Afrofuturist ambiguities: Inclusion and consolidation in South African digital finance

Abstract

In recent years, two changes have begun to transform the South African banking sector. First, financial technology startups have emerged, offering payments and other services via bespoke mobile apps, powered by a combination of official access to bank application programming interfaces and unofficial screen scraping. Second, banks have expanded their mobile offerings through applications that connect to third-party messaging services from companies such as Facebook and Tencent. Proponents of these products emphasize their potential to facilitate financial access and to position South Africa at the forefront of digital innovation on the African continent. This article argues that this progressive Afrofuturist imaginary is belied by the political economy of “app-based banking,” which facilitates a two-way tension between inclusion and consolidation. While digital finance has increased the competitiveness of the financial sector, it has also incentivized a commercial focus on more affluent consumers. Meanwhile, efforts to widen access through partnerships with social media companies have consolidated the market power of both monopoly banks and digital platforms, and facilitated the extraction of data from South Africa to the Global North. These dynamics of stratification, consolidation and extraction limit the developmental impact of digital finance, and render it potentially exclusionary.

This article is a part of special theme on Commodifying Compassion in the Digital Age. To see a full list of all articles in this special theme, please click here: https://journals.sagepub.com/page/bds/collections/commodifying_compassion

In the summer of 2018, a prominent South African bank launched a new way for its customers to make financial transactions: “chat-banking.” Instead of visiting branches or using the bank's own website, customers were invited to contact the bank on the WhatsApp messaging service, where a chatbot could access account details and authorize payments. The product launched at a critical time for the firm, which operates in ten sub-Saharan African countries from a Johannesburg base. Earlier that spring, the U.K.-based Barclays, which owned the majority of the bank's shares, had begun selling its stake to African investors. ¹ At the launch of the “chat-banking” product, executives were eager to link the new technology to the firm's corporate reinvention. “Our aspiration is to be an entrepreneurial, digitally led African banking group,” said the CEO. “We are passionate about innovation and we are immensely proud to offer this innovative platform that will forever change the way our customers do banking. That's what we call Africanicity,” echoed the advertiser who managed the launch (FCB Africa Press, 2018).

“Chat-banking” is one of a series of experiments in mobile app-based banking undertaken by South African financial institutions over the last decade. These include technology startups offering financial services via standalone smartphone applications, and partnerships between existing banks and digital platforms to integrate social media into the provision of financial services. While some of the resulting products resemble forms of mobile finance found in other markets, others—like “chat-banking”—were introduced initially or exclusively in Africa. Indeed, for the executives quoted above, these products represented a particularly African form of technological future: a promise to “forever change” how customers bank while positioning “digitally led African” firms as industry leaders.

As scholars including Hansen and Souleles (2023) have noted, imaginaries of the future play an important role in motivating and shaping the implementation of new financial technologies. This article interrogates the imaginary of the future that surrounds app-based banking in South Africa—which centers the contribution these technologies could make to African futures—as an Afrofuturist imaginary. In this article, we ask first, “How do South African policymakers and financial professionals imagine the potential of mobile app-based banking?” We interrogate the imagined potential, as articulated by finance professionals, for “app-based banking” to facilitate financial inclusion and African economic development. This imaginary positions emerging mobile finance as a form of “Tech for Good,” contributing to the financial well-being of disadvantaged populations or the economic advancement of African nations—in this case, South Africa. More specifically, this imaginary positions mobile finance technology as realizing its potential for social inclusion by making the financial sector more economically inclusive of new firms.

Second, we ask, “How do institutional constraints shape the ability of these technologies to realize this imagined potential?” In practice, we find that while digital finance has increased the openness of the financial sector, it has also incentivized a commercial focus on more affluent consumers and consolidated the position of monopoly banks. Meanwhile, efforts to widen access through partnerships with social media companies have facilitated the extraction of data from South Africa to the Global North. These dynamics of stratification, consolidation and extraction limit FinTech's developmental impact in South Africa. The two-way tension between this imaginary of inclusion and empowerment and practices of consolidation and exploitation is facilitated by “participatory ambiguity” (Girard, 2022) on the part of financial professionals about the future they are bringing into being.

The article proceeds as follows. The first two sections set out literatures—on imaginaries of the technological future and on the political economy of platforms—which inform our approach. The third section introduces the South Africa case study, outlining the app-based products introduced in the past decade and the regulatory changes that enabled these products to arise. The fourth section sets out our methodological approach to analyzing these transformations. The fifth section presents the Afrofuturist imaginary collectively espoused by financial professionals and policymakers implementing the new app-based technologies. The sixth and seventh sections analyze the way that the platform political economy of the South African financial sector constrains the possibility of realizing this imaginary in practice. The eighth section considers the implications of this analysis for our understanding of mobile financial technologies and their developmental potential, while the ninth section concludes.

Financial expectations and the Afrofuturist imaginary

In the sociology of finance, imaginaries of the future play an important role. Financial markets necessarily involve calculations of prediction and expectation, where profitability may depend on the fit between models and real market outcomes (Beckert, 2016; Hansen and Souleles, 2023; Svetlova, 2022). As Hansen and Souleles have argued, “expectations are means by which we reach out into the future to tame its uncertainty” (2023: 424). Digital technology plays an important role in financial imaginaries of the future, as firms rely increasingly on “big data” and data science rather than more field-specific economic indicators to model markets and guide investment decisions (Hansen and Souleles, 2023).

Financial imaginaries are a particular form of social imaginary. Social imaginaries of technology, including financial technology, are collective assumptions about the hopes and promises of technology and its impact on social life (Henriksen, 2024: 31). While related to the construct of imaginaries as visions of social order in political science and social theory (Anderson, 2016; Taylor, 2004), they accord a key role to technology in bringing an imagined future social order into being. These imaginaries, defined by Jasanoff and Kim (2015) as “sociotechnical imaginaries,” are “collectively held, institutionally stabilized, and publicly performed visions of desirable futures, animated by shared understandings of forms of social life and social order attainable through, and supportive of, advances in science and technology” (Jasanoff and Kim, 2015: 4). When adopted by the institutions of power responsible for developing new technologies, imaginaries shape technological pathways through the effort to realize the imagined future (Jasanoff and Kim, 2015: 22–23).

