Banking Industry to Digitally Transform in 2021

South Africa’s Banking Industry to Digitally Transform, Innovate and Succeed:

The South African banking sector is increasingly moving towards digital transformation. New digital players are generating unprecedented levels of innovation and challenging the status quo. On the other hand, the four universal banks in South Africa (Absa, FirstRand, Nedbank, and Standard Bank) are implementing large-scale transformation programs to improve customer experience and digital transformation to automate business processes.

According to a PWC report, three main trends have emerged that will shape the local banking industry. Trends below

Low-cost digital solutions are introduced by neighboring financial operators

 There will be sectoral and sectoral non-financial institutions

Transform four universal banks (Absa, FirstRand, Nedbank, and Standard Bank) to respond to changing regulatory, customer, and technology needs.

The Reserve Bank of South Africa (SARB) encourages new digital operators to offer innovative digital banking solutions. In 2018, SARD partnered with the national banking community to assess the adoption of distributed ledger technology (DLT) and the modernization of payments through the Real-Time Settlement Renewal Project (RTGS). In addition, the SRDB made some encouraging comments about the creation of a regulatory sandbox designed to test new business models and solutions in a controlled regulatory environment.

Here are some tips for digital sellers who want to succeed in the South African markets

1. Properly conduct customer segmentation and differentiation

2. Quickly launch the minimum viable product (MVP) and test customer customization of a new feature or solution

3. Collect and analyze customer data and enable a wider gaming platform

4. Create an ad campaign about the product and reduce marketing costs

The number of mobile banking users in South Africa will reach 2 billion by 2020. Most banks and financial institutions implement mobile banking solutions with features such as payments, credit applications, credit checks, and expense tracking.

 With the use of digital banking software, redundant and repetitive activities will be eliminated in the future. Work will shift from repetitive roles to more strategic roles, requiring employees to think critically or demonstrate creative employee engagement, and automation will require employees to hone their skills to adapt to new roles.

Blockchain technology helps in various banking activities such as digital payments, loan processing, security to protect valuable information.

 Using advanced software and algorithms, artificial intelligence (AI) can track interest rates, credit scores, etc. Calculate. Banks and financial institutions get better information that helps them make better decisions.

Key benefits of digitization

• Elimination of fraud on trading platforms

• Help the financial institution get to know your customer (KYC)

• Faster and more optimized processes

• Advanced Security

• Greater efficiency

To remain competitive and provide the best customer experience, banks and financial institutions are automating their processes through innovative digital banking solutions. Some digital banking solutions include mobile banking, internet banking, loan management solutions, check-writing systems, and home banking.

 Agile competitors with a different business model focused on customer information will compete with universal banks driven by innovation strategies. The future of the banking sector in South Africa is very exciting and dynamic. Whoever benefits most from this digital movement can also benefit from market share in the future banking market.

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