African insurers are emerging as the fastest climbers in the continent’s digital transformation race, even as fintechs maintain their lead, signalling a decisive shift in Africa’s financial services sector from rapid growth to operational efficiency and profitability.
According to the African Financial Industry Report released by Deloitte in collaboration with the Africa Financial Summit (AFIS), insurance companies recorded the strongest year-on-year gains in digital maturity in 2025, sharply narrowing the gap with fintech firms that have traditionally dominated Africa’s digital finance narrative.
The report, based on interviews with senior executives from over 70 financial institutions across Africa, reveals that 54% of institutions now consider themselves digitally mature, up from 48% in 2024, reflecting a sector-wide move beyond experimentation into disciplined, infrastructure-led digital transformation.
Insurers Record the Biggest Leap
While fintechs remain the most digitally advanced players — with 67% classified as digital leaders — insurers posted the most dramatic progress. About 59% of insurance firms now occupy advanced digital positions, including 12% in the leaders category, marking a 19-percentage-point jump from 2024.
This acceleration reflects insurers’ growing push to modernise legacy systems, improve underwriting and claims efficiency, and extend coverage to underserved markets using digital channels — an area historically dominated by fintechs.
Banks, meanwhile, showed a more uneven transition. Only 45% of banks classified themselves as digitally advanced, while 35% ranked as followers, up sharply from 15% in 2024, highlighting disparities driven by capital intensity and infrastructure costs.
In Nigeria, this divide is evident in spending patterns. Six major banks, including GTCO, Zenith, and UBA, invested ₦268.7 billion ($171.5 million) in technology infrastructure in 2024 — a 74.5% increase from the previous year — underscoring the rising cost of staying competitive in a digitally driven market.
From Growth-at-All-Costs to Sustainability
The report shows Africa’s financial sector entering a more sober phase. As funding tightens and risks mount, institutions are prioritising efficiency, compliance, and resilience over rapid expansion.
This shift mirrors broader changes across Africa’s fintech ecosystem. Fintech funding fell sharply from $863 million in H1 2023 to about $185 million in H1 2024, as investors increasingly demand profitability and operational discipline.
At the same time, rising digital fraud has exposed the vulnerabilities of scale. Nigeria’s Inter-Bank Settlement System (NIBSS) reported ₦52.26 billion ($38.3 million) lost to fraud in 2024, much of it through digital channels, reinforcing the need for stronger controls.
AI, Cybersecurity Take Centre Stage
Digital maturity is increasingly being defined by how institutions manage risk rather than how quickly they launch new products. About 81% of executives cited digital transformation as critical to improving financial performance and customer experience, though the focus is now on strengthening existing systems.
Artificial intelligence is central to this shift. 77% of respondents identified fraud detection as AI’s most impactful use case, followed by operational optimisation (70%), personalised financial products (72%), and chatbots (68%). However, most AI deployments are aimed at enhancing existing processes, not reinventing business models.
Cybersecurity remains the sector’s most pressing concern. 51% of respondents ranked it as their top risk, up from 39% in 2024, while 58% reported high or very high exposure to cyber threats.
Regulators Tighten Oversight as Confidence Rises
Rising risks are driving regulatory tightening across Africa. Nigeria’s central bank has strengthened cybersecurity and risk management requirements, while Kenya and Ghana have expanded digital identity and e-KYC frameworks to improve traceability. Updated fintech licensing and anti–money laundering guidelines are also being rolled out to align with global standards as cross-border digital payments grow.
Despite these pressures, confidence in the sector remains strong. Executives rated their organisations’ three-year economic outlook at 8 out of 10 in 2025, with 74% expressing optimism, supported by easing inflation and improved operational visibility.
Fintechs, however, are recalibrating expectations. Their outlook score dipped to 8.33, down from 9.25 in 2024, reflecting the transition from rapid expansion to proving long-term economic viability.
As Ambroise Depouilly, Managing Partner at Deloitte Francophone Africa, put it:
“The African financial sector has entered a phase of maturity. Confidence is high, fundamentals are strengthening, and continental integration is becoming a reality.”
For Africa’s digital finance ecosystem, the message is clear: leadership is no longer just about speed — it’s about resilience, discipline, and the ability to scale safely.