Where “imagined communities” in social and political theory are associated with nation-states (Anderson, 2016), the literature on social imaginaries of technology increasingly emphasizes the role for corporations and professional bodies in articulating and propagating visions of the future (Hockenhull and Cohn, 2021; Kværnø-Jones, 2022; Smith, 2015). These institutions have power to “elevate some imagined futures above others, according them a dominant position for policy purposes” (Jasanoff and Kim, 2015: 4). In this way, a vision of the future originated by an individual or a small group becomes a collective institutional goal.

In the financial sector, firm strategies that rely on the transformative potential of “Big Data” and data science to realize a desired financial future (Hansen and Souleles, 2023) are an example of sociotechnical imaginaries at a corporate level. Moreover, firms can spread their social vision beyond their own clients and customers through advertising and the media. Corporate reports, advertising and media, and the individual statements of professional leaders all constitute sources of evidence for identifying a sociotechnical imaginary in action (Smith, 2015). This article investigates the imaginary propagated by professionals in the South African financial sector as a particular type of imaginary of the technological future emerging at an industry, rather than firm, level.

In an African context, social imaginaries of the technological future have an additional significance. They play a central role in “Afrofuturism,” a cultural movement that emerged in the African diaspora in the 20th century and continues to shape artistic expression both on the continent and in the diaspora today. Afrofuturist narratives draw on African historical experiences (including slavery and colonialism), indigenous mythology and folklore, and the pan-Africanist political ideals that animated 20th century anticolonial revolutions. Afrofuturism brings these elements together into science fictional stories that imagine alternative realities of Black liberation and empowerment (Strait and Conwill, 2023).

Central to Afrofuturism is the exploration of technology. From advancements in biotechnology and artificial intelligence to alternative energy sources and space exploration, Afrofuturist storytelling envisions worlds where technological innovation serves as a tool for African liberation and self-determination. Through its speculative lens, Afrofuturism offers a platform to envision and shape a more inclusive pan-African future, built on the transformative potential of emerging technologies (Winchester, 2019). While Afrofuturism shares with sociotechnical imaginaries a view of technology's ability to deliver desirable futures, the imagined future in Afrofuturist narratives is postcolonial African liberation from domination by the West. Afrofuturists imagine links between technological innovation and emancipation from the historically specific political and economic subordination of the colonial experience and its aftermath. This vision of postcolonial empowerment makes Afrofuturism distinct from (and counter to) Western forms of techno-futurism.

While “Afrofuturism” originates as a genre label for fictional storytelling, these stories draw on and inform real world African aspirations for empowerment through technology. Afrofuturist stories counter “derogatory notions of Africa as poor, diseased, backwards, uncivilized and war-torn” by presenting “a recognizable, future Africa” that is “technologically advanced and powerful” (Hodapp, 2022: 616). As Jenna Hanchey has argued, the Africa presented in these stories is highly developed, but according to an “alternative form of development that resists, rather than acquiesces to, Western modernity” (Hanchey, 2023a: 576). In Afrofuturist fiction, Africans use technology to determine the path development should take and to implement that path free of (and often against) Western intervention. Moreover, Hanchey argues, the aspiration for “developmental rebellion” that animates such fiction also animates real efforts by African development practitioners and communities to wrest control over economic development on the continent away from Western aid donors and bureaucrats (Hanchey, 2023b).

We follow Hanchey in adapting Afrofuturism to analyze the way the future of financial technology is imagined as a pathway to African economic development. This Afrofuturist imaginary positions mobile financial technologies that collect and monetize data as advancing African empowerment. It therefore presents a “desirable future” that runs counter to the extractive use of data to further new forms of economic domination or colonialism (Couldry and Mejias, 2019; Kwet, 2019). This is a form of developmental rebellion. When this “desirable future” is collectively aspired to by the actors implementing app-based finance in South Africa, it becomes an Afrofuturist type within the broader category of sociotechnical imaginaries.

Platform power and participatory ambiguity

To analyze how institutional constraints of the South African financial market shape the ability of these technologies to realize their imagined Afrofuturist potential, we draw on recent scholarship about the political economy of digital platforms. Platform economies have a “Janus-faced,” structure, which results in the operation of multiple overlapping dualities that structure platform markets (Atal, 2021). On the one hand, platform proprietors promote their technologies as democratizing tools which flatten hierarchies, expand access to resources and lower barriers to participation. On the other hand, the data extraction and commodification inherent in “surveillance capitalism” (Zuboff, 2019) steadily drive platform markets toward monopolization and the consolidation of platform power.

This duality is reflected in the narratives surrounding the implications of digital finance for development. Both states and nongovernmental organizations use digital identification systems, dependent on the collection of biometric data, to facilitate the delivery of social services, verifying that recipients are eligible for the aid they claim. This includes the delivery of cash transfers, which connects legal identification with financial data in the form of mobile money or bank accounts. For proponents of these programs, datafication thus becomes “a means to fighting corruption, ensuring smooth and efficient governance and ensuring economic development” (Issaka, 2023). The proliferation of digital finance itself has been celebrated for helping individuals transition from the informal to the formal market (Ambrosius and Cuecuecha, 2016; de Koker and Jentzsch, 2013; Munyegera and Mastumoto, 2016) bridging gender gaps in access to finance (Adegbite and Machethe, 2020), and stimulating economic growth (Gosavi, 2018). Both the World Economic Forum and the World Bank consider “financial inclusion through technology” an important conduit of sustainable development (Beduschi, 2019; Weitzberg et al., 2021). This narrative imagines private financial firms and the data they both collect and produce as essential for development (Wang, 2022).

The optimistic imaginary of financial inclusion sits in tension, however, with prominent critical frameworks for explaining digital business as “surveillance capitalism” (Zuboff, 2019), “informational capitalism” (Fuchs, 2010), “digital colonialism” (Kwet, 2019; Langley and Leyshon, 2022) or “platform capitalism” (Srnicek, 2016). Collectively, these frameworks portray a model of political economy in which data functions as a form of capital to be extracted from individuals and collateralized or commodified by firms. In this model, the accumulation of data—like the accumulation of capital—is a self-perpetuating goal, rather than a conduit to economic growth or sustainable development (Sadowski, 2019). In this darker imaginary, datafication, including in digital finance, extracts capital from the global poor to the benefit of financial firms (Natile, 2020). Thus, FinTech reinforces the pathologies and limits of finance more generally (Bernards, 2022).

