Presented by Monocle

Experts show cautious optimism for local banking sector at Beyond Banking Conference

 ·19 Jul 2023

Leading thinkers from South Africa’s financial services industry gathered at the Gordon Institute of Business Science (GIBS) on the 5th of July 2023 for the GIBS/Monocle Beyond Banking Conference.

Moderated by renowned business journalist Michael Avery, a line-up of high-level speakers engaged in a day of panel discussions focused on the dominant forces shaping banking at present.

Outlining the unique challenges that face the local banking industry, while also illuminating some of the opportunities for growth that these hurdles present, the speakers sketched a picture of cautious optimism for the future of South African banking.

SARB deputy governor Kuben Naidoo opened the conference with an insightful address, using a medical metaphor to describe three categories of risk that banks face.

“Back pain risks” refer to manageable threats such as global inflation, “heart attack risks” are sudden-onset risks such as cyber-attacks, and “cancer risks” are slow-moving changes that, if left unaddressed, threaten to destabilise not only a single institution, but the entire banking system.

Highlighting the well-regulated nature of the South African financial industry, Naidoo noted that institutions are prepared to manage the first two risks but warned that cancer risks such as low economic growth, high unemployment, a banking culture of risk-taking, a deteriorating fiscal position, and skills constraints require attention.

Much as in the case of cancer, he stressed that early detection and monitoring are the only ways to mitigate the potentially deleterious outcomes of these threats.

The first panel discussion saw Arrie Rautenbach, ABSA Group CEO, Margaret Nienaber, Standard Bank Group COO, and David Buckham, Monocle CEO, providing their thoughts on what would become two significant recurring themes: South Africa’s energy crisis and the country’s greylisting.

The speakers emphasised the need for collaboration between banks, government, and private businesses to address energy instability, a position that was echoed by Intellidex’s Peter Attard Montalto, who suggested that with careful planning, financial institutions can manage this risk while also supporting the uptake of renewables.

Revisiting this topic, Deslin Naidoo from GIBS’s Responsible Finance Initiative, Sasha Cook and Arvana Singh, Sustainable Finance Heads from Standard Bank and Nedbank, focused on the role of financial institutions in driving sustainable development throughout Africa.

Regarding South Africa’s greylisting, the overriding sentiment was that failure to resolve the shortcomings identified by the Financial Action Task Force is simply not an option, though doing so will require co-operation between the financial sector and government.

The Financial Sector Conduct Authority’s Eugene du Toit and the Financial Intelligence Centre’s Christopher Malan discussed this issue with reference to the growing role of technological innovation in banking.

While open banking, Fintechs, and cryptocurrencies present opportunities for positive development, they also introduce new risks that a robust regulatory environment must guard against.

The only way for South Africa to address its greylisting, Malan stressed, is to synchronise its activities in terms of technological innovation, regulation, and law enforcement.

Financial technologies featured prominently in the afternoon sessions, with Discovery’s Akash Dowra discussing the advantages of gaining a deep data-centric understanding of clients, while TymeBank CEO Coen Jonker and Luisa Mazinter from Mesh.Trade and 42Markets Group provided insights on the role of technology in reducing customer costs in Africa.

BankservAfrica’s Mpho Sadiki, Nedbank’s Chipo Mushwana, MTN’s Bradwin Roper, and VALR’s Farzam Ehsani continued this theme, discussing the role of non-bank financial institutions, including FinTechs and Telecommunication businesses, in facilitating real-time payments.

As a leading consulting firm that specialises in financial services, Monocle was exceptionally proud to sponsor the GIBS/Monocle Beyond Banking Conference, and look forward to the event becoming an annual highlight in the banking industry’s calendar.

The conference provided an invaluable space for attendees to engage in candid conversations with some of the most influential voices in South African banking, and for sharing ideas as the industry charts a way forward.

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