Standard Bank roars into ‘fourth industrial revolution’
The future is digital, says CEO Sim Tshabalala
South Africa needs to ready itself for the fourth industrial revolution if it is to stay competitive, Standard Bank CEO Sim Tshabalala said on Thursday.
“For us to be competitive we have to be able to use [such advancements] as big data,” said Tshabalala. “What do business, labour, civil society and government do to make South Africa competitive in this fourth industrial revolution?”
Tshabalala’s comments came after the bank’s results for the year to December 2017, which showed 1.6 billion transactions in its SA personal and business bank came from digital channels – mostly mobile devices, compared with just 30 billion from face-to-face interactions.
This had increased from 1.4 billion in 2017. In the Africa Regions, the bank’s operations outside SA, 209 million transactions were conducted through digital channels, compared with 39 million from personal interactions.This helped deliver R30.4-billion in income to the transactional products line, the personal and business bank’s largest line, clocking R4.1-billion in headline earnings.
Headline earnings from the personal and business bank rose 10% to R14-billion, and still accounts for the largest share of the group’s R26.3-billion in total earnings, although the corporate and investment bank grew faster at 11% to 11.5-billion during the year.
Tshabalala attributes the 14% growth in group earnings – which was faster than rivals Barclays Africa, Nedbank, and FirstRand – to patiently sticking to the group’s strategy, investment in its core banking and digital platforms, and efficient cost controls.
The fourth industrial revolution did not necessarily have to lead to large-scale job cuts, he said.
Mobile banking is a social good
“Staff have to be skilled in a different way,” he said. “When you write a will, for example, you will still have to see someone. We’re going to need staff, but with a different set of skills.”
Still, the personal and business bank’s staff complement fell 1% to 28,125 employees during the financial year as the bank goes increasingly digital, while the branch network declined 3% to 375,000 square meters.
Rahima Cassim, a fund manager at Ashburton Investments, said people were once worried autoteller machines would slash jobs – a fear that never materialised.
“While Sim is correct that we need to understand how to remain competitive, we have to do it in the context of the reality of the country where education and opportunities are limited for many people,” said Cassim.
“In this regard, mobile banking is brilliant as it makes it convenient for people in rural areas to transact, so it is a social good. From the perspective that we have a workforce that needs to remain employed – while innovation is important, it should also be used responsibly, otherwise you can’t fix unemployment in the short term.”