According to a report by McKinsey & Company in May, Africa’s banking sector has been identified as one of the most dynamic financial markets across the globe.
As Ethiopia hosts the 29th Connected Banking Summit & Innovation & Excellence Awards in Addis Ababa, the summit brings together banking executives, policymakers and technology service providers and regulators to discuss the future of the country’s digital financial transformation.
The theme of this year’s conference is Building Digital Financial Systems and Accelerating Banking Modernisation in Emerging Markets. The event has been organised amidst Ethiopia’s initiatives to modernise its financial sector by expanding digital payments and increasing financial inclusion.
The summit is attended by participants not only from Ethiopia’s banking industry, but also from East Africa and other regions. It is a platform for companies across the fintech sector to exchange ideas and share knowledge on the emerging technologies and strategies shaping the future of the banking sector.
The discussions this year reflect the expanding nature of Ethiopia’s banking sector, driven by legislative changes, an increase in fintech activity, a rise in the use of digital services, and a spike in demand for secure, customer-focused financial products.
Digital banking transformation, modernising core banking, real-time payments, payment interoperability, AI and cybersecurity are the primary subjects on the agenda. Ethiopia’s National Digital Payments Strategy, which aims to create a more robust, inclusive, and digitally enabled financial environment, is in line with these discussions.
The summit brings much hope for the banking sector in Ethiopia and across the rest of the continent. According to a report by McKinsey & Company in May, Africa’s banking sector has been identified as one of the most dynamic financial markets across the globe. High interest rates and increased growth in non-interest income have contributed to its elevated performance, compared with other regions in the world.
The global banking sector has had an impressive run, with total revenues and rate of equity (ROE) reaching around $5.9 trillion and hovering around the 10% mark, respectively. Despite this stellar global performance, African banks were able to distinguish themselves. The report suggests that the banks delivered an ROE of 19% in 2024 and 17% in 2025. This also means that within the continent, the financial sector’s GDP share has risen by 0.4 percentage points between 2020 and 2024.
Currency fluctuations across the continent have, however, clouded this rapid growth. Locally, the banking sector has expanded 17% annually. When converted to the US dollar, currency depreciation and inflation reduced the reported revenue growth to an annual rate of 5.2%, from $81 billion in 2020 to $99 billion in 2024.
It is worth noting that Africa’s financial market is highly concentrated, and only 5 countries account for nearly 70% of all revenues in 2024, with most in South Africa and Egypt. Of the continent’s $100 billion banking market, South Africa contributed a whopping $26.4 billion. Egypt’s banking sector revenue was $18 billion, and Nigeria, Morocco and Kenya followed with $8.7 billion, $6.9 billion and $5.9 billion respectively.
While some analysts believe that these five top performers will retain their positions as the sector’s growth engines, others argue that changing banking regulations in many countries, including Kenya, will invariably alter Africa’s financial landscape.
In conclusion, Africa’s banking sector is undergoing an important and much-awaited transformation. Ethiopia’s recent summit taps into the growing potential in a dynamic continental market as the country’s banking industry moves towards increased digital adoption. Strong financial outcomes and growing inclusivity point to a promising future despite obstacles like inflation and currency depreciation across the continent. African markets are well-positioned to close current gaps, boost resilience, and change the larger financial environment in the years to come because of deliberate modernisation and regulatory reforms.
