Africa’s fragmented markets and lack of legacy foreign exchange trading infrastructure means that the continent has become a melting pot of fintech activity and innovation.

In South Africa, only five years ago almost 90% of foreign currency trades happened over the telephone. “Today, despite challenges around illiquidity and complicated political and capital control environments, approximately 75% of trades are conducted digitally with a mere 25% conducted on the phone,” says Tim Hutchinson, head of digital for financial markets at Standard Bank.

With 57.6% of the world’s 174 million active registered mobile money accounts in Sub-Saharan Africa, the continent is becoming a world leader in fintech generally—and mobile money, in particular. The foreign exchange flows that Africa’s expanding fintech culture supports are important to the continent’s financial services providers, most of whom are developing fintech capabilities or partnering with the most popular or effective home-grown African fintech’s to ensure that they capture this flow. Standard Bank has been an integral part of driving this rapid evolution to digital in Africa’s foreign exchange trading landscape.

“In order to function as an effective market maker, we need to source liquidity in market. We also need to instantly formulate risk-based pricing in an ever-changing world. Thereafter, we need to distribute price,” Hutchinson says. In Africa, this requires developing solutions that allows retail, corporate, and institutional customers to access foreign exchange markets across multiple jurisdictions.

At the same time, in most markets, “we also need to show central banks what we are doing,” Hutchinson adds. All transactions need to be transparent and electronically traceable so that local authorities are prepared to approve digital trades.

Today, however, banks are not only expected to provide the systems and networks to facilitate basic transactions but are, “also required to provide insight and guidance beyond pure execution by offering additional value-based services across research, hedging and, most importantly, settlement capability,” Hutchinson says. Currency research for example, is increasingly a big client requirement. Having on-the-ground experience and local expertise as well as the ability to deliver this digitally, “differentiates Standard Bank’s distribution capabilities in this regard,” he adds.

In addition, banks are also increasingly required to inform and guide clients through the broader economic, legal and political landscapes in which transactions occur. For example, one of the considerations in developing Standard Bank’s digital capability was how to combine market intelligence and research with real-time pricing, trade execution and post-trade services.

Today, it is not enough just to execute trades. “It is equally important that we advise and inform the broader universe in which trades happen,” Hutchinson says.

From a technology point of view, Regulatory Technology (regtech), for example, is assisting Africa to manage new regulatory developments in heavily currency-controlled environments. Similarly, the rise in robotic process automation (RPA) and artificial intelligence (AI), “has allowed Standard Bank to develop solutions that leapfrog traditional business problems,” explains Hutchinson.

Digital trading in Africa is also evolving in its own often very different way. “We have found that it is not just a question of importing developed world systems. Our approach with clients is to work with them to help understand their internal needs in terms of governance and operational efficiency,” Hutchinson says . “We then partner with clients to develop and implement digital solutions that talk to the heart of their business need.”

Standard Bank’s Business Online (BOL) platform, for example, allows clients to view balances across the continent while making third party currency payments and also supporting general cash management. This kind of broad, business-wide digital cash view and capability puts control back in the hands of the clients while also allowing clients, rather than the bank, to manage their own cash flow.

From an institutional perspective, it’s important to be able to offer customizable solutions to clients managing money on behalf of their investors. Standard Bank’s investment in Application Programming Interface (API) technology, for example, is tracking exactly its client’s growing ability to build these capabilities into their own systems. Additionally, Standard Bank’s SHYFT app—a digital wallet allowing global transactions in USD, EUROS, GBP, and Australian dollars—has extended this control element to the retail side.

While Africa’s record in digital adaptation and innovation is impressive, the technology part is often the easier part to implement. “The human and cultural systems, and client behavior changes, required to give this digital evolution life—like getting customer analogue systems to start pricing electronically to make trades visible 24/7—is often a lot harder to achieve than the technology upgrade,” Hutchinson says. In short, bank employees, customers and regulators all need to undergo fundamental cultural shifts in how they do things and understand the world.