The tension between these narratives reflects what Weitzberg et al. (2021) in a commentary for this journal, have called “the dialectical relationship between surveillance and recognition.” This relationship turns on the ambivalent power relations between data subjects and those who process and sell data. On the one hand, surveillance by firms and governments can enable oppression and exploitation. On the other hand, as digital identification is built in to essential services, being surveilled becomes “a valued token of recognized membership” (Ferguson, 2015: 85–86) or a measure of social citizenship (Breckenridge, 2014; Wang, 2022). While Weitzberg et al. (2021) position this relationship as a dialectic, Atal (2021) has shown that the dialectic is explicitly weighted to one side. The consolidation of power in digital platforms is concealed in impressions of market openness and social egalitarianism. In the context of digital finance for development, this concealment takes the form of “participatory ambiguity,” or processes by which development actors “construct multiple cognitive frames around a central idea” without defining that idea (Girard, 2022). In South Africa, participatory ambiguity facilitates a two-way tension between the Afrofuturist imaginary of inclusion and empowerment and practices of consolidation and exploitation. This in turn shapes the ability of app-based finance to fulfill its imagined Afrofuturist potential.

South Africa: Partially banked and partially online

This article explores the evolution of this tension in the practical and normative uses of data in app-based FinTech in South Africa. This choice of case study is significant. Scholarship on the political economy of FinTech applications has focused on developed economies where both smartphone usage and banking access is near-universal (Dahlman et al., 2021; Larsson et al., 2023). By contrast, scholarship on mobile finance in the Global South has focused on SMS-based payments systems that do not rely on banking infrastructure, highlighting their positive effects for financial inclusion (Makina, 2019; Maurer, 2019; Realini and Mehta, 2015). South Africa sits between these poles. On paper, access to both formal banking and smartphones is higher than in most of the Global South. In practice, however, most South Africans operate in a cash economy with inconsistent access to mobile data. The introduction of FinTech applications to this system can either solve or exacerbate this market stratification, which is typical of middle-income countries. Our study thus contributes to understanding the impact of FinTech on financial inclusion in middle-income emerging markets.

Here, we set out the case context. Until the recent liberalization, finance in South Africa had remained both highly concentrated and highly analog. Though there are 18 commercial banks, the largest four account for 83% of deposits (Financial Sector Conduct Authority, 2022). These “Big Four” charge high fees—four times as high as those in many developed world markets (O’Neill, 2018). While 81% of South African citizens have access to a traditional bank account (National Treasury, 2023), only 30% of banking customers use their accounts more than three times a month (Finmark Trust, 2018). These customers tend to be financially sophisticated urban professionals, who are more likely to have multiple accounts, and to use their accounts not only for cash withdrawals and card payments, but equally for credit, insurance or investment products.

By contrast, 70% of South African banking customers use their accounts just once or twice a month: to withdraw salary in bulk, make a monthly remittance payment to family, or withdraw social grants, a monthly cash transfer from the government that 47% of South Africans receive (Finmark Trust, 2018, South African Social Security Agency, 2023). Fifty-two percent of consumer transactions are in cash (Intergovernmental FinTech Working Group, 2022), in part because merchants in informal businesses or in more rural areas do not accept card payments (BizCommunity, 2017). With only 36% of adults employed in the formal sector, informal means of paying and receiving salary and transferring it to family members or landlords play a significant role. Indeed, discussion of “financial inclusion” in a South African context has historically focused on using technology to facilitate cash transfers (Finmark Trust, 2018).

In South Africa, the formal and informal financial sectors are interlinked. For example, given the reliance on cash in rural areas, many low-income South Africans working in urban areas use supermarkets to make remittance payments to their home villages, paying cash at the till in one location and allowing recipients to collect cash from the till at another (BizCommunity, 2010). While such services are not legally banking, in practice, the supermarkets who offer these services partner with a bank. The most popular such system, Shoprite Money, was first backed by Standard Bank and is now backed by Grindrod Bank (Bizcommunity, 2022; PaymentsAfrika, 2018). In addition, some recipients of government social grants use supermarkets (rather than banks) to access their monthly transfers while proprietors of some informal businesses will accept customer payments through supermarkets, but not bank card transactions (Torkelson, 2020). In other words, many of South Africa's “banked” customers are “underbanked,” with 63% relying on the informal financial system for credit and other services that these customers are not receiving from their banks (Finmark Trust, 2018). Meanwhile, some South Africans recorded as “unbanked” are reliant on services, like supermarket money transfers, that run on bank data.

Access to mobile technology is similarly multitiered. While over 90% of South African adults have a smartphone, the highest penetration in the sub-Saharan African region (Gilbert, 2020), just over 13% of households have a home broadband connection. Most South Africans rely instead on mobile data to access the internet, and 60% of households have a mobile data package, which may be shared among family members (see Figure 1). Many smartphone users are reliant on accessing the internet at WiFi hotspots, or use their devices without their full data-dependent features. This technological access is itself unequally distributed, with mobile data penetration higher among urban residents, who tend to be more affluent, and mobile signal coverage stronger in urban areas (ItWeb, 2023). Only 21% of South Africans use mobile data to access their banking accounts (Intergovernmental FinTech Working Group, 2022).

Figure 1.

Access to internet in South Africa, as reported in 2022 Census. (Statistics South Africa, 2023).

The inequalities of financial and mobile access intersect, in South Africa, with a third crucial axis of inequality: race. Low-income South Africans, who are more likely to be both underbanked and with partial access to mobile technology, are disproportionately Black or otherwise Historically Disadvantaged South Africans (HDSAs). Since the end of apartheid, businesses, including foreign businesses operating in South Africa, have been required to adopt affirmative action policies to alleviate racial discrimination in their services and operations (Atal, 2017). These policies have been subject to frequent criticism that they enable firms to profit from the impression of inclusion and equity without its substantive practice (Bateman, 2019). In such a context, where a relatively high proportion of consumers have access to some level of banking, but not all can afford access to mobile data, the digital transformation of finance poses particular inclusion challenges.

