For many years, banking transformation in Africa was discussed mainly through the lens of financial inclusion: how to bring more people into the formal financial system, how to reduce cash dependency, and how to extend services beyond urban branches. That conversation is still relevant – but it is no longer sufficient.
African banking is entering a new phase. The market is no longer shaped only by traditional banks, branch networks, and account-based products. It is increasingly shaped by mobile money operators, fintechs, agent networks, telcos, instant payment systems, digital wallets, cross-border payment platforms, embedded finance providers, alternative lenders, merchants, and regulatory digital public infrastructure. In other words, banking in Africa is becoming an ecosystem game. This shift has major implications for core banking technology. A core system can no longer operate as a closed back-office ledger that processes accounts, balances, and end-of-day transactions. In an ecosystem-driven market, the core must become a real-time, API-first, scalable platform that enables banks to connect, partner, launch, reconcile, monitor, and adapt at speed. The strategic question for African banks is no longer simply: “Is our core system old?” The more important question is: “Is our core ready for ecosystem banking?”
African banks are no longer competing only with other banks. They are competing with wallets, fintechs, telcos, agents and every digital experience that has changed customer expectations.
Africa’s banking market is growing – but competition is changing
The African banking sector has become one of the most dynamic financial markets globally. According to McKinsey, African banks delivered an average return on equity of 19% in 2024 and 17% in 2025, well above the global banking average of around 10%. The same analysis indicates that African banking revenues reached approximately $99 billion in 2024 and an estimated $107 billion in 2025. This performance confirms the strength of the market. But it also hides an important structural challenge. Growth is increasingly coming from digital adoption, new payment behaviours, SME demand, financial inclusion, non-interest income, and partnerships – not only from traditional lending and deposit-taking. McKinsey also points out that African banks still face persistent challenges around access, infrastructure, trust, macroeconomic volatility, and operational efficiency. African banks’ cost-to-asset ratio remained around double the global average in 2024, which suggests that technology modernization and operating model transformation still have significant room to create value. This is where core banking becomes strategic. In a high-growth but increasingly complex market, banks that cannot launch products quickly, integrate partners efficiently, process transactions in real time, or use data intelligently will struggle to convert market potential into durable growth.
In Africa, the next wave of banking growth will not be won by institutions with the largest branch networks, but by those with the most connected, scalable and ecosystem-ready infrastructure.
Mobile money has changed the benchmark for banking
One of the most important forces reshaping African financial services is mobile money. Globally, mobile money reached 2.3 billion registered accounts in 2025, with more than $2 trillion flowing through mobile money wallets during the year. GSMA notes that it took the industry around 20 years to pass $1 trillion in annual transaction value – and only four more years to double that figure. Sub-Saharan Africa remains the world’s most active mobile money region. GSMA reported that most new registered and active mobile money accounts in 2025 came from Sub-Saharan Africa. In 2024, the region was also described as the world’s leading mobile money region, driven by growth in East and West Africa. The World Bank’s Global Findex 2025 data further confirms the scale of the shift. Sub-Saharan Africa has the highest level of mobile money account ownership globally, with 40% of adults having a mobile money account in 2024. This matters because mobile money has reset customer expectations. Users expect instant transfers, simple onboarding, low-cost transactions, high availability, intuitive interfaces, and services available outside traditional banking hours. They are increasingly comfortable accessing financial services through wallets, agents, USSD, apps, merchants, and partner platforms. For banks, the competitive benchmark is no longer only another bank. It is the speed of a wallet, the reach of an agent network, the usability of a fintech app, and the interoperability of modern payment rails. A bank with a legacy core may still hold the customer’s account. But if the customer’s daily financial life happens elsewhere, the bank risks becoming infrastructure in the background rather than the center of the relationship.
The core is no longer just a ledger
Historically, the core banking system was primarily viewed as the system of record: the place where accounts, balances, interest, fees, postings, and customer data were maintained. That role remains critical. But in ecosystem banking, it is not enough. A modern core must also act as a system of integration, orchestration, and product innovation.
The core banking system is no longer just the ledger of the bank. It is becoming the operating platform for partnerships, payments, products and growth.
