Modular Digital Banking for Africa
Author: Ekaterina Podgaiskaya
Last updated June, 20
Introduction
Across the African continent, a new wave of digital banking is coming—one that is characterized not by inflexible legacy systems or monolithic infrastructures but by modular, scalable, and modern tech stacks!
Whether from incumbent banks looking to renovate or innovative fintechs expanding the frontiers of financial inclusion, the trend towards modular digital banking infrastructure is accelerating. Banks, Electronic Money Institutions (EMIs), and fintechs in Africa are increasingly appreciating the necessity for agile systems that can keep pace with their customers' expectations, address evolving regulatory requirements, and facilitate seamless digital experiences across markets.
What renders this transition particularly critical in Africa is the unique combination of challenges and opportunities. The continent is characterized by a high rate of unbanked citizens, differing regulatory landscapes across borders, a rapidly expanding mobile-first user base, and an increasing
demand for decentralized and digitally offered financial services. Traditional banking infrastructure simply lacks the agility or cost benefit to address these requirements at scale.
On the other hand, modular digital banking architecture presents a more tailored, future-ready approach, allowing institutions to build, implement, and develop financial services as needed, in parallel with assurance of operational resilience and innovation pace.
In this article, we articulate why Africa requires modular digital infrastructure, detail the most important elements of such systems, and specify the kinds of key modules that can be implemented by financial institutions. Regardless of whether you are introducing a mobile wallet, activating agent banking, or venturing into cross-border payments and crypto, a modular strategy provides the agility and scalability to expand sustainably and serve Africa's heterogeneous and evolving markets.
Why Africa Needs Modular Digital Infrastructure
Unbanked and underbanked population
Africa still has one of the highest rates of unbanked and underbanked citizens globally. With over 350 million people on the continent who have not yet enjoyed formal financial services like savings accounts, credit lines, and insurance policies. They employ informal means of saving and/or borrowing that are insecure, unreliable, or downright exploitative. Traditional banks, bound by branch-based delivery and high overheads, have not been able to reach out into remote rural communities where infrastructure is poor and the average customer transaction size may be small.
Furthermore, the cost of expanding traditional banking structures to underbanked locations is generally too high. This has created an enormous financial access gap, especially in low-density countries, countries with weak transport infrastructure, or politically unstable nations. Modular digital infrastructure offers a more sustainable solution by allowing institutions to deploy lean, digital-first offerings that do not depend on physical branches. Mobile wallets, agent banking platforms, and cloud-native solutions can be used to reach rural and peri-urban communities at low cost, integrating them into the formal financial system for the first time.
Legacy core systems preventing innovation
Most African banks continue to run on legacy core banking systems that were built decades ago. The systems are monolithic, tightly coupled, and infamously hard to upgrade or scale. With changing customer expectations and heightened competition from fintechs, the legacy systems are a significant hindering force to innovation. It can take months or years—if possible at all—to add new features, bring new products to market, or integrate with external partners.
The lengthy development cycles of the legacy systems render the banks nearly incapable of experimenting or reacting
swiftly to the changes in the market. Additionally, the maintenance cost of these systems and their upgrades typically takes up a large chunk of a bank's IT budget, with no or little space for innovation or improving the user experience. Conversely, modular digital banking platforms are designed on the principles of microservices and cloud-native, enabling institutions to iterate rapidly, scale components independently, and prevent vendor lock-in.
Regulatory differences between nations
Perhaps the most difficult part of Africa is that it has heterogeneous regulatory environments. From varying types of licenses, capital controls, to data protection laws, each country has a unique set of financial regulations.
For a bank looking to expand its footprint across borders, this patchwork of compliance systems can be daunting. Inflexible technology platforms hardcoded to a single regulatory environment render it difficult to reshape services for new markets without being rebuilt from scratch.
A modular approach offers the flexibility to navigate this complexity. With configurable modules and compliance layers, institutions can customize workflows, limits, report formats, and user interfaces to meet local requirements without compromising on speed or security. Whether a fintech operates in a mobile money-dominant market like Kenya or a card-dense market like Nigeria, modular infrastructure allows for market-specific customization with a unified backend.
Agent-Led and mobile-first banking demand
Africa's mobile revolution has reshaped access to financial services. While it is still relatively uncommon for traditional bank branches to have reached many areas, especially in rural areas, mobile phones are exploding in growth, and smartphones are becoming the gateway to all sorts of financial services, including savings accounts and remittances. Meanwhile, agent banking has been an attractive format for broadening coverage in low-income or far-flung areas where digital literacy is still evolving. Local agents using point-of-sale terminals or mobile applications serve as intermediaries to enable customers to open accounts, deposit cash, or pay bills where there are no branches.