The process of digital transformation began in 2017, when the South African government lifted previously onerous restrictions on new companies who wished to operate as banks. The following year, the government introduced a “Sandbox” granting FinTech companies a temporary amnesty from some regulations to incentivize innovation. The Sandbox for FinTech allows for live testing, under South African Reserve Bank supervision, of new financial products and services from companies not licensed as banks. These products that have proliferated in the Sandbox range from simple mobile payment applications to complex programs offering budget analysis, microloans or the ability to issue business invoices. We focus on two types of “app-based” financial products that emerged during this period of liberalization: mobile finance applications operated by non-banks but reliant on bank data, and “chat-banking” offered by established banks in partnership with social media platforms.

Methodology

This article draws together concepts from literature on social and sociotechnical imaginaries, platform studies and development studies to analyze app-based finance in South Africa. Our contribution is conceptual, introducing the “Afrofuturist imaginary” as a unique type of social imaginary and applying it to analyze how promises of openness and inclusion in South African FinTech conceal greater consolidation of power for elite consumers, monopoly banks and social media platforms. To advance this analysis, we draw on a combination of publicly available and original data covering the period from September 2019 through the end of 2022. This was a key period in the digital transformation of South African banking, just after the regulatory liberalization of the financial sector and during the launch and implementation of new financial products. We analyze the imagined potential of these new technologies to facilitate financial inclusion and African economic development, and the degree to which institutional constraints shape the possibility of fulfilling these imaginaries.

To understand how South African financial professionals and policymakers imagined the potential of these new technologies, as well as the institutional constraints shaping their implementation, we draw on two sources. First, we conducted ten field interviews at four traditional banks and one financial startup between September 2019 and March 2020, the period during which these new technologies were first coming to market. As Hansen and Souleles (2023) have shown, interviews are an effective method for teasing out “the ways ‘expectations might behave,’” or be altered by events. To select interviewees, we contacted firms which had publicly announced product trials or launched app-based products in the space created by the new regulatory liberalization at the time of our fieldwork. Individuals selected at each firm were engineers and product developers in charge of designing the new services at a technical level, as well as managers responsible for commercial strategy. This selection included informants in more technical roles as well as more commercial roles, and informants in both more mid-ranking and more senior positions within their respective organizations, as represented in Figure 2. During interviews, we probed informants’ expectations of the new app-based banking technologies’ potential social impact.

Figure 2.

Data sources for empirical analysis.

Second, we sought evidence of how finance professionals imagined the potential of these technologies in their public statements. Beginning during our fieldwork, and continuing through the end of 2022, we gathered press releases, public executive remarks and company reports from the five firms where our interviewees were based, as well as industry reports and regulator reports from the same period. We conducted a discourse analysis of both our interview responses and these diverse types of public statements (over 50 documents—see Figure 2) in order to identify expectations that recurred: similar expectations expressed in similar language by multiple organizations, by individuals at more than one firm, or in reports from both industry and government. As Jasanoff and Kim (2015) note, expectations become sociotechnical imaginaries where they are collectively held and institutionally performed. Organizational documents, like corporate reports or reports from state agencies, are established sources for such collectively held beliefs in the literature on sociotechnical imaginaries (Smith, 2015). We therefore identified these repeated expressions as evidence of a collectively held belief shaping the institutional implementation of the new FinTech technologies across the industry, to which both firms and regulators contribute.

Our analysis identifies three beliefs that informants collectively held about the potential of the new financial technologies: that these technologies would foster market openness and competitiveness, that they would facilitate financial inclusion for the underbanked, and that they would promote African (particularly South African) economic empowerment. These three beliefs were intersecting and mutually reinforcing, constituting one Afrofuturist imaginary that cut across informants’ accounts of the two app-based solutions (standalone FinTech applications and “chat-banking” social integration). We identify the three beliefs directly in interview statements by our informants and in public documents produced by both financial firms and regulators during our study period. We also identify in these statements and documents evidence that the beliefs intersect: claims that market openness facilitates financial inclusion, for example. We apply our own prior knowledge and field expertise as scholars of South African political economy and the political economy of digital platforms—and in one of our cases, as a South African policy practitioner—to interpret these three intersecting beliefs. We introduce the conceptualization of “the Afrofuturist imaginary” as a unique type of sociotechnical imaginary that holds these beliefs together. In this way, our approach is broadly abductive (Conaty, 2021).

In addition to analyzing the beliefs our informants and their organizations expressed about the potential of the new technologies, we identified in our interviews and documents descriptive claims of how the technologies were being used in practice, including statements about take-up of the new technologies, descriptions of the types of customers using them and accounts of how data was shared between banks, standalone FinTech firms and social media platforms. By triangulating these data with the expressions of imagined potential, we evaluate the implementation of “app-based” financial products, as described by industry professionals, against the imagined potential for inclusion and empowerment as expressed by those same professionals. This approach does not constitute a macroeconomic assessment of FinTech's material impact. Rather, by triangulating these data sources, we highlight the “participatory ambiguity” that finance professionals themselves maintain about the developmental purpose of the new technologies. We use publicly available data about the structure of the South African financial sector to explain that ambiguity, demonstrating how institutional constraints shape the possibility of realizing the Afrofuturist imaginary. Figure 3 models this dynamic, which the following three sections analyze in detail.

Figure 3.

The Afrofuturist imaginary in theory and practice.

“Africanicity” and the imaginary of financial empowerment

In their interview statements and public documents, South African financial professionals in firms and regulatory agencies expressed the intersecting beliefs that the new mobile finance technologies would foster market competition, financial inclusion for the underbanked and the economic empowerment of South Africa. This section analyzes those intersecting beliefs and their role in shaping the design and rollout of the new technologies.

As South African consumers report that the high fees charged by the Big Four banks are a significant reason for using their accounts sparingly, regulators hoped that making it easier for new banks to incorporate would lower fees, and thereby widen access. As the Financial Sector Conduct Authority put it in a report on its digital banking strategy, “Automated services, the lack of physical branches and less employees means that digital banks have considerably fewer costs than traditional banks. These savings can be passed down to customers as reduced charges.” (Mothibi and Rahulani, 2021: 16). Significantly, the new banks incorporated under the post-2017 regime achieved lower fees by launching without branch infrastructure, using a digital customer service platform to lower staff costs.

These products are designed to integrate a customer's data from multiple accounts at different banks through mobile applications, but the data practices used to do so vary widely. Some of these products require formal agreements with sponsor banks, or access to a bank's application programming interface (API). Others rely on screen-scraping, in which a customer is directed from the independent application to a bank login screen on a mobile browser, from which login and other details can be recorded. Together, these practices herald a shift towards “banking as a platform,” in which FinTech startups layer their services on top of the core banking infrastructure (Goga, 2020: 11) (Figure 4).

