With the rising wave of fintech in Africa, traditional banking as we know it may be in for a challenge. This is because the revolutionary growth of tech-enabled innovations, such as Sparkle, is opening up new vistas for banking and financial services on the continent. The kernel of this tech revolution is the seamless provision of financial services to the underserved markets in Africa while enabling more affordable and personalized services for customers. It is no wonder, therefore, that fintech this year has raised over $1.7+ billion in investments, with a bulk of these investments readied to deepen vertical market penetration and greater imprints in the emerging banking space.
Sparkle raises $3.1 million from investors
Sparkle, a fintech committed to enhancing personalized banking experiences, recently announced a seed round of over $3.1 million to scale its operations. The startup identifies opportunities in open banking to transform legacy banking in vast dimensions and enable opportunities for cross-industry growth and development. With the goal of ensuring that financial inclusion gaps are closed and reduced to the barest minimum, neobanking has taken on the challenge of providing services to those cut off from traditional banking avenues. The increased possibilities that these offer for banking in Africa is gradually getting to the fore, especially as fintechs dominate the startup ecosystem in the continent.
Uzoma Dozie, Chief Sparkler, and former CEO and Group Managing Director of Diamond Bank, now merged as Access Bank, has reiterated his commitment to building global networks through the Sparkle brand,
Earlier in April, the company had launched Sparkle Business that was to serve small and medium businesses with their financial needs. Requiring little or no documentation for opening an account, assistance in tax remittance and inventory management, and easy access through mobile technology, this new arm of the startup enjoyed easy adoption by the market.
Traditional banking in Nigeria: Challenges
Generally, bank customers in Nigeria are disgruntled by the cumbersome account management fees that they suffer under the hands of traditional banks. They are keen on alternatives and easily run to mobile payment technologies for easier, more seamless, and affordable ways to bank without losing some of their funds to bank charges. However, unlike Kenya, where mobile payment systems are independent of the banks, such alternatives are still largely dependent on traditional banking infrastructure. Still, the dynamism of the fintech space is one to offer a veritable challenge to traditional banking in Nigeria, in much the same way as it is revolutionizing banking globally.
As these services transition to online platforms, it is important that the traditional model and infrastructure of banking, especially in Nigeria has to metamorphose as well, to match the prevailing circumstances. Reduced charges, seamless online transactions, increased customer satisfaction, have become the order of the day in banking relationships, through the power of technology. Banks must be ready to tow this line, especially as the emerging banking space is being inundated with fast-growing and highly innovative fintechs. Sparkle is one of such drivers of this new normal.
Fueling growth going forward
With the benefit of these investments raised, Sparkle intends to utilize the investment in driving its robotic process automation and hiring talent across engineering, finance, risk, and marketing departments. Early this year, the startup had claimed to have over 20,000 customers, and have processed over $16 million in transactions since its inception. With partnerships with Network International, as well, early this year, and other strategic moves, the company is keen on growing a new digital ecosystem for transforming the nature of payments, savings and analytics in Nigeria and across Africa.