Modular digital banking platforms are particularly positioned to enable this hybrid approach of agent-based and mobile-first delivery. Institutions can launch mobile wallets, USSD interfaces, and agent portals as individual modules or as integrated parts of one ecosystem.
This provides consumers easy, safe services via the channels they're most familiar with, and fintechs and banks retain control, transparency, and compliance. By closing the gap between physical presence and digital outreach, modular infrastructure empowers last-mile financial inclusion.
Significance of time-to-market and scalability
Speed is a competitive advantage in Africa's fast-evolving fintech landscape. New startups pop up every week, introducing cutting-edge features that quickly catch on with digitally savvy users. Legacy banks and EMIs must be capable of responding to these market trends, and respond now. A drawn-out development or launch cycle can mean missing an emerging opportunity, losing clients to a quicker competitor, or not meeting evolving regulatory deadlines.
Scalability is also paramount. A service starting in a single city or jurisdiction needs to be capable of scaling to a national or cross-border user base without collapsing the system or necessitating a from-the-ground-up redesign. Modular platforms satisfy both requirements by allowing institutions to start with an MVP, pilot it with actual users, then add functionality progressively over time.
Since every module is independent and can be deployed separately, teams of developers can develop quickly, test frequently, and scale confidently.
What Is Modular Digital Banking Infrastructure?
Microservices-based architecture
At the heart of modular digital banking is a microservices architecture—a structure that divides the system into separate, independent components that handle individual tasks such as payments, onboarding, loan origination, or customer service. In contrast to monolithic structures, in which all services are tightly integrated and changes can impact the whole system, microservices enable each component to be developed, tested, deployed, and scaled independently.
This architectural model improves system resilience and simplifies maintenance.
If a bug is found in one module or if an upgrade is needed, developers can work on it separately without affecting the rest of the platform. It also allows financial institutions to select which functionality they wish to deploy first—a wallet, for example, or a card issuance engine—and add features incrementally without needing to rearchitect the entire stack. This flexibility is highly necessary in Africa because customer behavior, laws, and market needs greatly vary.
API-first design
An API-first design philosophy ensures that every component of the banking system can communicate seamlessly with others, whether they’re internal modules or third-party services. APIs, or Application Programming Interfaces, act as digital bridges that allow different systems to share data, initiate actions, and work together without manual intervention or custom integrations.
With an API-first platform, institutions can easily plug in third-party services like KYC/AML verification, mobile money wallets, payment gateways, or credit scoring engines. It also enables them to build bespoke frontends for different user segments, whether that is a lightweight USSD menu for feature phone users or a shiny mobile app for urban millennials. The modularity of APIs makes it easy to experiment, iterate, and partner with fintech collaborators across the ecosystem.
Cloud-native core with optional components
In contrast to legacy systems that rely on costly, centralized servers, modular banking infrastructure is usually cloud-native. In other words, it's designed from the outset to leverage the flexibility, security, and cost-effectiveness of cloud computing. With a cloud-native core, institutions can deploy their platforms on public, private, or hybrid cloud setups, as needed, to meet their particular compliance or data sovereignty needs.
Cloud-native architectures also provide elastic scaling, which enables institutions to manage unforeseen peaks in traffic, e.g., payday, holidays, or product launches, without over-provisioning. Since modules can be switched on and off according to demand, financial institutions can right-size infrastructure costs while still having the ability to scale quickly.
Configurable UX/UI layers
One of the strongest features of modular banking infrastructure is the potential to personalize the user experience layer. In contrast to hardcoded legacy interfaces, the platforms of today enable banks and fintechs to develop branded mobile applications, web portals, or agent dashboards that incorporate their brand and address customer needs specifically.
These interfaces are highly configurable to support features like multi-language translations, right-to-left flows to serve Arabic-speaking markets, and accessibility features to serve low-literacy users. This kind of configurability is especially necessary in Africa since cultural, linguistic, and technological circumstances differ by nation. A well-configured UX/UI layer makes digital banking look local, reliable, and simple.
Integration-ready ecosystem
Most promisingly, perhaps, is the ability of modular digital infrastructure to integrate with a wide ecosystem of financial and technology partners. Leading platforms have pre-configured connectors and plug-ins for leading services such as Know Your Customer (KYC) and Anti-Money Laundering (AML) tools, mobile money platforms such as M-Pesa or MTN MoMo, regional and international Payment Service Providers (PSPs), and even blockchain-based remittance solutions.
