Building a Long-Term Payment Infrastructure in Africa That Removes Currency Friction and Accelerates Economic Growth with Elizabeth Rossiello

[00:00:00] You're listening to the Unlocking Africa podcast. Welcome to the Unlocking Africa podcast where we find inspirational people, who are going to be able to help us build a better future for all of us. And we're going to be talking about the challenges that we face.

[00:00:45] And we're going to be talking about the challenges that we face. And we're going to be talking about the challenges that we face. Welcome to the Unlocking Africa podcast where we find inspirational people who are doing inspirational things to unlock Africa's economic potential.

[00:01:05] Today we have another special guest, we have Elizabeth Rossi-Ello, who is the CEO and founder of AZA Finance, which is an established provider of currency trading solutions that accelerate global access to frontier markets through innovative infrastructure. Welcome, welcome, welcome to the podcast Elizabeth. How are you?

[00:01:27] Great, thank you for having me. It's a pleasure to have you on the podcast. Interestingly enough, you've been on my list of guests that I've been wanting on my podcast for quite a while, so looking forward to today's conversation. Oh wow, thank you. Such kind words.

[00:01:42] Not sure if you've listened to the podcast before, but I'd like to start off in the beginning. So I was hoping you could introduce yourself and tell us a little bit more about Elizabeth Rossi-Ello. Great, well I am a New Yorker who has spent the last 22 years abroad

[00:01:59] and I left New York to first go into banking in Europe right before the big banking crash and I was very disillusioned with what I saw. And so I followed Mr. Muhammad Yunus, who had just won the Nobel Peace Prize,

[00:02:15] down to Nairobi, Kenya with one of the projects he had been working on to work in microfinance. And I spent five years doing that in Nairobi, Kenya and it was right when the mobile money boom was happening.

[00:02:27] And I got very interested in how that was affecting the continent and I worked on a few projects about that before starting my own business in 2013. And I started the company when I had two small children, one and two years old.

[00:02:44] And I had a third child halfway through. So I am a bit unusual as a working mom fintech founder and a bit unusual as the founder of an African fintech that is not African. So, you know, I'm used to being a bit of a stranger everywhere I go,

[00:03:03] but maybe that helps because founders are usually strange people. Thank you for sharing that Elizabeth. So as you mentioned, you're a New Yorker, spent five years in Nairobi during the mobile finance boom.

[00:03:18] So during that time in Nairobi, what was it specifically that inspired you to start as a finance? So I actually did Nairobi eight years, but five before I started the company. And I think I couldn't believe the disparity when I visited small financial companies

[00:03:38] and small financial institutions with those that were using mobile money and those that weren't. And not to sound nerdy, but it's not just the actual product, the front end product of the mobile money,

[00:03:51] but it's the way that you can just simply with a click download all your data digitally. Other institutions were still collecting client transactions, multiple systems. They were actually passing around CD-ROMs. Can you believe that? Remember those from branch to branch,

[00:04:09] some were arriving a week late and they couldn't reconcile. It was this huge waterfall effect. And when everything just becomes digitized, it was such a game changer. So, you know, I always hear people use the term leapfrogging, you know, mobile telephone.

[00:04:25] But I think any time we digitize or any time we have a step change in digitization, you suddenly are able to go further. And in this way, in these areas, these very fast growing economies with a lot of people that were spread across big geographies.

[00:04:41] And we didn't always have great transport in some of these places like rural Tanzania where I was working or rural Kenya or Malawi or Nigeria. It was really interesting because suddenly the service quality you could provide people in all these different areas was improved.

[00:04:57] So I was very interested in that kind of digitization. But what I was really surprised at was how everything was so closed loop. It's like, wow, it works so great if you're in Disneyland.

[00:05:09] And the second you step out of wherever that mobile money company reach was even into the same country, but the neighboring telco, you had none of the same effect. So it was like in the sunlight or in the shade.

[00:05:21] And I was like, how do we connect these two? How do we? The keyword at the time was interoperability. But even that was like overused. That was like the block chain of the time. And so I was like, well, what have we had?