Figure 4.

South African FinTech ecosystem (Rand Merchant Bank, 2019).

The emergence of “banking as a platform” has spurred traditional banks to expand their own mobile applications, and in particular, their use of messaging services. Three of the four major banks use machine learning to train a chatbot to converse with customers, identify the issue they need help with, and either facilitate transactions directly or pass the customer to an appropriate live representative. While these bots are common in many countries, three South African banks—Standard Bank, African Bank and ABSA—allow customers to chat to the bots not merely inside the bank's own mobile application, but inside third party messaging services like WhatsApp and Facebook Messenger (both owned by Meta) and WeChat (owned by Tencent). Such “chat-banking” is distinct from mobile payments applications, like Kenya's M-PESA, that use text messages to move money directly between cash accounts linked to mobile phone numbers. It is also distinct from FinTech applications which connect via API to bank data. “Chat-banking” customers are able to add the bank as a “contact” in their existing social chat application and after a single authentication, converse with the chatbot over the third-party messaging service about their banking needs, including authorizing transactions (Figure 5).

Figure 5.

Screenshot of sample transaction, Absa chatBanking.

Together, these three changes—new digital-only banks, standalone FinTech service providers, and “chat-banking” via third-party messaging—constitute an “appification” of South African finance. Both regulators and financial services professionals imagine that appification will contribute to expanding financial inclusion for the “underbanked.” Regulators positioned the opening of the banking sector to new firms as a route to financial inclusion for the “underbanked.” The promise of the Sandbox lay in the competition between the startups and the banks on service delivery. Regulators described their ideal new services as those which “For business-to-consumer (B2C) companies … mean lower prices, increased competition, improved access/financial inclusion and so forth [and] for business-to-business (B2B) companies…bring lower costs, increased efficiency, improved compliance and so forth” (Intergovernmental FinTech Working Group, 2022: 5). This imagined link between market openness and financial inclusion forms part of the triad that makes up the Afrofuturist imaginary, as shown in Figure 3.

Financial services representatives similarly promoted the potential of digital and mobile finance as tools of financial inclusion, and in particular as tools to help the “underbanked” integrate more fully into the financial system. One interviewee, for example, imagined a customer using microloans from a FinTech application to help a small business build credit that will allow them to secure a larger bank loan. “Information is powerful. [FinTech microlending app] has a credit component,” the interviewee explained. Once generated in the FinTech application, the customer's data is shared with credit bureaus whose data is in turn accessed by banks to inform lending decisions. “So [the microlending app] is a starting point to create sufficient data to get a good scorecard.” In this way, FinTech startups could help to create credit profiles for those deemed too risky for banks, as has happened in the United States (Aitken, 2017). Other bank managers argued that the proliferation of FinTech applications might make it easier for merchants to accept card payments over mobile phones. In rural areas, where cash is still king, this would increase the odds that underbanked populations would use their bank cards more frequently. To achieve these goals, argued one digital media manager, “maybe financial services companies need to think more of themselves as technology companies.”

Industry professionals also imagine that appification will support the empowerment of South Africa as a financial center, interviewees were at pains to present these technological developments as turning South African banks into innovators. Indeed, “chat-banking” is now being exported across the African continent. ABSA bank launched its WhatsApp service in Kenya in 2021, reaching 200,000 users in its first year. In 2022, the East African bank I&M rolled out a similar service in Tanzania and Rwanda, as did Malawi's MyBucks Banking Group (Ngila, 2022). Like the ABSA program these East African offerings run in partnership with WhatsApp and Meta. South African banks have promoted chat-banking as a “pan-African” service that demonstrates the potential for firms on the continent to sit on the forefront of global innovation by introducing products in Africa not available elsewhere.

As noted in the introduction, at one bank, the launch of a WhatsApp bot capable of authorizing customer transactions was timed to the relaunch of the bank's African divisions, previously owned by a British conglomerate, as a separate company with South African headquarters. As part of the launch, developers were encouraged to push the product to market, although security and other testing was not complete and although no other global bank offered such a service at the time. Both mobile developers interviewed for this study, and company executives who commented publicly at the launch, framed this push as an effort to show distinctly “African” technological prowess: a “digitally led African bank” leading a global industry by offering an “innovative platform” that would “forever change” banking. This imagined African-led technological future, which the advertiser managing the launch described as “Africanicity,” we conceptualize as the Afrofuturist imaginary.

Both regulators and financial services professionals thus imagine that appification will contribute to expanding financial access for the “underbanked” and the empowerment of South Africa as a financial center. These expectations rely on linking the new technologies of appification to more competitive and open financial markets. These three linked expectations—greater financial inclusion, greater competition and African empowerment—together constitute the Afrofuturist imaginary collectively held by those implementing app-based FinTech in South Africa. In the following two sections, we consider how the institutional constraints of South African finance shape the possibilities for fulfilling this imaginary.

Inclusion, competition, and consolidation in “banking as a platform”

The Afrofuturist imaginary presents the introduction of new digital-only banks and non-bank FinTech startups as providing financial empowerment for the “underbanked” through the expansion of the financial market as a result of increased competition. This section analyzes how the institutional constraints of the South African financial sector shape the possibility of realizing this aspect of the imaginary.

Major banks have introduced more low-fee and zero-fee accounts to compete with the terms offered by digital-only banks (BusinessLIVE, 2019). Yet the position of incumbent banks is bolstered by network effects (particularly relating to ATM infrastructure) and inertia, as consumers place a high premium on the reputation of the incumbent banks’ stability, and therefore on the security of their deposits. As a result of consumer “stickiness,” there has historically been very little switching between banks, even where smaller banks offer lower fees or better terms (Makhaya and Nhundu, 2016).

The emergence of FinTech has not made substantial inroads against that “stickiness.” By 2022, five years after the liberalization of South African banking, the four incumbent banks maintained a market share of approximately 85% (Statista, 2023). Instead, many customers use a traditional bank for their primary banking services, but create secondary accounts with digital banks in order to take advantage of their mobile application features offered. The FinTech transformation is thus increasing the numbers of “multibanked” consumers. As noted in the case context, multibanked consumers tend to be affluent urban professionals.

