Navigating an economy in transition as an SA-based fintech
From minerals to numerals – leading fintech Elenjical Solutions’ Bereket Demeke reflects on the opportunities for South Africa’s new service economy to provide financial consultancy to a domestic and international customer base.
“From a global perspective, SA is new to the scene when it comes to tech, consultancy and finance,” explains Bereket Demeke, Executive at Elenjical Solutions (Elenjical), the fastest-growing fintech in the country. Experts in Capital Markets and Risk Technology and with major international banks among its customers, Elenjical is a beacon proving SA’s physical distance isn’t a barrier to breaking onto the global stage of financial technology consulting. If anything, recent transformations in the country’s economy have opened up a variety of opportunities.
A rocky start
South Africa’s rich resource base and the pre-eminence of mining had long skewed the country’s legislation and bureaucracy. But with growth in other industries such as tourism, the country is becoming more tertiary focused. “Our economy developed due to the export of raw materials, so legislation didn’t facilitate ease of business in newer industries such as consulting and finance,” explains Demeke. As well as regulations passed well before SA’s new breed of tech firms were in existence, the highly qualified workforce required for this industry was in short supply – “The education system wasn’t designed to produce sufficient software engineers, which hiked up competition for the few available considerably.” Yet the tides are changing and there is a definite shift to a more flexible economy that embraces and encourages newer industries.
Transitioning to a knowledge and service economy
“Several of the world’s top-ranking universities are based here in SA, and they are now producing strongly qualified tech, consulting and engineering graduates for us to tap into,” explains Bereket. Johannesburg is a hub for these institutions, with a range of undergraduate and postgraduate courses in data engineering and data science, among others, which will equip students with the skillset required to undertake roles at a fintech like those in demand at Elenjical.
To further embrace the talent available in SA, Elenjical has various sponsoring and training programmes that it offers to promising students, including those from disadvantaged backgrounds, helping nurture students throughout both high-school and college. “By enabling talented young individuals to grasp the opportunity to discover our line of work, we’ve recruited some brilliant minds who might not otherwise have pursued a career in this field,” says Demeke. These efforts also build awareness about the transition to a knowledge-based industry and increase recognition of the types of jobs that come with it.
Geographically distant but culturally close
Alongside this growing talent pool, Demeke insists that being based in SA also brings a range of attractive monetary and cultural benefits.
“Not only is SA the strongest and most vibrant economy in Africa, it’s also increasingly westernised, which promotes a cultural fit with the markets we are trying to integrate with,” Demeke explains. Not only is it English-speaking, but it is also in central EU time zone, which helps communication during the work day and serves as an inherent advantage of SA when it comes to servicing clients from the Middle East or Europe.
Another benefit to the growing industry in SA is the substantially lower cost of living compared to its European counterparts. “Our country’s relatively weak currency is an opportunity to compete on price while providing a very high skillset and quality,” highlights Demeke. “SA has a niche and strong tech skillset and the country’s internationally renowned universities increasingly attract bright young minds from the whole continent.” When qualified, these same young professionals can help export fintech consulting services into the rest of Africa, where the domestic provision is less embedded.
Elenjical’s rapid growth and international reach is a testament to the nation’s growing confidence in the technology sector. Systemic obstacles and VISA processes no longer inhibit new industries from thriving, and Demeke predicts that businesses in SA will continue to be increasingly becoming outward-looking. This in turn will prompt legislative and bureaucratic changes tailored to suit the new economic dynamic.