unbanked populations, particularly in regions with low banking penetration rates such as North Africa. By integrating digital payment systems directly into non-financial platforms or services, such as e-commerce platforms, mobile applications or telecommunications services, these solutions enable businesses to offer payment and lending options seamlessly within everyday platforms. This eliminates the need for a traditional bank account, making financial services more accessible to underserved populations.
Embedded finance simplifies the transaction process, allowing users to transact without having to go through external payment systems. This frictionless approach reduces barriers for underbanked individuals and facilitates access to financial services such as payments and microcredit. Additionally, it helps reduce reliance on cash transactions, which are often inefficient and less secure, while encouraging the adoption of digital payment methods that drive economic growth and inclusion.
By integrating financial solutions into platforms people already use, embedded finance fills critical affordability gaps, enabling individuals and businesses to fully participate in the digital economy. At Visa, we remain predisposed to partnering with local businesses, governments and non-financial platforms to implement these innovative solutions and drive greater financial inclusion in Morocco, Africa and beyond.
How to convince non-financial companies to adopt integrated financing solutions?
Non-financial businesses can be encouraged to adopt integrated finance solutions by highlighting the significant value these services bring to their operations and their customers. Integrating financial services allows businesses to create new revenue streams and improve the customer experience, strengthening long-term loyalty and engagement. In emerging markets like Morocco, such integration can also drive financial and digital inclusion, allowing businesses to effectively cater to underserved segments.
Adopting integrated finance solutions offers many tangible benefits to non-financial businesses. Among these, we find the reduction of operational costs, access to real-time data for better decision-making, and a competitive advantage in their sectors of activity. By seamlessly integrating financial services into their platforms, businesses can simplify transactions, improve customer satisfaction and position themselves as innovative market leaders.
Additionally, the integration of these solutions opens new opportunities in emerging markets, where digital transformation is redefining business dynamics. At Visa, we work closely with businesses to demonstrate the transformative impact of integrated finance, helping them leverage cutting-edge technologies to enrich their offerings, build customer loyalty and achieve sustainable growth.
Interview conducted by Selim Benabdelkhalek
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