Raxio Data Centre to smoothen integration, aggregation for FinTechs

By our writer

While there has been growth in the number of Financial Technology Companies (FinTechs) integrating with telecoms and banks to facilitate easy payments and access to financial services, many will attest that the process is not that easy.

It involves holding discussions with different institutions before they can agree to pair (peer) with them over the internet.

This is, however, set to change, following the establishment of Raxio Data Centre in May this year. The first Tier III data centre in Uganda, it allows any fibre service and cloud service providers to connect and provide fast and uninterrupted services to their clients.

The Raxio Data Centre Uganda General Manager James Byaruhanga says that FinTechs can now integrate easily, using Raxio’s internet exchange point that enables direct peering to allow cross-connection with banks, telecoms and government organisations under the same roof.

This also eliminates risks that come with peering over the internet such as cyber security risks, red tape, bureaucracy and performance and latency.

Byaruhanga notes that data centres which provide carry-neutral and cloud-neutral services have become the centre stage of the digital revolution and are the heartbeat of the ecosystem of internet globally.

“If anyone wants to be part of the growing fourth industrial revolution and have their equipment in a location that is predictable, stable and ensures endless connectivity to your customers, a data centre is a place you want to be,” he says, adding that the evolution of carry-neutral certified data centres has been a cornerstone of a lot of development in the internet revolution.

Co-location services

Raxio will also provide co-location and cross-connect services to Ugandan companies for better service provision.

“Imagine you are a Ugandan FinTech but you are either going to take up a cloud service somewhere you sometimes  don’t even know or you are going to have your in-house servers which sometimes are interrupted.

“Raxio provides an environment where when you are using your own servers, you can bring them and put them in our facility for much better service level to provide to your customers or you can buy a cloud service that is sitting in our data centre with one of our cloud service providers.”

Byaruhanga says they are in discussion with global service providers like Amazon Web Service, Microsoft and Google to have them extend their networks into Uganda, given that Raxio meets global standards.

Uganda is the first of the 12 countries Raxio Group plans to roll out. He says they have already broken out in Ethiopia as the second country and they are soon starting construction in Kinshasa, DRC.

The other countries are Mozambique, Tanzania, Zambia and Namibia, among others.

Despite existing risks, Byaruhanga says there are opportunities in the market especially given the huge data FinTechs generate, saying it is a goldmine for analytics to innovate the right products that meet consumer needs.

Raxio Data Centre is among the firms participating in the ongoing second edition of the 40-Days 40-FinTechs programme, organized by HiPipo in partnership with Crosslake Technologies, ModusBox and Mojaloop Foundation, and sponsored by the Gates Foundation.

The initiative seeks to enable FinTechs come up with solutions that facilitate cross-network financial transactions at minimal risks to enhance access to financial services.

The HiPipo Chief Executive Officer Innocent Kawooya says this year’s edition is Uganda’s most comprehensive foray into things like distributed ledger technologies, Artificial Intelligence, Big Data, Automated Customer Relationship Management, cash management and lending platforms.

He urges FinTechs to take advantage of the current COVID-19 pandemic to innovate more cashless payment solutions.

“We believe that, just like last year, FinTechs will take up the challenge and use the opportunity to ride the wave of appreciation for cashless payments the pandemic has brought,” Kawooya says

“We need to be prepared with appropriate products and have the appropriate real time payment systems in place to support an inclusive, interoperable digital marketplace that is both thriving and safe.”

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Conducive policy environment key driver of digital solutions – experts.

Our Reporter.

Financial technology companies (fintechs) have called for a conducive environment to enhance the adoption of digital financial solutions.

The appeal was made by Oscar Ofumbi, the Head of Business at Lend in a Box, a financial technology company during the two-day fintech landscape exhibition at Sheraton Kampala Hotel last week.

According to Ofumbi, the lack of a conducive policy makes adoption of digital financial solutions difficult.

