Africa’s financial services can be bolder when it comes to growth and innovation ambitions

Africa’s financial services sector is entering a new growth phase, despite a robust performance in 2025. Financial services groups on the African continent have kept pace with global performance but still trail leading developed markets, particularly in Europe and Northern Asia. Sustaining momentum will depend on how effectively institutions translate current performance into innovation-driven growth.

This is according to the recently released “2026 Future of Finance” report from Boston Consulting Group (BCG) which notes: “Financial institutions have earned

the right to be bolder on productivity, growth, and innovation.”

According to the report, financial services groups in Africa delivered Total Shareholder Return (TSR) of 24% – marginally above the 23% global average. However, they lagged Eurozone peers (37%), Japan and South Korea (37%), Europe non-Eurozone (35%) and Canada (28%).

Analysing the TSR data, Tijsbert Creemers-Chaturvedi, Managing Director and Senior Partner, BCG Johannesburg says: “One of the most important findings in the report is that financial institutions were the top-performing sector globally in 2025 in terms of value creation. African institutions have kept pace with the global average, which signals a strong basis for future growth, even if some developed markets remain ahead.”

Creemers-Chaturvedi adds: “When we look more closely at performance over the past three years, the leading business models are clear. Digital banks, universal banks with strong corporate and investment banking platforms, and specialised banks have generated the highest returns. This points to a shift toward more focused and scalable models.”

While South Africa has long been recognised as the most advanced financial system on the African continent, the best returns have not necessarily come from the tip of Africa.

Othman Omary, Managing Director and Partner, BCG Casablanca and head of Financial Institutions for the Africa node says: “Interestingly Tanzania with 59% TSR between 2022 and 2025 was the standout performer followed by Kenya with 36% and South Africa at 24% – this highlights the growing maturity of financial services institutions across the continent.”

Omary adds that Kenya also illustrates the strong link between financial performance and fintech innovation, with mobile money and digital ecosystems enabling broader financial services growth across the economy.

Beyond high-growth markets, Morocco reflects a different dimension of strength. Moroccan banks delivered solid TSR performance and stand out for valuation resilience, with all listed banking equity trading above book value. This points to strong profitability fundamentals and sustained investor confidence in the market.

South Africa, by contrast, represents a more mature and stable market, with strong valuations and TSR in line with the continental average at 24% and strong valuation support. Compared to faster-growing markets like Tanzania and Kenya, performance has been more stable, underlining the opportunity to unlock further growth through innovation and new business models.

Alongside banking performance, Africa continues to be one of the most dynamic fintech environments globally. Platforms like M‑PESA in Kenya have demonstrated how digital financial services can scale rapidly and expand financial access, while other companies including Flutterwave, Paystack, Chipper and Wave are building payments infrastructure and enabling cross-border commerce.

This is supported by the findings of the 2026 Global Fintech Report from BCG and FT Partners which highlights that fintech is reshaping the competitive landscape. The Middle East and Africa fintech market grew around 20% in 2025, supported by mobile money, digital wallets, and expanding financial inclusion, opportunity for growth however remains, particularly in business-to-business financial services, lending, and insurance.

Cross-border payments in particular represent a significant opportunity, as fintech players address inefficiencies in intra-African and international transactions, enabling faster and lower-cost payment flows for businesses and consumers.

The next phase of growth is likely to come from deepening these platforms, moving from financial inclusion to monetisation by expanding into lending, insurance and business services.

While Africa outperformed the global average on TSR, the underlying drivers highlight untapped opportunity. Structural profitability gains have been more limited than in developed markets, with pressure on margins and slower productivity improvements which points to significant upside from operating model transformation and technology adoption.

Forward-thinking leadership teams in the sector are now turning their attention to how they build on the momentum of the last few years – moving from cost-containment to innovation-fuelled growth.

BCG identifies the following imperatives for banks in its 2026 Future of Finance report.

• Organisations need to use AI to reset productivity structurally, not incrementally. Most recent profitability gains reflect income uplift combined with cost containment – rather than structural transformation of the operating model. Winning financial institutions are focusing on structural operating model redesign rather than incremental cost cutting, shifting technology spending from run-the-bank to change-the-bank, simplifying product and tech architecture, and embedding AI in day-to-day work with clear economic ownership.
• Rebalance capital toward tech-led growth. After years of industry emphasis on cost, growth is reemerging as the more powerful value lever for institutions trading above book. Sustaining recent value creation will require a renewed focus on growth and corresponding shifts in capital allocation.
• Plot an active M&A portfolio strategy. For the first time in more than a decade, valuations, capital headroom, and investor expectations for financial institutions align in favour of active portfolio reshaping. This includes increasing scale in the core; expanding into attractive pockets of value; and divesting to optimise portfolios.
• Position early where disruptive trends intersect. AI, nonbank financial institutions, and digital assets continue to disrupt the financial institution landscape, but their most significant impact has yet to emerge. Their combined impact will influence competitive positioning, revenue models and operating models.
• Concentrate CEO-owned AI bets and get execution right. Winning institutions focus on a portfolio of high-impact initiatives supported by technology, data, risk and compliance, operating model and talent at scale. CEOs must take direct ownership of this transformation.

Creemers-Chaturvedi concludes: “We believe it is an imperative for banks to sharpen their focus on a small number of CEO-owned AI bets and execute them with discipline. Leading institutions are concentrating investment on a portfolio of six to eight high-impact initiatives, chosen through a rigorous assessment of value, competitive advantage, reusability and time horizon. For African financial institutions, this presents a clear opportunity to build on strong performance by accelerating innovation, scaling fintech ecosystems and embedding AI into core operations to drive the next phase of growth. Ultimately, success will come down to ownership, focus and disciplined execution.”