“The lower end of the financial market in Africa is the main market. If we can serve it well, we can achieve a great deal,” Sim Tshabalala, Standard Bank chief executive, told Trevor Ncube from the In Conversation with Trevor Show, hosted recently at GIBS.
People’s expectations and demands shape the opportunities and challenges that banks face. As a result, banks are an inextricable part of society: They don’t shape society but, rather, are shaped by it.
He explained that most banking activities have gone online or moved to digital channels. “People demand convenience and the same levels of ease of transacting from financial services as they expect from Uber and Netflix. The implications for banking are profound.”
Tshabalala said that until recently, many thought telecommunications companies and big tech moving into the financial services space would decimate financial institutions. “Now, people are learning that entry into financial services demands large capabilities. Scale matters in financial services – you need sufficient digital skills and resources. Fortune favours the big battalions.”
“We have massive systems to enable Know Your Client (KYC) checks and cybercrime prevention. Banking licenses are very expensive, and the armies of risk managers are very expensive. Cyber security is very, very expensive. If you enter into deposit taking and payments, you need to invest. The conversation with these players has now shifted to partnerships.”
Another concern is that Vodacom or MTN could launch a fully-fledged bank “with their outstanding distribution capability. In the future, we will partner with some people and compete with others.”
