New technologies driving digital innovation in transacting and banking are coinciding with a renewed political focus on increasing intra-Africa trade. The coincidence of these trends presents a unique opportunity for Africa’s young, digitally-inclined entrepreneurs to achieve meaningful economic participation, writes the team at Standard Bank Group.


As African governments and legislators implement the African Continental Free Trade Area, aimed at realising a single market and the free movements of goods, investment and capital in a customs union including 1.2 billion people with a combined US$2.5tn GDP, “intra-Africa trade has the headroom to double and still be much lower than some of the other intra-regional trade”, says Vinod Madhavan, Head of Trade for Standard Bank Group. In this environment, just as, historically, a bank account represented access to economic citizenship, today, “having a simple device providing digital access to modern transaction platforms provides a passport to global connectivity – and vast human development potential”, he adds.

As millennials enter the work force, banking systems will need to replicate the digital mediums that they are comfortable operating. This is especially so amongst the millions of young Africans, “the vast majority of whom will over the coming decades access the economic opportunity delivered by greater intra-African trade via small and medium enterprises”, says Sachin Shah, Product Lead, Transactional Products and Services at Standard Bank.

For Africans, “digital innovation offers the potential to leap-frog many of the continent’s distance, development and physical infrastructure barriers, enabling – almost instantly – access to a digitally integrated global economy of untold opportunity”, says Shah.

Yet despite the huge potential presented by the confluence of a greater cross-border trade and investment in an age of digital innovation, “for young Africans to successfully leverage this rapidly evolving opportunity ecosystem they will still need to understand the business of business, no matter how digitally able they may be”, says Madhavan.

Banks able to harness the potential of digital to link Africa’s young entrepreneurs and emerging SMEs to the continent’s burgeoning trade opportunity, “hold the key to unlocking Africa’s youth dividend”, says Shah.

To this end, Standard Bank has piloted a business incubator for youth-managed SMEs in Uganda. Called ‘The Stanbic Bank Business Incubator’, the programme helps aspirant and existing millennial SME operators and owners build an understanding of how to achieve their growth ambitions through the provision of: business development services, training and follow-up support, networking events, focus group discussions, access to subject matter experts, mentoring and coaching of entrepreneurs after formal training, as well as help in accessing markets and sourcing of funds.

The Stanbic Bank Business Incubator is specifically purposed to equip SMEs with the necessary skills, knowledge and understanding to run their businesses in a sustainable and profitable manner through meaningful participation in Uganda’s rapidly growing oil and gas sector. Over the two years since inception, Stanbic Bank has awarded graduation certificates to over 500 entrepreneurs. “The learnings from the project will be rolled out to similar SME and youth development programs amongst Standard Bank’s 19 other African markets,” says Madhavan.

Another important initiative supporting the growth of African trade is Standard Bank’s recent launch of its Africa China Agent Proposition (ACAP), assisting African importers source and validate quality goods, safely and efficiently, from the most competitive suppliers in China. The ACAP has seen Standard Bank Group, the largest African bank by assets, leverage its partnership with the Industrial and Commercial Bank of China (ICBC), the largest bank in the world, to digitally connect African importers with a dedicated trade agent in China. The ACAP offering is expected to revolutionise African importers’ view of China’s supplier universe. It will also ease the cash flow of African importers by providing access to financing while empowering importers with real time digital sight and control of the entire importing and logistics process.

The ACAP offering – underpinned by a letter of credit – will also deepen trust in Africa-China trade relationships, guaranteeing African importers access to the best suppliers in China, the best payment terms and the best quality,” says Madhavan. If any of the terms of the letter of credit are not met, payment will not be made. As such, the offering will place African importers in a much stronger negotiating position when it comes to the price, quality and efficiency of importing Chinese goods. At the same time, “Chinese suppliers can be confident that once the terms of the letter of credit have been met, payment will be made in full and on time – guaranteed by Standard Bank Group and ICBC”, he adds.