It must be able to connect with mobile money schemes, national switches, card processors, payment gateways, AML and KYC systems, credit scoring engines, agency banking platforms, digital onboarding tools, regulatory reporting systems, customer channels, and third-party fintech services. It must support real-time transaction processing, not only batch-based posting. It must expose secure APIs, not only rely on file transfers or custom point-to-point integrations. It must allow banks to configure and launch new products quickly, not wait months for vendor-level customization. It must provide clean, usable data for risk, analytics, personalization, compliance, and operational monitoring. In practical terms, ecosystem banking requires the core to support several capabilities at once:
Real-time account and balance management
API-first integration with external platforms
Event-driven transaction processing
Flexible product configuration
Multi-channel and partner-based distribution
Scalable transaction volumes
Strong reconciliation and auditability
Embedded AML, KYC, fraud, and compliance workflows
High availability and operational resilience
Support for cloud, hybrid, or multi-cloud deployment models
Without these capabilities, ecosystem participation becomes expensive, slow, and risky.
Instant payments are becoming part of the financial infrastructure layer
Another major shift is the development of instant payment systems across Africa. AfricaNenda’s 2025 SIIPS report highlights the growing role of instant payment systems in advancing digital payments, inclusion, and digital public infrastructure across the continent. The report includes case studies such as Egypt’s Instant Payment Network, Ethiopia’s EthSwitch, Mozambique’s SIMO, and Nigeria’s NIBSS Instant Payment system. This is not just a payments story. It is an infrastructure story. Instant payments create new expectations for settlement speed, transaction visibility, availability, interoperability, dispute handling, and reconciliation. They also create new opportunities for banks to build services around salary payments, merchant collections, SME payments, remittances, government disbursements, and low-value high-volume transactions. But banks can only capture this opportunity if their core infrastructure can keep up. If the core operates in batches, relies on manual reconciliation, struggles with 24/7 availability, or requires complex custom work for every new payment integration, the bank becomes constrained by its own technology.
Real-time payments require real-time banking infrastructure. Batch-based systems were not designed for a world of instant transfers, 24/7 channels and always-on customer expectations.
In a real-time payments environment, legacy architecture becomes more than an IT problem. It becomes a business model limitation.
Ecosystem banking creates new product opportunities
The ecosystem model is not only about connecting systems. It is about creating new revenue streams. African banks are operating in markets where demand for financial services is broad and diverse. SMEs need working capital, invoice finance, collections, and business accounts. Consumers need savings, microloans, remittances, salary-linked products, insurance, and low-cost payments. Merchants need acquiring, cash management, instant settlement, and embedded credit. Governments need digital disbursement and collection mechanisms. Diaspora communities need cross-border transfer and account services. McKinsey projects that lending will remain the largest African banking revenue pool and could grow to almost $52 billion by 2030, while SME lending is expected to grow rapidly as specialized SME lending products expand. This is a major opportunity. But it requires product agility. A bank that needs six to nine months to launch a new SME lending product will move too slowly. A bank that cannot price, configure, test, and deploy new digital savings or credit products quickly will lose ground to fintechs and mobile-first competitors. A bank that cannot integrate alternative data sources into onboarding, scoring, or risk monitoring will miss opportunities to serve thin-file customers. Modern core banking platforms should therefore act as product factories. They should allow banks to define products, rules, limits, fees, interest logic, repayment structures, customer segments, workflows, and integrations with far greater speed and flexibility. In African banking, speed to market is not a luxury. It is becoming a competitive requirement.
Legacy core systems make ecosystem participation expensive
Many banks already understand the need to participate in ecosystems. The challenge is that legacy core systems make this participation difficult. The typical symptoms are familiar:
New integrations require heavy custom development.
Product changes depend on vendor queues or core-level code modifications.
Reconciliation between wallets, channels, cards, and accounts is manual or semi-manual.
Data is fragmented across systems and difficult to use in real time.
Batch processing creates delays in customer visibility and operational control.
Scaling transaction volumes requires costly infrastructure expansion
Digital channels depend on middleware workarounds
Compliance reporting involves manual extraction and spreadsheet-based processes.
Downtime risk makes modernization politically and operationally difficult.
