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Creating Value Through Digitalisation: South African Banking Sector

Digitalisation in the South African financial industry has been gaining significant momentum over the last decade (Romagny et al., 2021). Due to the quick entry of new digital players, the drive for innovation and the challenge to the status quo, the South African financial sector is developing into a “marketplace without boundaries” (Camarate and Maritz, 2018). Through the implementation of AI (Artificial intelligence), machine learning, process automation, data analytics, and interfaces in all areas of business, organisations in the financial sector can streamline their business operations and improve their customer outcomes, such as customer retention, customer satisfaction and customer experience.  (Romagny et al., 2021). 

We discuss the top opportunities for the banking sector to create incremental value through the implementation of new technologies:


Globally, the differentiation between traditional financial services and services from other industries is narrowing (Romagny et al., 2021). Romagny et al. (2021) states that this provides an opportunity for financial institutions to capitalise on this diversification by offering services beyond their primary value chains.

Through digitalisation, financial organisations can implement the offerings of non-financial companies into their ecosystem, providing one platform to serve their customers’ day-to-day needs (Romagny et al., 2021)

According to Lamb, Marais and Choudary (2021), in order to successfully develop a platform economy, financial institutions need to establish strong partnerships across several value chain levels. They further state that institutions should actively develop their partnerships in order to leverage the necessary skills to make a platform economy successful in South Africa (Lamb, Marais and Choudary, 2021).


Customer behaviour and expectations are changing, resulting in a demand for a single platform to serve all customer needs (Romagny et al., 2021). This provides an opportunity for the financial industry to develop a digital ecosystem that provides a broad area of services for its customers (Romagny et al., 2021). Financial institutions can participate in partnership with other financial and non-financial institutions to create ecosystems that satisfy a span of client needs (Lamb, Marais and Choudary, 2021). A financial institution can therefore develop new and integrated value propositions in accordance with organisations in various industries, such as commerce, housing, and automobile (Lamb, Marais and Choudary, 2021). 

In order for this ecosystem to be successful, it needs to provide an “intuitive user interface and experience design” that provides effective interfacing of products or services relevant to the customers’ expectations (Romagny et al., 2021).


Hyper-personalisation is the use of real-time customer data to elicit insights by using behavioural and data science in order to offer products and services that are specific to a customer’s context and relevant to their needs (Deloitte, 2020).

Through digitalisation, banking institutions can utilise this customer data to provide a personalised customer experience, says Romagny et al. (2021). Machine learning and sophisticated algorithms can be used to build accurate profiles of customers and their journeys, highlighting opportunities for banking institutions to tailor content or offerings to their clients’ needs (Romagny et al., 2021).


BaaS (Banking-as-a-Service) allows the smooth integration of financial products and services into other forms of customer activities, often on digital, non-financial platforms (Jones and Pardiwalla, n.d.). Therefore, non-financial businesses can distribute financial services or products from a financial institution under their own brand name (Jones and Pardiwalla, n.d.)

BaaS provides financial institutions with the opportunity to commercialise their current capabilities and scale these products or services into “external, third-party ecosystems”, providing new revenue streams, access to new customer segments and valuable customer data (Romagny et al., 2021). BaaS further provides advantages of a faster speed to market time with decreased costs and limited human intervention (Romagny et al., 2021).


The need for financial advice in South Africa is growing. According to the 2020 Oliver Wyman Digital Banking Index Study, there is an insufficient provision of robo-advisory services amongst South African banks (Romagny et al., 2021). Robo-advisory is a process that automates financial advice assumed from customers’ data.

Implementing robo-advisory services provides excellent financial advice to all economic segments (Romagny et al., 2021). This combined with the growing demand for financial advice in South Africa, provides banks with an opportunity to create value by assisting customers to reach their financial goals through the use of automated robo-advisory services (Romagny et al., 2021).

Digitalisation in the financial industry has offered great value to the South African banking sector, however, the South African market still has many opportunities to scale its digital service offerings (Romagny et al., 2021). Financial institutions will have to overcome challenges such as legacy infrastructure and technology, as well as outdated business models in favour of embracing the digital (Romagny et al., 2021). This digital journey that financial institutions are embarking on is an ongoing process, as the emergence of new technologies continually changes the status quo (Romagny et al., 2021).


Camarate, J. and Maritz, C., 2018. A marketplace without boundaries 2.0. Digital disruption in the South African banking sector. [online] PwC, p.1. Available at: <> 

Deloitte, 2020. The future of retail banking. The hyper-personalisation imperative. [online] London: Deloitte, p.4. Available at: <> 

Jones, D. and Pardiwalla, A., n.d. The Rise Of Banking As A Service. [online] Oliver Wyman. Available at: <> 

Lamb, J., Marais, K. and Choudary, S., 2021. THE POWER OF THE PLATFORM ECONOMY FOR FINANCIAL SERVICES. [ebook] Standard Bank, pp.3, 5. Available at: <> 

Romagny, P., Calvey, P., Stacey, J., Sheard, J., Spangenberg, K. and Plantier, B., 2021. DIGITALIZATION IN FINANCIAL SERVICES IN SOUTH AFRICA. [online] Oliver Wyman, pp.8-16. Available at: <>