More generally, as Africa’s burgeoning and digitally literate youth populations enter the job market, organisations will change even more broadly. Millennial treasurers, for example, require treasury services to operate in real time and total transparency, providing full disclosure and insight 24/7. But treasury is not something separate from the rest of banking. Today, “the business clients of banks’ clients want a mobile first, permanently accessible and seamlessly visible banking platform that provides access to a whole universe of capability beyond just banking”, says Shah.

This more digitally modulated view of banking will, in turn, drive banks to adopt greater agility and much broader capability – by enabling partnerships with global platforms services and cloud operators, for example. It will also require banks to dedicate many more resources to better understand client challenges and needs in the new digital economy. Working with millennial SMEs in Africa to understand their pain points will, for example, help banks integrate appropriate banking services with their mobile operating platforms. Similarly, working with ICBC and deploying technology, Standard Bank has been able to combine bespoke initiatives like its Trade Club and its ACAP offering with global initiatives like Trade Information Network (TIN) to deliver an entirely new trade ecosystem.

The result is that the culture of the bank is becoming more agile, less siloed and more client focused as the, “design thinking and broader philosophical view of what it means to be a digital service ecosystem permeates what were once very traditional and rigidly structured physical and analogue organisations”, says Madhavan.

Banks simply cannot keep working the way they have done in the past as smartphones, the internet and social media drive new expectations about how to consume information, communicate, shop and transact.

“Looking forward, banks are more likely to be understood as ecosystems of partnerships, providing people access to a universe of financial capabilities; delivered at the appropriate stage in the client journey that each corporate undertakes, and fulfilled in a digitised manner,” says Madhavan.

Finally, while banks around the world are making changes to accommodate digital, the implications for sustainability and long-term resilience and relevance are even more profound.

The data gained from operating and digitally connecting new data systems, for example, allow banks to become more agile and innovative. Over time they will also allow banks to become cheaper to use, by incrementally reducing the costs of physical infrastructure, “future-proofing Standard Bank’s evolving connectivity ecosystem by allowing it to offer untold future services while deriving income from as-yet-unrealised revenue streams”, predicts Madhavan.

Combing the trust and deep relationships that banks have built up historically with the data and connectivity afforded by digital transformation means that for the first time in history, “banks are truly able to democratise information, providing individuals unfettered access to combinations of data, connections, insights and opportunities limited only by their imaginations”, says Shah.

From a client perspective, the kind of ecosystems of knowledge, access and, ultimately, connectivity that banks will come to provide will radically transform the share of life that almost all individuals will be able to access and benefit from – especially amongst Africa’s young, digitally literate and previously economically excluded population.

This is the new digital transaction capability proposition that, in combination with a concerted political commitment to increased intra-African trade, “holds such promise for the inclusion of Africa’s youth in sustainable meaningful economic participation”, says Madhavan.


About Standard Bank Group

Standard Bank Group is the largest African bank by assets with a unique footprint across 20 African countries. Headquartered in Johannesburg, South Africa, we are listed on the Johannesburg Stock Exchange, with share code SBK, and the Namibian Stock Exchange, share code SNB.

Standard Bank has a 156-year history in South Africa and started building a franchise outside southern Africa in the early 1990s.

Our strategic position, which enables us to connect Africa to other select emerging markets as well as pools of capital in developed markets, and our balanced portfolio of businesses, provide significant opportunities for growth.

The group has over 53,000 employees, approximately 1,200 branches and over 9,000 ATMs on the African continent, which enable it to deliver a complete range of services across personal and business banking, corporate and investment banking and wealth management.

Headline earnings for 2018 were R27.9bn (about US$2.1bn) and total assets were R2.1tn (about US$148bn). Standard Bank’s market capitalisation at 31 December 2018 was R289bn (US$20bn).

The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20,1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade and deal flow between Africa, China and select emerging markets.