How South Africa's banks lead in digital transformation, and how CRM contributes

The South African banking sector was ranked 3rd out of 148 countries in the 2013/14 World Economic Forum Global Competitiveness Survey, and realizes the value that technology brings to customer centricity and the importance to digitally transform.

South Africa has a developed and well regulated banking system which compares favorably with those of industrialized countries. Although the sector has been through a process of volatility and change in the past, it has attracted a lot of interest from abroad with a number of foreign banks establishing presence in the country and others acquiring stakes in major banks.

Why SA Banks are world leaders in digital transformation

Although traditional banks have retained their advantage of established trust relationships with customers, advancing digital disruption will erode profitability unless they can respond.

Globally, revenue from digital banking products and services is estimated to grow to almost half of banks' revenue over the next 5 years. Financial technology innovators (fintechs) and challenger banks often have an IT cost per user that is 10% that of traditional banks.

In South Africa, despite banks having invested heavily in information technology (IT), the expected efficiency and scale benefits have not been realized; with the cost-to-income ratios of the major banks stubbornly sitting at around 55% between 2013 to 2015.

There are many causes of this, including the cost to hire and retain scarce skills, slowing revenue growth, increasing spend on compliance and the cost to maintain expensive legacy technology platforms. But the underlying problem is a failure to respond to changing consumer behavior.

These organizations must now understand what needs to be done to address the interplay between digital and physical in the emerging digitized ...