This dynamic is best demonstrated by the traditional banks’ response to the 2012 launch of 22Seven, a budgeting and financial management application that uses customer online banking login details to scrape transaction data from the banks. Initially, the four major banks all responded negatively. ABSA blocked 22Seven's access to its customer data. While Standard Bank, FNB and Capitec allowed access, warnings were sent to customers against sharing online banking details. FNB and Standard Bank further warned that customers who had shared their login details with third-party applications would not be covered by deposit insurance at the bank in the event of fraudulent transactions being undertaken (Arde, 2012). The concerns, at least as communicated publicly, were about the security of customer data and corporate liability in the event of security breach. At the same time, the banks began integrating third-party APIs into their own systems. For example, Investec was one of the first banks to use the American aggregator, Yodlee, while First National Bank offers some of its own financial management analytics via the 22Seven platform. As a manager from Investec described, “It makes sense to do this because our clients are multibanked.” A manager from another bank framed the logic in reverse: partnership with 22Seven gave the bank itself “one view of all accounts.”

This dynamic reflects the emergence of “banking as a platform,” in which FinTech startups layer their services on top of the core banking infrastructure, competing with banks on service delivery to monetize a shared pool of customers. FinTech startups compete with banks by offering multibanked consumers a third-party venue to view data from all their accounts, while banks have fought back by seeking to absorb third-party data, including about how their customers bank elsewhere, in-house. In a platform model, while traditional banks and FinTech firms may compete on services, applications, and for control of customer data, the market share of the traditional banks for deposits, loans and insurance accounts remains undisturbed. This consolidation is typical of platform industries: where platform providers are players in the marketplaces they themselves control, their underlying infrastructural power as market-makers is not subject to competition (Atal, 2021).

Moreover, these oligopolistic tendencies in South Africa's banking sector have limited the possibility for mobile applications to foster financial inclusion. When asked about the implications of FinTech for financial access, as discussed above, managers articulated futures in which mobile finance applications might facilitate credit access or lower the barriers to card payments. Yet a different picture emerged when bank and FinTech managers were asked about competition, and described the type of customers for whose data they competed. Interviewees highlighted the value of being able to collect and analyze customer transactions across multiple bank and non-bank financial accounts in order to offer budgeting and financial literacy features. As one manager put it, “Data is useful. [We can] source a view of the customer from 50 different databases,” using it to inform marketing, to “anticipate what the client wants.” The imagined consumer for such products is someone who has multiple accounts, makes transactions in a traceable way—online or by card—and has an active interest in building wealth.

By going all digital, the new banking entrants similarly serve those who make card transactions, and offer little to the 70% of bank customers who use their bank accounts primarily to withdraw cash. The promise of expanded credit access is similarly belied by market reality: two-thirds of customers who have used a FinTech credit product already have credit from a traditional lender (BusinessTech, 2019).

In practice, the competition between established banks and new entrants reinforces a shift away from the “underbanked” consumer. Faced with the proliferation of no-fee banking offered by the digital banks, several interviewees saw the potential for full-service mobile applications combined with existing mobile finance to obviate the need for branches and reduce staff costs: “Everything should happen on a mobile device, though not necessarily on an app,” said one bank's head of mobile. A mobile developer at another bank, which is already taking steps to close down its branch network, was more explicit:

Why are we doing that? We’re trying to get a lot of duties (covered), to have less effort for human beings to interact with other human beings. We want customers to interact with computers. We used to have customers interact with customer service, but we want to reduce the workload from the customer service perspective. We want to reduce (the staffing of) customer care services. So that is why we have these WhatsApp type services.

These mobile applications thus form part of a broader cost-cutting initiative. Indeed, in 2019, the Big Four banks closed 600 branches, or 28% of the national network (Tarrant, 2019).

The notable exceptions have been those banks which specifically target Lower Living Standards Measure consumers: Capitec and Tyme Bank. The former has expanded its branch network, while the latter is a digital bank that partners with supermarkets, particularly discount retailers, in lieu of a branch network. Indeed, Tyme has attributed its success (as the first digital bank to break even on the African continent) directly to its combination of digital technology with in-store kiosks at major retailers, underscoring the role of physical infrastructure for reaching, or indeed datafying, the underbanked.

Overall, most established banks, digital banks and FinTech startups compete to provide services to the same multibanked, highly secure customers. This competition has increased the inclusiveness of the financial market by opening it to new firms, but it has not increased the inclusion of the underbanked. Instead, the FinTech transformation has supplemented elite customers’ choices: these consumers can be said to benefit from “recognition,” as the competition to monetize their data gives them new ways to access their existing accounts or access to new financial services. By contrast, as most established banks leverage the “inclusion” offered by FinTech to move away from physical infrastructure toward digital-first offerings, the digital transformation erects a new barrier to finance for those who rely on banking that integrates with the cash economy.

Data practices lay at the heart of this dynamic. For some informants at “Big Four” banks, the security risks associated with screen-scraping provided an incentive to expand third-party access to official APIs. This, informants argued, would allow established banks to retain control of customer data even as customers themselves moved to use third-party applications, rather than bank branches or the bank's own applications, to access their accounts. For other informants, the payment systems offered by FinTech applications operated sufficiently independently of banks to pose a competitive threat, unlike widely used supermarket payments, which rely on bank partners. Managers holding this view argued that banks should restrict official access to customer data, despite the risk of screen-scraping, in order to protect the banks’ market position. Both these views of the competition between established banks, digital banks and FinTech startups considered control of customer data the key asset over which firms would compete. Implicit is the assumption that established banks, digital banks, and nonbank startups serve the same customers. In their use of an imaginary of inclusion alongside their accounts of competing for these multibanked customers, informants engage in “participatory ambiguity” that conceals this regressive shift.

The extractive political economy of “appification”

In addition to the beliefs that the new technologies will foster market openness and financial inclusion, the Afrofuturist imaginary includes the intersecting beliefs that the new technologies which foster inclusion in Africa will also constitute “pan-African” innovations through which African firms can exercise global financial and technological leadership. This section analyzes the “participatory ambiguity” that facilitates the tension between these beliefs and a more extractive political economy in the shift toward “appification.”