[00:05:37] What we have everywhere else in finance, market makers, brokers, the middle market. That's what I thought was needed. And so kind of started the company building around that idea.

[00:05:47] Brilliant. So as you mentioned, when you first started, you couldn't understand the disparity between those that use mobile money against those that don't. In terms of the payments infrastructure, how has that evolved in Africa since the early days of 2013 when you launched as a finance?

[00:06:05] And as it was launched in 2007, we call that like the birth year of mobile money in Africa. And I arrived in 2009 and then we started the company in 2013.

[00:06:13] So yeah, I mean, I think a very general way of describing it is out of the 55 African markets, some have become very mobile money and some have become very bank led. And there's a whole lot you can say about why each has happened.

[00:06:29] One of the great use cases in Nigeria where you had a really high functioning central bank switch and you had a private bank switch, inter switch, which launched a decade ago even more. And was one of the first African fintech champs and a great company at the time.

[00:06:51] And in those markets, mobile money never really had a chance because the switch works so well. So people could just get small values in their bank account and it was low cost and great service.

[00:07:02] I think in places where you don't have that great banking offering for low value or small value, people went to mobile money. Other places like Rikafone West Africa, you had very powerful cash agent networks such as Wari, which is in Senegal and the Frank Safa zone.

[00:07:19] And those dominated for a long time and those markets are now a little slower to come online and the bank switch is not there. So we've had some mobile money giants come in like wave.

[00:07:30] During this period in terms of the evolution of the infrastructure, what role do you believe as a finance has played in driving this evolution, no matter how small or big that has been?

[00:07:41] Yeah, I mean literally right before this interview, I was drawing out a fun flow map for one of our partners. We still have the big dirty secret in payments is that corporate payments, BB payments, settlement between counterparties, settlement between companies is not real time.

[00:07:59] And we have a lot of reasons why that is. So now I think what we do is we help solve for that by connecting into all the different players and acting as a counterparty in the middle.

[00:08:12] And I think the market went overboard early days where they had lots of layers and there were lots of steps on the vertical. And now we're seeing companies like Adva condense those steps and be the closest one.

[00:08:27] And I think that's what we've tried to do from the beginning. We've tried to be the most efficient, most customer service driven market maker and counterparty to trade across all these markets and all these different local infrastructure.

[00:08:41] Fantastic. I think you hit a key point there in terms of payments has not been real time and trying to condense the steps. So during this period or process, what has been your approach to refining or innovating the technology that you use? Is that something that's ongoing continuously?

[00:09:01] Oh yeah, I mean we're agile led and we have a great engineering team led by our CTO and some team engineers. And we have an incredible product team that really knows the sector and the region, our counterparties.

[00:09:13] And we just always have very high goals for ourselves where we want no downtime, extreme service delivery, no error rates. And we want to be able to provide reporting to clients and we want to be able to add features to clients.

[00:09:31] And so we're constantly not only keeping up with anything that we see in the market, but forging forward and introducing quite a lot of new features.

[00:09:39] And I'm quite proud to say that I think we have introduced a lot of new features to this part of the market and we are known for our service quality. And that means never stop innovating.

[00:09:50] And again, going back to the beginning of in the center and the shade, I think if you want to stay in the sun, you have to keep driving forward and just this constant quest for efficiency.

[00:10:01] What have been some of the challenges that you face in achieving these goals and targets that you set yourself? I mean it's very hard in frontier markets to be exact about timelines.

[00:10:12] So what we often do is we'll have two projects going at the same time knowing one might hit a roadblock. But if we were to just have one going on and just all your eggs in one basket, it's just not the way to operate in emerging markets.

[00:10:27] Now the risk then is that you have too many baskets going. So it's taken us 10 years to know how much to do at once so that we always have something that hits the target and succeed. But we're not burning out or we're not spreading ourselves too thin.

[00:10:44] I laugh when I see some of these new startups and they're like, I'll be in 12 markets in one quarter. And I was like, I hope you've proved me wrong. But that's not the way or others who are five years and only in one market.

