The South African banking sector is increasingly moving towards a ‘marketplace without boundaries’, shaped by the fast-approaching entry of new digital players challenging the status quo and driving unprecedented levels of innovation.
In response, the four universal banks (Absa, FirstRand, Nedbank, and Standard Bank) have continued to pursue large-scale transformation programmes aimed at improving customer experience, digital transformation, new ways-of-working and enterprise-wide cost reduction. Globally, not all digital banks have delivered on the high expectations raised at their launch. However, those able to develop a clear segmentation model and differentiate themselves have achieved success in some of the most competitive banking markets across the world. They have deployed an agile development approach and established a business model based on monetising customer insights through carefully built communities. We believe digital entrants in South Africa will use this recipe to achieve the same impact in the local banking sector.
The four universal banks are not powerless to address the challenge posed by these new entrants. Unlike their challengers, they have the principal advantage of already serving a sizeable share of the country’s retail and commercial customers. To maintain this advantage, and meet the challenge posed by fast-paced entrants, the four universal banks will need to develop clear innovation strategies and operating models. They will also need to embed a culture that supports agility and measured risk-taking.
The future of banking in South Africa is dynamic and exciting. Agile new entrants with a differentiated value proposition and a business model focused on the monetisation of customer insights will compete head-on with universal banks reinvigorated by new innovation strategies. Not all banks will succeed in this new environment, but those quickest to adapt will benefit and capture a disproportionate share of the future banking market.
A perspective on how the South African banking sector is increasingly moving towards a ‘marketplace without boundaries’, shaped by the fast-approaching entry of new digital players challenging the status quo and driving unprecedented levels of ...
© 2010 - Fri Oct 18 19:22:58 UTC 2019 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.