“If you have a good policy, adoption will be a lot easier because when you talk about an ecosystem, you are talking about the people that are involved in the entire value chain. You need a good policy to ensure that each and everyone’s interest are well taken care of,” Ofumbi said.

It should be noted that while Parliament passed the National Payment Systems (NPS) Bill, 2019 about a month and a half ago, that will among others seek to regulate and provide for the safety and efficiency of payment systems and issuance of electronic money, the president is yet to assent to it.

Citing the Data Protection and Privacy Act (2019), the National Broadband policy and the NPS Bill, the Information and Communication Technology Minister Judith Nabakooba said that the government has set up a conducive legal regime that supports the growth of the sector.

However, Ronald Azairwe, the Pegasus Technologies managing director said that while there is more regulation which is expected to level the playing ground, the NPS is a double edged sword, which he said could make it a little harder for fintech startups to start. This, he said, is because of the whole licensing regime they are supposed to undergo.

“Regulation stands in the way of innovation; we have erratic regulations that sometimes come up and stifle innovation,” he said.

The landscape festival was organised by HiPipo, to mark the end of the 40-days-40-fintechs project, which was held in partnership with Crosslake Tech, ModusBox and Mojaloop Foundation.

The engaged fintechs were equipped with interoperability skills, using Mojaloop, a switching platform with a centralised service that brings together digital financial service providers to help boost financial inclusion in Africa.

The HiPipo CEO, Innocent Kawooya said HiPipo will continue advocating for a leveled playing field for all fintech players but noted that collaboration is needed to achieve this.

He said the project will not only change the way financial inclusion is done in the world but also transform millions of lives in years to come and change the way financial inclusion is going to be done in Uganda going forward.

Kawooya alluded to the need to secure payment platforms, saying that without that, people will lose trust and confidence in the digital payments systems.

“HiPipo recognises that this 40 Days 40 FinTechs season is just the beginning, and so much more needs to be done especially around raising the levels of confidence of customers in the digital payment systems. We shall continue with the same fearlessness: we are proud to continue forging Africa’s digital and financial landscape. And with the potential we have seen, with the talent we have helped nurture, we know that to ‘Include Everyone’ is more than just a dream, it is something we are making real…,” Kawooya said.

More Collaboration Will Foster Digital Financial Services Security

Trust of the financial eco system is central to mass adoption and deepening financial inclusion. Concerns of fraud and loss of customers` funds more so funds for the poor can lead to deep hesitation to use digital financial platforms and tools.

Mobile money has largely been delivered with more traditionally secure telecom channels such as USSD and STK. While these have their know vulnerabilities, their technical exploitation has been less perpetrated but a lot of social engineering through communication and persuasion of unsuspecting customers to share PIN, OTP and send money to fraudsters has been a very regular occurrence in the leading mobile money markets.

The era of interoperability fueled by leading platforms such as Majoloop will potentially increase the scale of possibility to fraud with fraudsters on one network targeting those on another network or bank to transfer funds over the interoperable Majoloop powered switch.

As thus, the industry stakeholders and players including telecoms, banks and regulators that handle KYC, need to collaborate more to share information of sim card centered frauds that fuel mobile social engineering fraud.

HiPipo Foundation Include Everyone program will take extra effort in our research, education and advocacy campaigns to ensure stakeholders appreciate the increased scale of social engineering fraud and collectively collaborate for information sharing.  This will also supplement efforts to combat AML and CFT.

Another dimension of growing risk is increased transactions over new generation digital channels i.e Apps, Web and social banking. Cybercrime that was initially Internet IP centric will hence forth increase as we see channel advances. Similarly, effort from tech and regulatory fronts will have to be boosted to hasten cyber protection of unsuspecting and naive consumers of which majority would likely be the poor, women and youth that a newly banking or semi banking citizens.

Join HiPipo Foundation during the Include Everyone advocacy events series to discuss these issues and provide best practice recommendation to addresses these financial inclusion challenges.