GLOBAL INSIGHT / Mauritius report 2019

Fintech: Fusion of finance and new technology drives digital success

GLOBAL INSIGHT

The birth of fintech has created a highly competitive global industry focused on innovation and compliance with strict regulations, with Mauritian firms playing a big part in the digital quest

Given the speed with which the global fintech industry has grown, not to mention the fierce competition among countries to establish themselves as regional, or global bases, it is no surprise to see Mauritius has established the Mauritius Africa FinTech Hub (MAFH). Described as a “fast-growing ecosystem where entrepreneurs, corporations, governments, tech experts, investors, financial service providers, universities and research institutions can collaborate to build cutting-edge solutions for the emerging African market,” MAFH is confident about its prospects, and those of fintech. As countries race to establish themselves as global hubs for revolutionary digital hardware and software for fintech and blockchain, Mauritius is determined to ensure it develops the right regulatory framework and operating environment for such state-of-the-art technologies to not just survive, but thrive.

The precedents are certainly positive, as Samade Jhummun, CEO of Global Finance Mauritius, underlined: “Mauritius has a long history of reinvention and is recognized for its openness, ability to adapt and respond to changing times, as well as its highly educated and skilled workforce. These attributes will help us on our future path to a high-income economy which will generate jobs and growth for future generations, with the Mauritius International Financial Center (IFC) at the heart of it.” Capital Horizons is an award-winning, boutique provider of financial services offering bespoke solutions to a broad range of customers. Licensed and regulated by the Financial Services Commission (FSC)  in Mauritius, the firm offers corporate and legacy management services to institutions and high net worth individuals, respectively, and stands out for its capacity to cater to the Japanese. The firm has focused on combining fiscal optimization through the creation of offshore structure while maximizing what the Mauritius jurisdiction has to offer, namely debt restructuring through the various international banks present.

This has allowed many of the company’s clients to decrease their cost of debt by utilizing interest rate swaps. Moreover, cross-border financing has allowed its clients to generate an offshore war chest, which can be used for international investments while choosing in which jurisdiction they wanted to keep their assets tied. “One of our proudest moments came this year when we were nominated by at least five international magazines, and won the corporate finance advisor of the year for Mauritius by (digital business magazine) Acquisition International,” revealed Capital Horizons CEO, Shaan Kundomal, who also sits on the board of directors of several firms, including a subsidiary of the SBM group. “Inspired by these achievements, we are constantly investing in our infrastructure through a secured cloud-based enterprise resource planning system on which our clients can monitor all their transactions, accounting, net asset values and requests”

Adherence to regulations pays dividends

Trust and good governance are at the heart of Capital Horizons’ philosophy, with CEO Shaan Kundomal highlighting the importance of such compliance given the national regulator’s eagle-eyed officials are always watching. “The FSC has a very strong surveillance enforcement division, and every year send their teams to audit all companies like ours to ensure we are doing things right and our clients are proceeding in transactions correctly,” Kundomal said. “It’s highly regulated and monitored environment, while on the other side there is ease of doing business without much bureaucracy.”

Headquartered in Ebene CyberCity, MauBank is the third-largest bank in Mauritius and offers a full range of financial services to private and corporate clients, high net worth individuals, companies, public and financial institutions. MauBank is at the forefront of the digital revolution and a major investor in new technology to enhance customers’ experience.

Innovative mobile apps win awards

“We do not have a digital transformation strategy, we have a customer experience strategy,” said Premchand Mungar, CEO of MauBank. “ This may seem like a strange statement, but one of our main objectives is to provide a class-leading customer experience and no technological tool can deliver that by itself. Digital transformation for us is not an objective, it’s a means to an end. “We are not approaching digital transformation from the perspective that we want to implement a specific technological strategy. For instance, we are not saying our strategy is to use our data to generate next-product-to-buy predictions or apply distributed ledger technology to cross-border payments. These are all tools, tools with great potential,” Mungar said

“Our strategy is not about implementing digital tools, but looking at our customer experience as a whole. We have identified three concrete goals: We want our products to be highly personalized, operationally transparent to our clients, and be efficient in delivering our products. According to a 2017 survey, nearly half of the respondent financial institutions said their latest digital investment is failing to generate returns higher than the cost of capital. One of the main reasons why any transformative strategy does not deliver is because of a failure to scale up.”

Mungar added MauBank made a clear statement of intent with its mobile banking app WithMe, designed to adapt to customers’ changing needs and ensure a seamless banking experience. “We became the first bank in the country to on-board customers through a mobile app,” he continued. “Online leasing application platform MyLease allows customers to calculate how much lease they could take and make their application easier, coupled with a 10-minute approval in principle. Both products won the Infosys Finacle Client Innovation Award 2019 in the API Innovations Category and Emerging Technology led innovations Category.”