[00:10:57] So we really try to strike that middle point in understanding the restrictions of our market and how there is a lot that we can't control and then making sure that things that we can control are on track.

[00:11:08] I guess a common challenge in your space is probably navigating the diverse regulatory landscape. So how have you managed to achieve this and have the presence in the 20 African markets? Yeah, I mean, it's everybody's challenge.

[00:11:25] My best friend works at Apple and like metals recycling or something and she does policy and she has been she was just telling me yesterday she memorizes all the policies for the different continents and countries. So regulatory and policy diversification across markets is everybody's challenge in business.

[00:11:40] I think it's just what we have to deal with today. And like anything else, we have a lot of expertise. We've been doing this 10 years more. So we have a team that works on it. What are the new policies coming up? Can we lobby? Can we influence?

[00:11:53] If not, how do we get alignment? What are the options for the different kinds of licenses? Do we want one? Do we want multiple? Do we want a partner?

[00:12:01] I think just approaching each challenge with an open, agile mind and understanding it's not going to be the same fit everywhere. So I think if I could say one generalism, it's always customized and different per market. And even if you think, you know, what is the data show?

[00:12:18] What does the market say? How would you approach it? What's the cost benefit? I think when you see leaders or you see teams come in and just kind of force solutions places, it's the time they're not going to succeed, especially in these kind of markets.

[00:12:31] I know you guys do prioritize compliance and regulation. So I was hoping you could elaborate on the importance of investing in a knowledgeable and scalable team to manage your regulatory approach. You know, it's funny because like we'll have a client come to us and they said, what?

[00:12:48] You asked so many questions when we onboard or you're requiring so many documents. This other person in the market asked me no question and we're like, oh my god, I'm going to go out of business. Or like they only asked me one document and you've asked me for 10.

[00:13:03] You know, I ask the minimum possible with still making sure I stay in business for another 10 to 20 years. Right. So, you know, we want the best customer experience that we want to stay in business.

[00:13:15] And the reason you have to invest in this is not just because of your own risk, but you're connected in financial systems. You're connected to counterparties, to other clients, to banks, to different markets, to regulatory reporting.

[00:13:29] If you make a decision at the start of a chain and you decide to not check something and to let a transaction or a client go through, that then will infect the rest of the chain.

[00:13:40] You're not putting just your business at risk. You're putting all your counterparties and partners at risk. And very quickly, they'll come back to you. I mean, EDD, advanced enhanced ediligence is a real thing. Someone on the chain goes, beep, we've had an alert. Send me the EDD document.

[00:13:57] And if you don't produce them instantly and you don't have those at the ready and you haven't asked your client for those, They'll cut you off and you'll get a better reputation eventually.

[00:14:06] And some very big names in African fintech and other fintech have had that experience and are known as, you know, persona non grata for that very reason. Makes it harder for them to get new partners. It makes it harder for them to get banked.

[00:14:20] And it makes the cost of compliance fines and things like that very high. So I think for us, it's a real value decision to make sure that we do the right thing and at the same time,

[00:14:34] keep in mind customer experience, but make sure that everybody in our chain and our network has themselves protected. Interesting, interesting.

[00:14:43] So I guess what you've kind of touched on this in terms of how compliance and regulation creates or contributes to creating a lasting and sustainable infrastructure within the fintech space. I mean, a lot of people have said to me over the years, African clients can't be compliant.

[00:15:02] Say that again. It's impossible to KYC African corporates. Oh, can you possibly let these clients on? I mean, let's not go into all the deep seated wrongness with statements like that. Or are they all Nigerian princes? And I'm just like dead staring at whoever asked me that.

[00:15:23] Like, did you really just say that? You know, I mean, just last week someone made a joke like that and I'm like, still today. You know, so I think it's been a mission of ours, a passion and a mission to say these clients are compliant.

[00:15:37] And just like anywhere else in North America or Europe or Asia, you don't accept everybody that comes through the door. You have standards. But if you have standards and you apply them and the customers are meeting them, that means your customers are compliant.

