Legacy systems stall Africa’s fintech growth

by MARIA MACHARIA

NAIROBI – AFRICA’S fintech sector has established itself as a global force, driven by strong investment flows and compelling market fundamentals.

In 2025, the continent’s tech startups attracted approximately $4.1 billion in combined equity and debt funding, with fintech remaining the largest equity segment.

This momentum reflects a market rich with opportunity, particularly in areas such as cross-border payments, SME lending and embedded financial solutions.

Yet, despite this rapid innovation, a critical challenge is emerging.

According to Mandla Mbonambi, CEO of Africonology, the sector’s ability to integrate new technologies with existing systems is lagging behind its pace of innovation.

Legacy infrastructure, fragmented data and outdated architectures are increasingly acting as barriers to progress.

“Integration has become the real constraint,” Mbonambi explains.

“Legacy systems were never designed for real-time, API-driven environments. Data remains siloed across multiple platforms, limiting personalisation, operational efficiency and effective governance.”

As fintech solutions such as digital wallets, instant payments and platform-based services expand, many organisations are attempting to layer modern capabilities onto ageing core systems.

This creates inefficiencies, delays and higher costs, particularly in areas like cross-border transactions where seamless connectivity is essential.

While Africa’s innovation has outpaced many global peers, the complexity of integrating these advancements is now a defining challenge.

This issue is not unique to Africa, but it is more pronounced due to the continent’s rapid digital leap.

Poorly managed data migration, incompatible system architectures and insufficient testing protocols continue to complicate integration efforts.

As a result, companies must adopt more strategic approaches that align technology investments with broader business objectives.

Industry data highlights the scale of the problem. The average enterprise now operates hundreds of applications, yet only a fraction are fully integrated.

Data silos remain widespread, and IT teams spend significant time building and maintaining custom integrations, slowing overall progress and limiting innovation.

To address this, organisations need to prioritise four key areas: modernising legacy systems, enabling API-led connectivity, adopting integration-as-a-service models and developing platform expertise.

Rather than replacing core systems entirely, businesses can re-architect them to coexist with newer technologies, preserving past investments while improving flexibility.

API-led approaches allow for more efficient data sharing, partner integration and service delivery, reducing reliance on fragile point-to-point connections.

Meanwhile, embedding integration capabilities into organisational processes ensures consistency, governance and scalability.

Africa has already demonstrated leadership in mobile money and financial inclusion.

The next phase of growth will depend less on visible innovation and more on the underlying systems that support it.

Long-term success will belong to organisations that can seamlessly connect technology, data and ecosystems in a secure, scalable and sustainable way.

– CAJ News