These constraints directly affect growth. They slow down partnerships. They delay product launches. They increase cost-to-serve. They weaken customer experience. They complicate compliance. They reduce the bank’s ability to compete in high-volume, low-margin digital finance. In an ecosystem economy, the cost of legacy is not only maintenance. It is opportunity loss. This is exactly the challenge BOS was built to address — a core banking platform designed for African and MENA markets, combining real-time processing, API-first architecture and modular deployment, so banks can modernize progressively rather than replace everything at once
The African market requires architecture built for coexistence
Core modernization in Africa cannot be approached as a simple replacement project. Banks operate in complex environments with regulatory dependencies, existing customer bases, active channels, legacy products, regional payment networks, and operational continuity requirements. This is why modernization must often be progressive. A modern core strategy should allow coexistence between old and new systems. Banks should be able to launch new digital products on modern infrastructure, migrate selected customer segments, integrate with existing channels, and gradually reduce dependency on legacy components without interrupting the business. This approach is especially relevant for African markets, where banking transformation often needs to balance innovation with stability, compliance, cost discipline, and operational resilience. Progressive modernization allows banks to move faster while reducing risk. It enables new products and ecosystems to be built around modern architecture, while critical legacy functions are migrated in controlled phases. For many banks, the best path is not “big bang replacement”. It is building a modern core foundation that can coexist, integrate, scale, and gradually take over more of the bank’s operating model.
Core modernization should not force banks to choose between innovation and stability. The right architecture allows them to transform progressively while continuing to operate.
What an ecosystem-ready core should deliver
For African banks, an ecosystem-ready core banking platform should deliver more than standard account processing. It should support the bank’s ability to operate as a digital financial platform. At a minimum, this requires six architectural principles. First, it must be real-time. Customers, partners, regulators, and internal teams need accurate transaction and balance information when events happen — not only after batch updates. Second, it must be API-first. Ecosystem banking depends on fast, secure, governed integration with internal and external services. Third, it must be configurable. Banks should be able to launch and adjust products quickly without deep code-level dependency. Fourth, it must be scalable. Digital finance in Africa can involve large numbers of low-value, high-frequency transactions. The economics only work if the platform can scale efficiently. Fifth, it must be resilient. As financial services become embedded in everyday life, downtime becomes a direct business and reputational risk. Sixth, it must be data-ready. Modern banking depends on clean, accessible, and actionable data for compliance, personalization, credit decisioning, fraud detection, and management insight. These principles are not abstract technology preferences. They determine whether a bank can participate effectively in the next phase of African financial services.
An ecosystem-ready core is not defined by one feature. It is defined by the bank’s ability to connect, launch, scale and adapt without rebuilding its operating model every time the market changes.
Ecosystem banking will separate platform banks from product banks
The next generation of African banking leaders will not necessarily be the institutions with the largest branch networks or the longest history. They will be the banks that can operate as platforms. A product bank sells accounts, loans, cards, and payments through its own channels. A platform bank does more. It distributes products through partners. It embeds finance into external journeys. It connects to payment ecosystems. It uses data to personalize services. It launches fast, scales efficiently, and collaborates without losing control of risk and compliance. This is where the core banking system becomes a strategic asset. If the core is closed, rigid, batch-based, and difficult to integrate, the bank is forced to operate like a traditional product institution. If the core is open, real-time, modular, and API-first, the bank can participate in the ecosystem on its own terms. The difference is not only technological. It is strategic.
The ecosystem is already here
African banking is not waiting for the future. The ecosystem is already here. Mobile money has reached mass scale. Instant payment systems are becoming part of national and regional financial infrastructure. Fintechs are targeting profitable niches. SMEs are demanding better digital financial tools. Regulators are pushing inclusion, interoperability, resilience, and transparency. Customers are comparing banks not only with other banks, but with every digital financial experience they use. For African banks, this creates a clear choice.
They can continue to build digital services around legacy infrastructure, accepting complexity, delay, and rising operating costs. Or they can modernize the core and turn it into the foundation for ecosystem banking. The winners will be the banks that understand a simple truth: in Africa’s next phase of financial services, the core is no longer just the system that records the business. It is the platform that enables the business to grow. The banks that ask this question early are the ones still asking it on their own terms. Let’s talk about what a ready core looks like for you – talk to our team.
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Sources:
- McKinsey & Company — “From Potential to Performance: A Snapshot of African Banking” (March 2026)
https://www.mckinsey.com/industries/financial-services/our-insights/from-potential-to-performance-a-snapshot-of-african-banking - GSMA — “State of the Industry Report on Mobile Money 2026” (24.03.2026)
https://www.gsma.com/sotir/ - World Bank Global Findex 2025
https://www.worldbank.org/en/publication/globalfindex - AfricaNenda Foundation — “State of Inclusive Instant Payment Systems in Africa 2025” (SIIPS 2025, listopad 2025)
https://www.africanenda.org/en/siips