[00:15:53] So if it's the same standards that are those in Europe and the UK, and we are licensed in the UK, we're licensed in Europe by the Bank of Spain. We apply our global standards to all of our clients everywhere.

[00:16:06] So we love to share how many clients have passed our compliance and how many clients treat with us compliantly. And this idea that you have to lower your standards when you go into French markets is just baloney. I agree. I agree.

[00:16:19] It could be said that compliance and I guess collaboration with governments and regulatory bodies go hand in hand. So how does that relationship work as a finance in terms of how you work with governments and regulatory bodies to improve your offering and expanding your service?

[00:16:37] You can't do the volumes that we do without talking to the regulator and talking to regulated financial institutions. So if you have our volume size now at scale and we have five, six, seven sometimes banking partners in every market, we're in a constant dialogue.

[00:16:53] You know, is this OK? Is this flow OK? Do you like these volumes? What the reporting is to the regulator?

[00:16:59] Do we need to upgrade our license? So we are in constant dialogue often as a fintech and as a pioneer in this space as would enter a market when regulation was developing. And that is tough because you might need to change your model as regulation develops.

[00:17:14] What's been interesting is we just launched Egypt in January, and that was the first place where we didn't transact a dollar until we had license approval. And I think, you know, that's a very slow way for a fintech to enter a market.

[00:17:30] But we're trying everything. And I think you have to keep your ear to the ground. You have to keep relationships open and you definitely can't just like blaze in and ignore anybody. I think finance learned that lesson.

[00:17:42] So you mentioned your volume size. What is your current volume size and where does that stack or rank amongst other fintechs? Well, we did a couple of million last year, almost three billion, and we hope to go towards five billion this year.

[00:17:56] So we're quite excited at our growth. Brilliant, brilliant, brilliant. So I guess as you continue to grow, what are some key areas of focus for the company's expansion? So we are hoping to go into one major new market every few quarters.

[00:18:13] We've been to a bunch of smaller markets like Zambia, also in Q1 alongside Egypt, which is going really well. But I think for us, the next giant is Ethiopia. And so we're quite excited about that.

[00:18:26] I like the sound of that. Is there a specific reason why there's a focus on Ethiopia? Obviously you don't have to give me any inside truth. Well, just size, right? I mean, the giants of the continent.

[00:18:37] So are the other markets on your radar on your list? I think you mentioned Egypt, North Africa. Is that a region that you're focusing on in the near future? Yeah, I mean, we're really excited to see how Egypt goes. We have a lot of demand there.

[00:18:55] I think, you know, we've been in Morocco for some time now. There's a lot of deep connections between European banks and North African banks already. So it's somewhat saturated some of these markets.

[00:19:06] But I think for sure, Central Africa and Southern Africa, we have a lot more room to grow. With expanding to new markets, I guess it's safe to say that there is a requirement to attract key talent for a successful expansion into that market.

[00:19:22] So how important has it been for you to address some of the talent challenges within the payment space, particularly in terms of attracting and retaining top talent to grow? We don't really have a problem with this.

[00:19:37] I mean, we have one of the highest retention rates where I think we're over like 98% retention. So people like to work with our team and we're really proud of the team culture that we have where we just got shortlisted for best places to work.

[00:19:49] So, you know, that's something we obsess about because training, training good people, you know, working with good people, getting them to know what we do here is a big expense and a big time. And so we don't like to lose people who bring on.

[00:20:04] We are copying transfer wise and celebrating our boomerang people, which are the employees that go and come back. We've had a couple of those guys. That's my favorite to see. I'm like, I told you and also just like we value you to come back.

[00:20:18] You know, if you're good and you want to see what's out there, you have a personal reason you want to switch it up. Yeah, but you know, we always want the people back. We have no ego about it.

[00:20:27] I think that the real thing is operationally, how are you as a company? Are you chaotic? Are you respectful? Are you nurturing? Are you promoting? I mean, company culture is the key to success going forward.

