South Africa’s banks are in desperate need of tech skills – and the country is not producing these skill sets at a fast enough rate.
But instead of looking beyond the country’s borders, local finance groups are building the skills they need from within – and hundreds of workers are benefiting.
One such group is African Bank, which says it is currently training hundreds of interns in the specific skill sets the bank needs – from technology to operations in its branch network.
Speaking to BusinessTech, the bank said that the need for skills is shared across all the major banking groups in the country, and it decided that up-skilling employees internally was the strategy it would pursue.
Chief executive officer (CEO) Basani Maluleke said that the bank currently has approximately 400 interns working across its branch network, most of whom will go on to work for the bank full-time.
On the tech side, chief information officer (CIO) Penny Futter noted that almost 10% of her team are also interns in training.
The skills which are most in-demand are in security and data science, the bank said.
The group has partnered with a data academy to train a team of data scientists, which the bank hopes will go on to form their own team within the group to focus on innovation in the fields of artificial intelligence and big data.
The drive for skills is not unique to African Bank. Speaking to Reuters in June, representatives from Absa, Standard Bank, Nedbank and FirstRand said that they were also struggling to access the skills they need to rapidly digitise, and deal with new mobile banking players.
The banks said they had taken a number of measures to address the shortage – including changing their hiring strategies and developing training programs – but said that it still took months to hire and they were paying ever-rising salaries to win talent.
Capitec, which has emerged as one of the fastest growing banking groups in the country, said that it has been targeting hires in the tech space – specifically those in machine learning, AI and digital.
African Bank growth
The drive for skills underpins African Bank’s growth strategy, which comes off the back of its push back into retail transactional banking earlier this year with the MyWORLD account.
Maluleke said that while the bank is staying true to its roots – servicing the under-serviced, particularly in the lower-end of the market – the group is expanding and growing with offerings more the middle market (specifically in the R5,000 to R40,000 income bracket).
This expansion is notable at a time when other banks are scaling down: closing branches, retrenching employees and looking for ways to streamline.
African Bank said it is in the prime position to grow – off a lower base, and without the weight of legacy tech systems pulling it down.
And with a cost-to-income ratio of 30% (compared to around 50% at the big banks), it also has the finances to execute the strategy, Maluleke said.
According to Futter, the bank offers a unique proposition with its systems, which is based on a ‘shared banking’ model where families or small communities can transact using one account. This type of model has not been implemented by any other banking group in the country, and speaks to the shared financial model used by many South Africans already.
However, group executive for digital and transactional banking, George Roussos noted that all the banks in South Africa were effectively all fighting over the same market.
The bank currently has over one million customers and operates through a branch network of 392 locations.