This plug-and-play capability dramatically reduces integration timeframes and budgets, allowing institutions to go live faster and support a broader range of use cases. Whether connecting to a local telco operator wallet, integrating into cross-border payment rails, or launching a DeFi-enabled savings product, a modular platform provides the foundation for seamless, future-proof innovation.
Key Institutions You Can Deploy
Mobile wallets
Mobile wallets are at the heart of digital banking innovation across Africa. These wallets allow users to hold and transact in multiple currencies, including local fiat and even stablecoins or tokens in more advanced implementations. With widespread mobile penetration, a mobile wallet becomes the first touchpoint for millions of users entering the digital financial ecosystem for the first time.
A well-crafted wallet enables QR code payments for merchant transactions, person-to-person (P2P) payments for day-to-day requirements, and contactless payments aligned with the increasing need for more secure, faster digital experiences. For fintechs and banks, providing a wallet that functions both online and offline, and across devices, unlocks both urban and rural populations.
Agent banking system
Agent banking has proven to be one of the most effective ways to extend financial services beyond the reach of branches. A modular digital core enables the deployment of a full-featured agent management platform, allowing institutions to onboard and manage thousands of agents across regions. The platform supports agent registration, tiered commissions, and geo-tagging for better visibility and operational tracking.
Offline transaction capability allows agents to continue serving customers even in the absence of network connectivity, synchronizing data back to the core once connectivity is re-established. For low-bandwidth or rural environments, agent banking offers a sure bridge from cash-based behavior to the formal digital economy.
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Lending engine
Lending continues to be a vital service need in most African markets, particularly among underserved customers and small enterprises. An inbuilt digital lending engine in the core platform allows banks and fintechs to offer credit products at scale much more effectively. The platform supports end-to-end digital loan origination, from application, approval, disbursement, to repayment.
Advanced engines integrate credit scoring tools using alternative data such as mobile usage, transactional behavior, or social behavior, which strengthens risk profiling in markets where traditional credit histories are unavailable. Automated repayment tracking and notifications streamline collections and reduce defaults, giving institutions a powerful way to generate revenue while supporting financial inclusion.
Card issuance & management
Despite the shift toward digital-first experiences, physical and virtual cards remain essential in modern banking. A modular platform allows institutions to issue, manage, and track cards efficiently, whether customers need a virtual debit card for online shopping or a physical ATM card for cash withdrawals. Integration with local card networks such as Verve or global providers like Visa and Mastercard ensures compatibility and reach.
A card management system allows activation, PIN generation, fraud detection, and card lifecycle management—those are the ones that are required to provide a secure and seamless customer experience. Issuing co-branded or multi-currency cards also makes it easier for banks to differentiate themselves in the competitive market.
Crypto wallets & payments
As cryptocurrencies gain popularity, African banks and fintechs are exploring how to offer crypto services in a secure and compliant manner. A modular crypto wallet enables customers to hold, convert, and pay both cryptocurrencies and fiat currencies. Pre-built features enable real-time fiat-to-crypto conversion and connection with crypto exchanges or on-chain payment rails.
Cross-border remittances become less expensive and faster using the crypto rails, especially for fee-choked corridors with slow settlement times. For financial institutions, deploying a crypto module can open new revenue streams and position them as forward-looking players in the global financial landscape.
Merchant tools
Serving small and medium-sized merchants is critical for growing transaction volumes and broadening financial inclusion. A modern core can deploy tools that help merchants accept digital payments and manage their businesses more effectively. This includes bill payment integration, so shopkeepers can offer utility payment services; airtime and data top-up reselling, which drives foot
traffic and loyalty; and robust point-of-sale (POS) systems with QR code capabilities.
Merchants can view transaction history, track sales, and manage payouts via simple dashboards, transforming their mobile phone into a revenue-generating terminal. These tools not only improve merchant operations but also create a broader digital payments ecosystem.
Core banking backend
At the foundation of every digital banking platform lies the core banking backend. This is where customer accounts, ledgers, balances, and transactions are managed with precision and compliance. A modern backend supports real-time processing, full ledger auditability, and automated reconciliation, ensuring integrity across all operations. It handles complex scenarios such as account hierarchy, multiple account types, and batch settlements.
Most significantly, it is built to be scalable, reliable, and secure, able to process millions of transactions per day without sacrificing speed or availability. It's the back-end powerhouse that enables all other modules to operate smoothly and reliably.