[00:20:42] You know, so I think it shows in your retention rates and your ability to attract talent. But I keep bragging about my team on these podcasts. And then we have coaches come offering like double, triple salaries to get our team in.

[00:20:54] You know, so I mean, I think people love to hire our employees and it's flattering. It definitely is flattering. Yeah, we have seven offices across Africa and we try to keep our team bundled around those offices.

[00:21:09] Even if we open new markets, we won't necessarily put an office in a new market right away. It really depends. We hope that team members go work in a nearby office and then only really build it up once we have a bigger team there.

[00:21:21] So what would you say specifically has been the key to your high retention rates? Respect. OK. We just really care about our team and, you know, we are really honest about it. We understand people's time is valuable. We don't call people at midnight and scream at them.

[00:21:39] You know, in general, we try not to. We have a no screaming rule. We have a no freak out rule and we have a lot of working parents in our company. And as you might know, working parents are pretty efficient.

[00:21:50] Other people are efficient as well, but working parents are efficient because you got a hard deadline every day. You know, you have to get home after the child care leaves or whatever the case may be or most days.

[00:22:00] So you got to get your stuff done, no faffing around. And so we really respect the time that we have at work and we respect the time that we have at home. And we understand people are humans and do that.

[00:22:11] And I think people feel valued and feel respected because of that. I mean, look, we're not perfect and we make mistakes all the time and we're trying to get better. But we try to own up to what we're doing and try to invest in our team.

[00:22:23] So as you've mentioned through the conversation, you are going through expansion and growth. So I guess keep it on the theme of culture within the company. How do you maintain the motivation, keeping people engaged whilst rapidly growing as well?

[00:22:41] I'm a big believer in team efficiency and automation and scaling. So I don't necessarily believe your team has to explode every time you have growth. I think that's actually, you know, organizations get too big, too quick and they become unmanageable.

[00:22:57] When I hear people have like 2000 person payrolls and I'm like, does your business model really warrant that? What else can you be doing more efficiently so that you don't need to have that? So that's number one. Keeping the team tight and athletic.

[00:23:11] If you want to run fast, you know, you need a right number of people. Sure, you need support. Sure, you need to not be understaffed. Like I said before, we don't overwork our team. But do you need to just bloat it up because you can?

[00:23:22] So I think we learned our lesson. Like one year we really hired 100 people and then we were like took a couple of years to grow into that.

[00:23:29] And, you know, we we hired too fast on some accounts and we got a little bit better at what we do there. So I think that's important. Brilliant, brilliant. Great advice.

[00:23:38] So across your seven sites, what would you say are the advantages of having a local team that understands the underground nuances in the markets that you operate? It's really important for some teams, obviously, like account management, less important for other teams like engineering.

[00:23:52] We do have engineering all over, but, you know, we hire where the talent is as opposed to, you know, you don't necessarily always need somebody in market. I think it really depends. You know, obviously regulation, legal.

[00:24:03] We have people everywhere. I think that we have seven sites in Africa and two in Europe and the UK. So I think it just really needs space. So I guess the DROFA is probably one specific milestone that you've achieved.

[00:24:17] So outside of that, what would you say are some of the key milestones that you're proud of in terms of the achievements of as a finance since its inception in 2013?

[00:24:27] Well, I think a big problem with a lot of fintechs is, you know, size, reputation and, you know, weight when you come to clients and you go up against banks who have been there 100 years. The fact that we hit the 10 year mark is a really big deal.

[00:24:41] Not a lot of fintechs get that far. I don't know what the drop off rate is these days, but you know, we lose a lot of our brothers and sisters, you know, right after series A pre-feed and a whole other chunk goes off by series B, series C.

[00:24:54] So the fact that we're still there shows that we have heft, we have seriousness, we have policies that are working well, the regulator likes us, you know, so that kind of just years under our belt really was a big deal for us. And we celebrated a lot internally.

[00:25:09] So you've mentioned that you, one of the key milestones that you're proud of is that you hit the 10 year mark. I guess during those 10 years, you've seen many trends come and go.