This ambiguity is particular apparent in the implementation of “chat-banking.” Like FinTech service applications, “chat-banking” applications represent a platformization of finance (Langley and Leyshon, 2022), as they create double-sided markets for consumer banking data. By partnering with African banks, platform providers like Meta and Tencent gain access to an aggregate corpus of consumer dialogue that can be mined to identify patterns in consumer preferences and spending habits, and fed into the platforms’ own customer profiles and advertising algorithms. By partnering with the platforms, banks offload the cost of live customer service in branches, and gain access to customer analytics data from their platforms partners. Like the platforms, banks use these analytics to identify consumer profiles and develop products and targeting mechanisms.

For the bank account holder, chat-banking presents a paradox: a form of “mass personalization” (Kotras, 2020) in which what appears as a personalized dialogue is in fact used to place the consumer in an aggregated dataset, and refine the dataset to sell new products to all. Indeed, the predictive data generated by such aggregation can be used to dynamically alter product pricing, by assessing a consumer's financial risk profile based on their social graph. This data has also been used as a mechanism for extracting value from the users (Bernards, 2019).

South Africa's Discovery Bank, for example, has partnered with insurers in South Africa, the United States, the United Kingdom and France, as well as with platform firms Apple and Amazon to leverage the data customers create in a lifestyle app, Vitality, to dynamically inform health and life insurance prices, raising backlash about the possibilities of racial and other discrimination, as well as a protracted lawsuit about who owns the data, and which firms are permitted to extract or create value from it. As Jeanningros and McFall (2020) have argued, mass personalization does “not so much intrude on the person as summon an entirely different construct, a person mobilized, temporarily, dynamically, and contextually, only for the purposes of making a market offer.” The financial sector is in some respects an unsurprising home for these logics, as financial data, in the form of credit history that feeds into credit rates, has served as both a tool of record-keeping and a form of behavioral surplus, long before digital forms of “surveillance capitalism” emerged (Lauer, 2020).

These platform finance products sit ambiguously at the nexus of surveillance and recognition. Like digital banking and FinTech apps, their proponents emphasize their ability to make finance more accessible to the consumer, a token of belonging on a recognition paradigm. Yet in the double-sided markets they create, in which the consumer's data is extracted in the aggregate to feed the targeting algorithms of not only banks, but their Big Tech partners, chat-banking apps follow the extractive paradigm of platform capitalism. While all three banks that make use of such services were eager to emphasize that the third-party chat providers are not authorized to store transaction data, Standard Bank has since suspended its partnership with Tencent over security concerns (Vermeulen, 2020). Meanwhile, ABSA suffered a significant cyber-attack in 2020 which it attributed to vulnerabilities created by its links to third-party applications, and was continuing to identify new compromised data from the hack two years later (Buthelezi, 2022).

Moreover, the choice of international partners headquartered in the United States and China sits in tension with the claims made by South African bankers that chat-banking represents the fulfillment of pan-African ideals. One bank CEO boasted of his firm's chat-banking program, “People will be able to do their banking without ever having to leave their favorite messenger app. That's Africanicity in action.” While African firms offered the innovation to let customers bank while they text, the “favorite messenger apps” they use to do so are made and controlled overseas. As in the case of the FinTech apps, data practices sit at the heart of this tension. Chat-banking, like banking as a platform, depends on the commodification of user data as an extractable resource. The pan-African claims made for these applications elide the power distribution inherent in assessing whose data is of value, and who gets to make value from it. App-based banking has disproportionate value to customers with reliable internet access, while heightening the exclusion of those who rely on traditional banking infrastructure. Geographic and class-based inequalities in access to mobile data, especially on a private and secure network (rather than a public hotspot) render the service more available, or at least safer to use, for those who are already well-networked in the banking system.

Moreover, contrary to the Afrofuturist imaginary's promise of financial inclusion, the “big data” analysis of customer chats provides financial firms with the deep profiling necessary to systematically select for more lucrative consumers, and exclude others (Gabor and Brooks, 2017). This makes the appification of South African banking a lever of “digital disempowerment,” in which consumers are given more services to use without real control over how their data is deployed (Quinn and Epstein, 2023).

Discussion

South African financial professionals, both in industry and in regulatory agencies, express a shared social imaginary characterized by three interlinked expectations about the impact of app-based FinTech: an expectation of greater financial inclusion for the “underbanked,” an expectation of more competitive and open financial markets, and an expectation of African economic empowerment. Together, these expectations constitute an Afrofuturist imaginary in which new financial technologies will contribute to the development of South Africa, empowering both individual consumers and the nation.

The link between market openness and competitiveness is a subject of debate in the sociology of finance. Scholars including Hodson (2021) and Tang et al. (2023) have suggested that the emergence of standalone FinTech companies offering financial services without operating as banks disrupts banking business models. This, it is argued, incentivizes banks to innovate with new products or seek out new customers, making the market simultaneously more competitive for firms and more inclusive of consumers (Tang et al., 2023). This is the way in which the intersecting beliefs about market openness and financial inclusion in the Afrofuturist imaginary present the future of South African finance. These beliefs rely on a slippage between market accessibility for new firm entrants and social accessibility for consumers. In this way, the imaginary reflects a broader “win-win” worldview in contemporary development discourse, in which what is good for business merges with the social good (Olwig, 2021).

By contrast, scholars including Hendrikse et al. (2020) have shown standalone FinTech companies and established banks become codependent, as they rely on the same data via open-banking infrastructure and serve the same customers. In this account, which Bogers et al. (2019) have referred to as “coopetition,” the market is made more inclusive of new firms, but neither becomes more competitive nor expands its customer base. Our analysis suggests that app-based banking in South Africa is thus far following this “coopetitive” framework, which consolidates the power of established firms even as the market opens to new entrants. The proliferation of financial innovation in the South African banking sector has allowed for limited inclusion of new firms while safeguarding the position of monopoly banks as “platforms.” FinTech startups compete to offer services on those platforms, but, as in other platform markets, do not challenge the platform's infrastructural power. This finding is consistent with prior work on the coopetitive effects of FinTech's emergence on established banks (Larsson et al., 2023), as well as with critical scholarship on platformization more generally (Atal, 2021; Rahman and Thelen, 2019). Where prior scholarship has largely focused on the Global North, however, this study has demonstrated the tension between inclusion and consolidation in an emerging market.

