Testing new waters in the financial services sector

South Africa is home to a number of foreign and domestic institutions with services including retail, merchant and commercial banking as well as insurance, investment and mortgage lending. The country boasts a developed banking system that is well-regulated, comprising a central bank, large banks and investment institutions, plus a few smaller banks. In comparison to leading industrialised countries, South Africa’s banking sector compares favourably – and there are a number of foreign banks and investment institutions operational in South Africa.

In September 2017, ratings agency Moody’s upgraded its outlook on South Africa’s banks from negative to stable, pointing to the resilience that the banks had shown in the preceding few months. Moody’s said it expected the banks’ creditworthiness to remain resilient for the subsequent 12 to 18 months.


South Africa’s banking sector has historically been profitable for the four big players (Standard Bank, FirstRand Bank, Absa and Nedbank). However, there are three trends developing in the market that could potentially disrupt the banking landscape. These are:

• The emergence of digital solutions and lower-cost models launched by adjacent financial services players

• The emergence of sector- and industry-specific banks, closely integrated with broader supply chains, launched by non-financial services players

• Ongoing transformation of the four universal banks to address changing customer, regulatory and technology needs

Speed and agility

Increasingly, non-traditional players are entering the market, creating what is referred to as a “marketplace without borders”. There are a number of hungry newcomers to the financial services industry, aggressively challenging the more traditional players and legacy systems and circling around new market opportunities – all generating rapid change in the state of financial services in South Africa.

Akash Maharaj, Private Capital Transactor at Investec, says: “The financial needs and requirements of consumers and businesses are constantly evolving. They demand innovative, cost-effective technology solutions to help them easily transact, save and invest, both locally and abroad.”

South Africa is primed for change, having as it does the continent’s most advanced financial system. According to the 2017 Finnovating for Africa report, South Africa was home to 94 of Africa’s 301 fintech startups, of which 22 focused on some form of lending support.


Technology is altering every aspect of how we live and work. If you’re an accountant, here is what you should be doing this year, says Colin Timmis, SA Country Manager for accounting software company Xero.

Making friends with automated accounting

Automated technology has the power to help you do your job better and faster. Picture yourself no longer burdened with administrative tasks after hours or on the weekend.

Equipping yourself with the right skills

New technology can be daunting and you might battle to keep up. Regular training is crucial. This could involve demonstrations of cloud accounting software using dummy data or online courses like those offered by the Microsoft Virtual Academy.

Choosing software that works together

Choose new software carefully and make sure that it integrates with your current systems and processes seamlessly. This will save time and make life easier.

Making the most of data

Information is priceless, but its real value comes from how it is curated and used. Smart accountants understand the importance of data analytics to provide better services. Create one master-set of organised data to work from effectively and save time.

Shifting focus through tech

The right technology can take care of a host of mundane tasks for you, letting you focus on your clients’ objectives and building new business relationships.


1 BLOCKCHAIN According to a 2017 report by PwC, 20% of finance businesses will incorporate blockchain by 2020 and it is expected to become more mainstream within the financial industry soon.

2 NEXT GENERATION CHATBOTS More banks are seeing the value of using chatbots in customer service. Chatbots offer improved quality of interactions, greater accuracy and speedy responses.

3 FROM STARTUPS TO REAL BUSINESSES Historically, the fintech market has been made up of small startups looking to innovate swiftly. Now, more established firms are adapting to these new technologies too.

4 AUTOMATION No more manual processes. Platforms and apps that help automate people’s lives are the new ‘in thing’. As banks become more automated, they will develop smarter workflows that prevent bottlenecks in their operations and improve process efficiencies.

5 CYBERSECURITY The fintech space is rooted in technology and technology is vulnerable. Keeping ahead of the curve will be how players stay in the game.