Several factors are contributing to Africa's development as a promising market for challenger banks. The first is the fact that African countries have been able to attract foreign direct investment (FDI) in recent years. Meanwhile, incumbents are feeling the threat of challenger banks as they struggle with legacy systems, higher costs and as regulatory pressures encourage them to exit non-core markets. The fact that in 2014 66% of sub-Saharan Africans did not have a bank account suggests a market with huge potential for growth.
Several factors are contributing to Africa's development as a promising market for challenger banks. Technological innovation, agility and product differentiation are setting up challenger banks to tap into a new, growing market of technology-friendly young Africans. Meanwhile, incumbents are feeling the threat of challenger banks as they struggle with legacy systems, higher costs and as regulatory pressures encourage them to exit non-core markets. The fact that in 2014 66% of sub-Saharan Africans did not have a bank account suggests a market with huge potential for growth.