An overview of the main topics to surface at The Network Forum Africa, London, April 7th & 8th 2025
Just as President Trump’s trade tariffs (later partially rescinded) were sending markets into tailspin, Industry Leaders were gathering in London for The Network Forum’s (TNF) Africa Meeting.
One of the key themes to emerge from this year’s TNF Africa was that as markets become increasingly unpredictable, Financial Institutions and Regulators need to focus more on getting the basics right, as Helen Johnson, COO and Head of Business Development, MYRIAD Group Technologies Limited (MGTL) explains.
Capital markets reform – slow and steady wins the race.
Together with having an enticing growth story, ease of market access and robust capital markets are fundamental pre-requisites for attracting inward investment.
Despite the recent volatility, Africa is making progress on all three fronts.
Macro reforms are starting to pay dividends in Egypt where investors are slowly re-entering the country again. Following a succession of crises, Egypt’s economy is projected to grow by 4% this year [1], while the country has also pursued extensive market reforms, including ending state subsidies for certain goods and services and shifting to a flexible exchange rate.
In Nigeria, a country blighted by capital controls, FX repatriation is now possible again following government intervention, which has prompted some foreign institutions to return.
Other impressive reforms shaping Africa’s capital markets, include the development of regional Stock Exchange linkages, automation of post-trade processes, increased Swift connectivity and the adoption of T+2. African markets seem to have resisted the temptation to bypass T+2 in favour of going straight to T+1 from T+3, a decision fully supported by Investors and Intermediaries alike.
Although a handful of Speakers said growth in Africa would be accelerated if Governments clubbed together and created a single, homogenous African currency and Stock Exchange, the region’s cautious approach to reform and its quiet determination to get the basics right does seem to be yielding excellent results.
Get cyber and data in order before pressing ahead with AI.
While innovation should not be discouraged, Firms must ensure they have strong digital foundations in place before embarking on ambitious change programmes involving Artificial Intelligence (AI) or any other disruptive technology, e.g. Blockchain, Tokenisation.
Speaking on a panel – ‘Due Diligence Evolution in Africa’ at TNF Africa, Simon Shepherd, Managing Director at MGTL, stressed that Firms need to prioritise their data management and cyber-security ahead of making any big investments into AI. Without structured data, Firms will not be able to make good use of AI, while they also risk opening up new cyber-attack vectors if they develop AI capabilities when their cyber-hygiene is poor.
I found that a lot of Providers at TNF Africa appear to be on message here.
One of the local Central Securities Depositories (CSD) told TNF that nearly all of their technology budget nowadays is earmarked for cyber-security.
With cyber attackers becoming increasingly sophisticated, e.g. due to innovations in ransomware, leveraging AI to scale up attacks, etc., Custodians and Financial Market Infrastructures (FMIs) are constantly having to release new security patches to fix vulnerabilities.
To deliver on digitalisation, Firms cannot compromise on their data management or cyber-security.
Due Diligence – keeping it simple.
The pros and cons of incorporating AI into Network Management were discussed at length during TNF Africa.
While some Experts at TNF Africa believe AI is well positioned to help streamline certain aspects of due diligence, e.g., summarising large documents and datasets, Simon said that existing software can do a lot of this work already.
For instance, Simon pointed out that off-the-shelf delta management solutions are more than capable of enabling Network Managers to compare and contrast different AFME DDQs.
One Network Manager also questioned the intrinsic value of using AI to benchmark AFME DDQs, noting that a lot of the content in the Questionnaire, e.g., Legal Entity Identifiers (LEIs) is static data, and that content is effectively historical once it is published. More focus is needed performing continuous real time risk assessments.
Another Network Manager said AI could be used to flag inconsistencies or erroneous trends during due diligence assessments, but a human in the loop would still be needed to make judgement calls on whether issues require further escalation.
Agent Banks, who may be tempted to use ChatGPT to fill out DDQs, were told by a Network Manager at TNF Africa that they will be subject to additional scrutiny if they do.
Unlike a human, AI might not be able to properly capture the nuances of the information it is ingesting. If AI is used to populate a DDQ, the Network Manager said they would want to know how the AI is trained by the Agent Bank and seek assurances that any AI-generated answers have been verified by humans.
For a technology that purportedly promises to increase workplace productivity, Generative AI could actually end up doing the opposite in this case.
Overall, Speakers do not seem to think AI will be replacing Network Managers anytime soon.
The technology has other flaws too.
At a time when Custodians and Brokers are dealing with significant revenue and margin pressure, the economics of deploying AI does not always make sense, highlighted Simon.
This is because the actual process of training and continuously retraining AI models is an additional cost burden for Organisations. This comes as an IBM report revealed the average cost of computing is projected to increase by a staggering 89% between 2023 and 2025, mostly driven by the growing adoption of Generative AI. [2]
Using Generative AI is hugely energy intensive. Asking ChatGPT a question, for example, consumes x10 more electricity than a simple Google search, continued Simon.
Just as Banks and FMIs have abandoned or paused their various Blockchain or Asset Tokenisation initiatives, a similar trend is beginning to emerge with AI. When ChatGPT first emerged, Simon said one Provider identified 200 potential AI use cases, only to narrow that down to five live projects in 2023/4, before ultimately cancelling them all in 2025, citing the limited business case for adopting the technology, spiralling costs and concerns about hallucinations.
It is clear to me that Firms can save themselves a lot of time and effort by using existing technology to solve business challenges, instead of throwing AI at the problem.
Knowing your basics is key.
The starting point for any Financial Institution, whether they are entering a new market or asset class, is to make sure they have full oversight of their Counterparty relationships and Accounts, and with it, their exposures and risks.
This is something which MGTL can help support Customers with.
As markets become increasingly volatile and unpredictable, I believe it is essential that Firms have the right infrastructure and technology systems in place to properly map their counterparty exposures.
[1] BNP Paribas Economic Research – February 11, 2025 – Egypt: The Egyptian economy remains vulnerable despite positive momentum
[2] IBM – The Hidden Costs of AI: How Generative models are reshaping corporate budgets
