Joel Muhumuza, the chief executive Flyhub.


Five digital economy trends to watch

What you need to know:

With more business and in fact, more of our lives happening online-the question of data sovereignty will raise its head even higher. 

The Fourth Industrial Revolution is one of constant innovation, revolving around advances in Artificial Intelligence (AI), robotics, the Internet of Things (IoT), Web3, blockchain, 3D printing, genetic engineering, quantum computing, and other technologies. 

From this mix have emerged countless products and services that have become an essential part of our daily lives. From your basic mobile money to ChatGPT, we are being bombarded by ever-greater levels of convenience. 
Having spent the last eight years of my career working in the rapidly evolving digital financial services sector, the only thing I know is how bad we are at making predictions of where tech is going.  However, there are five areas to watch for this year.

Artificial Intelligence and the limits of automation 
The capabilities of the AI-based ChatGPT have captured the imagination of the world. Natural language processing models paired with machine learning are creating a fun way to retrieve and manipulate data. 

Behind all the hype is a serious shift into a new world of work. Some businesses will find it much easier and cheaper to provide customer services and maintain routine tasks. 

While workers will worry that their employment is increasingly precarious, I think we are overestimating what can be automated and ‘routinised’ with algorithms. There are always exceptions, especially plenty of practical artisan skills which have yet to be perfectly replicated by machines. 

But one thing is clear: Everyone needs to learn to code. I expect us to see a resurgence in interest in such vocations should AI start to eat away at knowledge work, and similarly to see new fields of knowledge work emerge. 

Cybersecurity-the threat 
Within FITSPA, Uganda’s financial technology association recently held a meeting to discuss our joint response to cyber-security threats. 

Two things stood out. We tend to take cyber-security seriously only after a major attack has occurred and due to the reputational risk, prefer to “quietly manage the issue’. 

Guests inspect some racks housing servers at Raxio Data Centre in Namanve. Already, banks in Uganda are required to store data locally. PHOTO/  STEPHEN OTAGE

Yet, this works counter to the safety of all of us, as the lessons learned; the names of perpetrators, and methods used to hack our environments could help others avoid similar situations. Security will require us to cooperate and not just compete. 

Secondly, the weakest factor that raises the risk of cybercrime is human nature.
It’s usually people with access to the data, to the systems and by being simply careless that frequently cause the problem. 
Far from it being just a moral failing on the part of the staff (this is too low resolution a conclusion), it is an issue of incentives, of process, and how we need to embed security as a way of life just as we focus on (or at least are meant to focus on) safety as we drive on our roads.

Data sovereignty
For me and my country: It’s a cliché at this point to talk about the importance of data. But we are in this weird place, where we all know it’s important but don’t fully grasp where to begin, and what ways the shape of data sharing, storage, ownership, and monetisation affect us. 
With more business and in fact, more of our lives happening online-the question of data sovereignty will raise its head even higher. Already, banks in Uganda are required to store data locally, and a legal structure for data processors was passed in 2021 specifying the requirements for any business to consider itself qualified to process, store and protect data. However, the debate continues on who owns and who should benefit from citizens’ data on citizens as well as which third parties should have access to it. 

Deep faked: Genuine mistakes
Not mentioned as much under AI, but deep fake videos and audio are altered content online that can easily fool the untrained eye. These fake videos especially are well crafted to have famous political, and social figures saying things that could incite violence, make erroneous costly decisions etc. The ability to spot fake news, propaganda, and altered videos is only going to get more difficult. The skills for being online will be greatly tested. 

Remember, every con man will tell you that the best mark to take advantage of is self-confidence in their skills and ability. A confident person is less likely to think they’re being fooled. 

Mobile money

Mobile money, what next? Mobile money penetration has gone greater than anyone could have expected. During the lockdowns of 2020 and 2021, this solution allowed a largely unbanked population to pay for groceries, receive support funds, and avoid human contact (itself a painful adjustment we all had to make). 

In 2023, value-added services such as budgeting tools, auto-saving, revolving credit, etc on this payment ecosystem will be necessary as inclusion hasn’t yet delivered prosperity. Players like Wave entered the market only to find the huge cost of cash management, above-the-line marketing and cost of switching services that are real challenges in this market will keep the two big Telcos in control for years. 

On the banking side, the move towards the implementation of a national Switch means a shift in the payment aggregation service (payments aggregators allow for bulk payments processing) model. Banks similarly look to continue to provide wallet alternatives as they see Fintechs moving faster and meeting unique niche needs well. 
Stanbic’s Flexipay is an example of a wallet solution which low to no fees for transactions. Perhaps we will see a new model-one that makes transactions free and retrieves value some other way other than transaction pricing which retains the remittance solution background that mobile money is. 
The idea of paying sending and withdrawal fees when paying for face-to-face needs to get a strong solution. Services like Momo pay and Airtel Pay show the move towards this, but are still not taken up as universal payment options. The mobile money superhighway is seeing traffic, but all the users still complain about the pricey speed bumps. 

Joel Muhumuza is chief executive at Flyhub.