[00:25:19] But what are some of the current trends that you're seeing in terms of the exchange payments settlement space that you're currently excited about? Well, I'm excited to see international players come into the market.

[00:25:33] I mean, a couple of years ago, people were like, Africa, blah, blah, it's not for us or maybe two years away for us. Now people are posting like huge results that they've had on the continent and like Africa is the future.

[00:25:46] And I'm like, wow, welcome to the party. So I think like recognition of the region has been awesome.

[00:25:52] And even though there were a lot of fintech, you know, dead bodies along the way and a lot of investors lost money on some fintechs that have really not done well. I think the fact that the global companies are still coming in is great news.

[00:26:07] Fantastic. So if we move from current trends and look at the future, the future of Africa, where do you see Africa say in the next five years time with regards to the ease of moving money across all major markets and also globally?

[00:26:22] I think it's just going to get better and better. I mean, I think we have still a lot of markets that are PEG grades, a lot of exchange controls. We're going to see a lot of that loosen up, you know, not go away, but loosen up.

[00:26:34] Egypt just like is playing with letting go of its PEG. So I think that's going to only bring more business into these markets. Fantastic. And if we look closer to home, where do you see yourself as a finance in five years time?

[00:26:45] What role will you be playing in the ecosystem? Well, I still see ourselves as the largest non-bank broker and I think we're just going to grow and grow and grow. And we have not only population growth, but we have GDP growth. We have digitization happening.

[00:27:00] I mean, there's so many drivers of growth on the continent. I just feel like we were in the right place and we've been here a long time. One of the few that are still here and still going and still growing. So really the markets there for the taking.

[00:27:14] Brilliant. And I look forward to seeing what you achieve in the next five years time. Quote of the week. As people, we often have quotes, mantras, African proverbs or affirmations that keep us going. When times are challenging or when times are good.

[00:27:27] Do you have one that you can share with us today? I love to say to my team, she with the most liquidity wins. And I think that is like in B2B space, you have this like winner takes all mentality where it's really hard when you're starting out.

[00:27:46] It's really hard when you're small. It's really hard when you're growing. But as soon as you get your head above the fence and you get to that next level, you can grow in leaps and bounds. So don't get discouraged at the early steps.

[00:28:00] But if you can make it there, it's you know, there's so much more you can do once you get up there. And that's what we're feeling right now in our growth stage. So I think it really is an encouraging thing about how we do it.

[00:28:11] Fantastic. Thank you for sharing that, Elizabeth. I love that you've shared a quote that you use as specific to yourself. Brilliant. So as we've come to the end of today's conversation,

[00:28:24] I was wondering, do you have any closing remarks, final call to action for people who are listening, who are just interested in what you're doing as a finance? Yeah, I mean, building a business and a venture market is so hard,

[00:28:38] but it's also just really rewarding because you can change the things you don't like elsewhere. And, you know, a lot of people say I want to come into this place and make change. And that's very difficult to do.

[00:28:52] But I think if you carve out a little space and you work on that and you exemplify the way you want to run a business or the way you want to serve your clients, not just us that's making change, we've seen a ripple effect.

[00:29:03] We've seen old employees start other companies. We've seen a constellation effect. And that's been quite exciting. And I think having an ambitious but attainable goal and then building from there.

[00:29:15] And if you're doing the right thing and you care about what you do, you will see a wider change in the market. Thank you for that, Elizabeth. It's been an awesome conversation. I think we've covered everything from the dynamics of navigating regulatory frameworks, embracing market volatility, developing talent.

[00:29:33] So, yeah, well done to you and your team. I'm looking forward to seeing how things progress as a finance in the future. Thank you so much. All the best. Thank you to everyone who has listened and stay tuned to the podcast.

[00:29:47] If you've enjoyed this episode, please subscribe, share or tell a friend about it. You can also rate review us in Apple Podcasts or wherever you download your podcast. Thank you and see you next week for the Unlocking Africa podcast.