OVERVIEW
Banking and financial services New sectors and new licences are creating opportunities.
SECTOR INSIGHT African Rainbow Capital has acquired a majority share in Tyme Digital Bank.
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n entirely new economic sector has opened up in South Africa within the last decade – renewable energy. Financing for this investment segment has come from South Africa’s sophisticated banking sector and from the cash reserves of some European utilities. The Power and Infrastructure division of Standard Bank, one of Africa’s biggest companies, was involved in about 40% of the projects approved within the first four rounds of the bidding process. South Africa’s banking and financial services sector looks quite different compared to 10 years ago in two other important ways. Firstly, the move to ever-more sophisticated IT applications has accelerated (and moved a long way from the first ATMs launched by Standard Bank in 1981). The related change is the issuing of banking licences to newcomers offering digital banking instead of tellers and deposit slips. The first new bank to receive a licence since Capitec in 1999 was Tyme Digital in 2017. Tyme stands for Take Your Money Everywhere and refers to its plans which do not include a branch network. Commonwealth Bank of Australia bought a controlling share of Tyme when it was a loans company and African Rainbow Capital (ARC) was originally the venture’s BEE partner, but in August 2018 ARC bought out the Australians. The bank is targeting the lower-income segment and is rolling out access to its services SOUTH AFRICAN BUSINESS 2019
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through machines in major retailers like Shoprite and Pep and Boxer stores. A study by EY reports that 35% of digitally active South Africans use fintech and banks are responding quickly to this. Bank Zero, which has a provisional licence and is led by former FNB bank leaders, calls itself an “app-driven” bank. Discovery Bank has the advantage of having access to vast stores of data through all the other businesses in the Discovery group. The other bank close to gaining a licence is Post Bank, a division of the Post Office. In 2019, t h e b ank in g sector globally will spend more than R100 -billion on artificial intelligence (Citi GPS). Money web calculated that the Big Four banks spent R30billion on ICT in 2016, a sign of how seriously the technology challenge is being taken. Capitec, which is counted in some quarters as part of a new Big Five, recently spent R348million on Creamfinance which will allow for machine learning