The continued dominance of monopoly banks in the FinTech landscape has both political and economic consequences. As Tim Wu has argued, even where consolidated markets deliver economic value to consumers, there remains a political “problem with bigness” (Wu, 2018). In markets where a few firms dominate, those firms gain unaccountable political power to influence policymakers and set the rules of the game in ways that preclude future challenges to their dominance. Market power and political power, in other words, are mutually reinforcing. Indeed, early pioneers of competition regulations sought to break up monopolies for political rather than economic reasons (Robertson, 2022). Our argument, that app-based banking in South Africa may consolidate the power of dominant firms and elite customers, despite the entry of new firms, draws on this view of competition as inextricable from questions of power distribution. In this, our analysis is also consistent with research on prior financial inclusion efforts in South Africa, which similarly found a tendency toward monopolization which rendered underbanked consumers at greater risk of exploitation (Torkelson, 2020).

Moreover, the appification of South African finance has expanded the offering to the most well-off consumers, and incentivized banks with physical branches and cash services to move in the direction of digital-only offerings. Where previous scholarship on “coopetition” has documented the tendency of established banks to close physical branches in order to compete with FinTech startups (Larsson et al., 2023), in a Global North context where access to the internet is near-universal, these closures may not have the same implications for financial inclusion as in the Global South. In South Africa, where a relatively high proportion of consumers have access to traditional banking, but few can afford access to mobile data, “app-based banking” that incentivizes the withdrawal of physical branches and cuts links to the cash economy curtails the services available to the “underbanked.” This reality is in direct tension with the imaginaries of financial inclusion and empowerment that proponents of South African FinTech espouse, providing additional evidence for what Girard (2022) has identified as a “participatory ambiguity” around the political implications of digital finance interventions in a developing world context.

Finally, the Afrofuturist imaginary centers the potential for app-based banking to position African financial firms as authors of new developmental and technological pathways. In practice, however, foreign-owned social media platforms are key beneficiaries of these programs, who benefit through the extraction of South African user data. The security concerns over “chat-banking” raised at both Standard Bank and ABSA underscore that in these programs, both African firms and consumers are incurring risk to benefit these foreign firms headquartered in global superpowers—the United States and China. Promises of innovation achieved by African firms to empower African consumers—the Afrofuturist promise of “developmental rebellion”—thus conceal the extraction of African data to benefit foreign capital.

This has particular significance in an African context. For centuries, global economic players have sought to test ideas and technologies in Africa that they were unable or unwilling to trial elsewhere (Tilley, 2011), with contemporary forms of “data colonialism” and “digital colonialism” heirs to this older pattern of extraction (Couldry and Mejias, 2019; Kwet, 2019). The duality between empowerment and (neo)coloniality in South African app-based banking echoes previous findings of “digital colonialism” in financial technology (Langley and Leyshon, 2022; Natile, 2020). However, where digital colonialism implies the external imposition of control, in the South African banking sector, both the promises of economic empowerment through technology and the practices that transfer power to foreign firms are devised by African financial professionals. Moreover, it is precisely this “African innovation,” in which African banks launched partnerships with social media platforms that the platforms did not or could not secure with banks elsewhere, that make the extraction possible.

The Afrofuturist imaginary allows South African finance professionals to maintain “participatory ambiguity” about the implications of the business model they are creating. As defined by Girard (2022), participatory ambiguity is a process by which development actors “construct multiple cognitive frames around a central idea,” allowing actors to sustain ambiguity about the purpose or impact of development activities. This article argues that in South African FinTech, the Afrofuturist imaginary facilitates this kind of ambiguity, allowing financial professionals to sustain the two-way tension between imagined potential for inclusion and empowerment and real practices of consolidation and exploitation in the implementation of app-based finance.

Conclusion

The South African government is currently exploring, but has not yet adopted, regulations to govern these double-sided platform finance markets as well as final regulations on the outcome of the FinTech sandbox (Goga, 2020). In this context, the experiments in digital banking considered in this article present ambiguous lessons.

This article has examined the way that South African financial professionals imagine the social potential of new app-based mobile finance, conceptualizing the “Afrofuturist imaginary” to describe three intersecting beliefs about the future these technologies will bring: greater market openness and competitiveness, financial inclusion and (South) African economic empowerment. This article has argued that the institutional constraints of the South African financial market shape the ability of app-based banking to realize this Afrofuturist vision. These structural limitations have led to the consolidation of power among monopoly banks and the reliance on foreign platforms, such as Meta and Tencent, as partners for app-based banking. Rather than broadening access, the emerging FinTech applications primarily meet the needs of affluent, urban, and multi-banked consumers. Moreover, the shift to digital services—while economically efficient—has led to the closure of physical branches, further marginalizing South Africa's largely underbanked population.

Where the Afrofuturist imaginary promises that technological innovation will reverse or destabilize existing social hierarchies at home and abroad through developmental rebellion—empowering the underbanked, positioning African firms as leaders in a global industry—the ongoing practical implementation of app-based banking reveals dynamics of consolidation and extraction that that entrench those hierarchies. This highlights a form of digital colonialism that directly contradicts the Afrofuturist vision of postcolonial empowerment. Industry professionals profess to bring the Afrofuturist imaginary into being, while maintaining “participatory ambiguity” about the market realities of their new products. While there is always a gap between social imaginaries and reality, the tension at play in the South African financial sector sheds light on why this particular imaginary is difficult to actualize. The two-way tension between inclusion and empowerment on the one hand and consolidation and extraction on the other reflect both particular features of South Africa's financial sector and regulatory regime and general features of digital platform markets.

This platform duality has particularly trenchant significance in a national context where private sector social investment has been made a central pillar of post-apartheid transformation. The underbanked, who are also more likely to lack full access to mobile data technology, are disproportionately HDSAs whom transformation programs are intended to benefit. Yet as critics including Tangri and Southall (2008) have argued, these programs allow firms in many sectors to profit from the appearance of “doing good” without substantive impact on racial, class or other inequalities. While bank executives interviewed for this study optimistically argued that “what is good for the country is good for our bank,” framing technological innovation in Afrofuturist terms, they also conceded that the financial sector remains largely untransformed. The Afrofuturist promises made for app-based banking as a form of “Tech for Good,” when contrasted with the real tendencies to consolidation that these technologies incentivize, underscore this critical account of privatized social justice.