FOCUS ON AFRICA: INFRASTRUCTURE
Standing on a platform for growth
Africa wasn’t alone in seeing economic progress set back by COVID-19 and now by Russia’s invasion of Ukraine. But BankServAfrica is pressing on with a programme that promises to lift it out of the doldrums, says Portia Matsena BankservAfrica, the continent’s largest automated clearing house, is marking its 50th anniversary year by accelerating the drive to build a platform economy.
Wholly owned by five South African commercial banks – Firstrand, Nedbank, Standard Bank of South Africa, ABSA Bank and the Dandyshelf Group – it is South Africa’s official payment systems operator (PSO), processing billions of payments annually involving trillions of South African rand. Based in Johannesburg, the organisation’s operations, however, are not confined to its home country. BankservAfrica is already a key player in the Southern African Development Community (SADC), enabling interoperability in the region through its specialist regional clearing house (RCH). Beyond Southern Africa, its retail and card payment systems are well-established in the Democratic Republic of Congo, among other countries, and it regularly meets with key payments stakeholders across East, West and Central Africa to help usher in the continent’s new era of a hyper-connected financial markets infrastructure. The importance of adopting a payments platform to enable better delivery of financial services – part of the BankservAfrica 2.0 strategy – cannot be underestimated. It is one of the central pillars of the South African government’s National Development Plan to help improve financial inclusion for the country’s millions of unbanked or underbanked – a move
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widely regarded as a key trigger for economic development. And there is a desperate need for that: South Africa’s already weak economy was plunged into further distress by the COVID-19 pandemic, with worsening unemployment and reduced economic output. Indeed, latest statistics show that, in the fourth quarter of 2021, the country’s unemployment rate reached 35.3 per cent – the highest since the quarterly labour force survey started in 2008. Official estimates show an economic growth rate of only 2.1 per cent in 2022, far below what experts say is needed to make meaningful progress in reducing unemployment and poverty, and not helped by the global economic stress caused by Russia’s invasion of Ukraine. Against that backdrop, BankservAfrica's infrastructure renewal modernisation programme, a critical enabler for BankservAfrica 2.0, is making solid gains. The target state of BankservAfrica 2.0 is a fully interoperable, Cloud-ready orchestration platform, enabling a better delivery of financial services. As a technology platform, BankservAfrica 2.0 promises to be highly automated, extensible, and scalable on-demand, easily accessible to authorised participants through standardised APIs, with guaranteed, always-on availability. And, as a business, it says is ‘partnership-focussed, innovation-centric, and data-driven. We are structured around best-in-class teams of self-directed, high-performing
professionals, supported by clear procedures and standards’. Cloud computing is one of the critical enablers in the first stage of the BankservAfrica 2.0 strategy. But there are others. The country’s Rapid Payments Programme, will see transactions cleared on an immediate basis (TCIB) for enabling cross-border payments in SADC and beyond. There is also a digital identity programme, a multi-industry-endorsed initiative to create one scheme for digital identity in South Africa. This, it is hoped, will enable validation, trust and interoperability for the country, as well as drive financial inclusion and give the unbanked access to financial products and services. Here, Portia Matsena, BankservAfrica’s chief information officer, answers some key questions. THE PAYTECH MAGAZINE: How have payments and customer demands changed in South Africa over the last couple of years? PORTIA MATSENA: If you look at BankservAfrica 1.0, we were more of a back office, just a processing house, but the landscape has changed. And, if you look at what has driven the landscape, COVID has changed how we do business and also how we do a lot of things in the payments industry. So, if you look at government, it had to subsidise a lot of people, due to the COVID experience that we had, and that increased payment volumes. The COVID ffnews.com
