Transforming the South African banking landscape: Eight emerging trends

At EY we believe there are eight megatrends will reshape the SA and African banking sector, compelling them to reassess business models and adapt to new realities.
These trends have global implications but are influenced by local nuances. Banks must confront these challenges to survive, as transformation becomes crucial.
Understanding these trends and finding solutions will be essential for banks to thrive in an evolving society.
Innovate for what’s now, or innovate for what’s next?
In this two-part synopsis, we review the eight chapters in the insight series, beginning with:
1. Climate change and sustainability,
2. Modern challengers disrupting the traditional order,
3. The emergence of ecosystem-based thinking, and
4. The race for talent.
1. Solving the African banking sector’s climate change conundrum.
Banks play a vital role in mobilising capital for ESG initiatives, connecting funds with projects and addressing sustainability issues.
However, they face challenges in balancing sustainability imperatives with Africa’s reliance on natural resources and fossil fuels. What is the role of African banks in financing sustainable transitions?
What are their key considerations i.e., better data, clearer objectives, and the right mix of skills?
Banks need to more aggressively aligning their focus, manage transition risks, and support sustainable development to navigate African markets effectively.
2. Traditional banks ready themselves to ride the digital wave.
Traditional banks face the challenge of adapting to digital transformation and meeting evolving customer expectations.
Due to their agility, modern banks and fintech companies with cloud-based infrastructure and advanced technologies pose a significant threat to incumbent banks.
Legacy systems, such as slow and complex new product introduction, manual processes and costly hardly that negatively impact the customer experience, hinder traditional banks’ ability to innovate and compete.
Transformation is going to require significant investment, a strategic shift, clear vision, and proactive engagement with regulators.
3. Ecosystem banking: How serving the greater good can be good for the bottom line.
By understanding their role and building relationships, banks can drive revenue and profitability. Few banks have got this right.
Ecosystem banking works to create opportunities for banks to offer value-added services within collaborative groups.
Ecosystem thinking calls for aligning investments with sustainability goals and promoting financial inclusion, and importantly, collaboration with fintech companies expands innovative solutions and customer base.
4. The race for talent.
The competition for talent is rapidly reshaping the banking industry, as banks must attract and retain the best talent to remain competitive.
Mapping required skills, including software developers, data engineers, and agile practitioners, is crucial for successful transformation.
Collaboration between leadership and HR, operations, and technology officers is necessary to determine the best approach, whether through reskilling, recruitment, or external specialists.
Adopting of alternate recruitment approaches is key, as is the nurturing of organisational culture while fostering diversity and inclusion within the organisation.
Read Part 2 of the synopsis tomorrow where we review the last four chapters of the series.
Click here to download a PDF of the full series .
This EY insight series is authored by Marius Van den Berg, EY Africa, Africa Banking and Capital Markets Advisory Leader; Gail Moshoeshoe; EY Africa Financial Services Partner; Clemence McNulty, EY Africa Climate Change and Sustainability Services Leader; Brian Wilson, EY Africa Core Banking and Temenos Alliance Leader; Sean Berrington, EY Africa Technology Partner; Kavi Pather, EY Africa Advanced Analytics and AI Leader; Michelle Kotze, EY Africa People Advisory Services Leader; Natasha Diakides, EY Africa Learning and Development Leader and Claude Joshua, Business Payments Engineer, EY Consulting.