APIs for open banking
Open banking is becoming a transformative force across global and African markets alike. A digital banking platform with robust API support allows developers, partners, and fintechs to build new services on top of your infrastructure. Institutions can expose functionality in a controlled, secure manner via APIs—whether for account access, transaction initiation, or identity verification. A developer-friendly
sandbox makes it easy to test integrations, while documentation and support tools help external teams innovate quickly.
By supporting an open ecosystem, banks and EMIs can encourage collaboration, accelerate time-to-market for new capabilities, and remain competitive in the battle for customer engagement.
Legacy vs. Modern Core
Key differences in architecture
Legacy bank systems are typically built using monolithic architecture, where all the functionality is highly coupled within one codebase.
This structure renders the platform inflexible, hard to update, and vulnerable to cascading failure in the event that something goes wrong. Modern digital banking platforms, like Velmie, however, employ a microservices-based structure, whereby each module is a stand-alone service that can be updated or swapped without compromising the overall system. Modularity simplifies the creation of incremental updates for developing, testing, and releasing.
Also, legacy systems are normally centered on proprietary-coded functionality requiring months of engineering effort, whereas today's cores consist of configurable workflows that adjust to different market needs with minimal technical effort.
Effect on deployment speed
Speed of deployment is a key differentiator in the accelerated financial era we are living in. Conventional core banking systems take long and costly implementation cycles, even years, because of their complexity and their reliance on extensive customization.
Institutions are frequently forced to wait months before going live, delaying their ability to generate revenue or respond to market changes. In contrast, a modern digital core is designed for rapid deployment. Institutions can launch a minimum viable product (MVP) in just weeks, enabling them to test, iterate, and expand with agility.
This rate not only accelerates innovation but also reduces upfront risk, especially for new entrants or launches in an area.
Operational efficiency
Operating a legacy system is resource-intensive and costly. From server maintenance and license fees to lengthy training cycles for staff, the total cost of ownership (TCO) remains high. These systems also tend to be difficult to troubleshoot, requiring specialized knowledge and often involving external consultants. A modern core, on the other hand, is built for efficiency on every level.
Cloud-native deployment lowers the cost of infrastructure, automated monitoring simplifies maintenance, and user-friendly interfaces simplify the management of operations for in-house staff. With less overhead and quicker resolution of problems, institutions have more resources to devote to growth, customer service, and innovation.
Innovation and product expansion
One of the main drawbacks of legacy systems is that they are resistant to change. Adding a new feature or launching a product often means rewriting code, testing extensively, and risking outages. This stifles innovation and makes it hard for institutions to respond to emerging trends such as embedded finance or decentralized finance (DeFi).
A modern digital core, on the other hand, is built for continuous evolution. New modules can be added without downtime, and A/B testing can be conducted in production environments safely.
This allows banks, EMIs, and fintechs the space to try out new things—whether that's debuting a buy-now-pay-later product, integrating with a DeFi protocol, or facilitating tokenized rewards—without worrying about breaking the system or alienating users.
Selecting the Appropriate Tech Partner
Regional expertise counts
When you select a technology partner to accompany you into digital banking, among the most critical factors is local expertise. African markets are extremely heterogeneous—what will work in Ghana won't work in Ethiopia or Côte d'Ivoire, as detailed in our agent banking guide.
A partner who understands the nuances of African banking regulations, mobile money ecosystems, and central bank compliance frameworks can help you avoid costly mistakes and accelerate time to market. Additionally, support for multiple currencies, local languages, and integrations with regional payment networks ensures your platform feels native, not imported. The more context your partner brings to the table, the less time you’ll spend re-explaining the basics.
Ability to customize
Every institution has a unique vision, and your tech stack should reflect that. A strong partner will offer not just off-the-shelf functionality but the flexibility to customize rules, workflows, and branding to suit your specific market and customer segment. Whether you’re launching a Sharia-compliant product, a youth-focused savings app, or a crypto-enabled wallet, you need a platform that adapts
to your needs, not the other way around.
Flexibility also means deployment options—private and public cloud environments put data sovereignty, hosting cost, and infrastructure compliance in your control. Ultimately, an adaptable system means you stay in control of your identity while scaling innovation.
Proven track record
It's one thing to have a tech provider make promises. It's another way to demonstrate that they've actually achieved results!
Seek out partners that can refer to case studies in markets comparable to yours—implementations with regional banks, fintechs, or EMIs that demonstrate they can manage scale, regulation, and complexity in the wild. Request client referrals, particularly from institutions with analogous constraints or target user bases as yours. An experienced partner delivers more than just technology on its own—they deliver experience, insight, and a proven route that allows you not to re-invent the wheel.
End-to-end support
Developing a digital bank or financial product doesn't stop at code—it's a process from sandbox all the way to production. So you need someone who provides end-to-end capability. From initial sandbox access and API testing to production rollout, DevOps integration, and compliance readiness, they should be by your side at every stage. Look for clearly defined SLAs, responsive support teams, and built-in assistance for audits, reporting, and regulatory submissions.
The right partner isn’t just a vendor—they’re an extension of your own team, helping you move faster and sleep better at night.
New Trends in Digital Banking in Africa
Super apps and embedded finance
The future of African digital banking is integration, not isolation. Banks and EMIs are increasingly service platforms—embedding financial services into everyday apps and ecosystems where customers are already active. Whether it is lending on ride-hailing platforms or savings options within e-commerce platforms, embedded finance is the differentiator.
In the meantime, we're witnessing the emergence of super apps that are integrating payments, messaging, shopping, and financial services into a frictionless one-click experience. These models are being driven by fintech partnerships and open API marketplaces, which are allowing institutions to access existing user bases more easily and provide value without needing to own the interface.
AI and credit decisioning
Artificial intelligence is revolutionizing how financial institutions do credit, especially in data-scarce environments.
Traditional credit scoring methods are not relevant to the vast majority of African consumers who lack formal financial histories. Yet with the use of AI-based models, organizations can utilize alternative data, like phone behavior, social connections, or spending patterns, to better and more
inclusively calculate risk. The end result is more sophisticated models of lending that reduce the risk of default while expanding access.
AI also tailors financial products, either by adapting loan conditions in real-time or proposing savings schemes according to user behavior. For institutions, it is not only about efficiency—it is about tapping into new markets that were hitherto too risky or too unprofitable.
Green and inclusive finance
African digital banking is also proving to be a path to sustainability and inclusion. Banks are beginning to offer sustainability-linked loans and green financial instruments that reward businesses or individuals for acting in an environmentally friendly manner. Whether it is financing for solar solutions or benefits for reduced carbon footprints, green finance is starting to emerge.
In the meantime, inclusive finance is increasing with offerings targeting women, young people, and other traditionally underserved markets. From micro-savings apps for informal workers to group lending technology for cooperatives, the future of innovation is not just digital—It's equitable and impact-driven.
End-to-end support
Developing a digital bank or financial product doesn't stop at code—it's a process from sandbox all the way to production. So you need someone who provides end-to-end capability. From initial sandbox access and API testing to production rollout, DevOps integration, and compliance readiness, they should be by your side at every stage. Look for clearly defined SLAs, responsive support teams, and built-in assistance for audits, reporting, and regulatory submissions.
The right partner isn’t just a vendor—they’re an extension of your own team, helping you move faster and sleep better at night.
Conclusion
Africa stands at the cusp of a digital banking revolution, and modular infrastructure is the key to unlocking its full potential.
Traditional banking models have proven too rigid, too slow, and too expensive to scale across the continent’s diverse and dynamic markets. With over 350 million unbanked individuals and a rapidly growing mobile-first population, the demand for inclusive, adaptable financial systems has never been more urgent. Modular digital banking platforms offer a strong substitute—one where institutions can act fast, reach more customer segments, and adapt to the changing environment without resetting their entire stack.
By pursuing a modular approach, banks, fintechs, and EMIs can cherry-pick the components they require—be they mobile wallets, agent networks, digital lending platforms, or crypto integrations—and implement them in a manner that suits the realities of their markets.
This flexibility accelerates time-to-market, lowers costs, and
unlocks innovation. It also allows institutions to tailor experiences, address local regulation, and create sustainable financial ecosystems that scale in tandem with the communities they serve.
Modular platforms are more than a technical enhancement; they are a mindset change in favor of agility, user-centricity, and durable resilience. The future of digital banking in Africa will be determined by those who construct with purpose, evolve at speed, and collaborate with technology partners who grasp both the potential and the pitfalls that lie ahead.
From embedded finance to AI-driven credit decision-making and green financial instruments, the possibilities are endless—but only for those with the proper foundation. Modular infrastructure has moved beyond the realm of a luxury; it has become the necessary cornerstone of success on a continent where innovation is quickly surpassing legacy systems. The fintechs and banks that embrace this change today will define the finance world of tomorrow!
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