FINANCIAL SERVICES SECTOR OVERVIEW
TESTING NEW WATERS BY ELSKE JOUBERT South Africa is home to a number of foreign and domestic institutions with services including retail, merchant and commercial banking as well as insurance, investment and mortgage lending. The country boasts a developed banking system that is well-regulated, comprising a central bank, large banks and investment institutions, plus a few smaller banks. In comparison to leading industrialised countries, South Africa’s banking sector compares favourably – and there are a number of foreign banks and investment institutions operational in South Africa. In September 2017, ratings agency Moody’s upgraded its outlook on South Africa’s banks from negative to stable, pointing to the resilience that the banks had shown in the preceding few months. Moody’s said it expected the banks’ creditworthiness to remain resilient for the subsequent 12 to 18 months.
KEY TRENDS IN THE BANKING SECTOR South Africa’s banking sector has historically been profitable for the four big players (Standard Bank, FirstRand Bank, Absa and Nedbank). However, there are three trends developing in the market that could potentially disrupt the banking landscape. These are: • The emergence of digital solutions and lower-cost models launched by adjacent financial services players • The emergence of sector- and industry-specific banks, closely integrated with broader supply chains, launched by non-financial services players • Ongoing transformation of the four universal banks to address changing customer, regulatory and technology needs
1 Discovery Bank
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SIX NEW BANKS
2 Bank Zero
3 TymeDigital
4 African Bank
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Postbank
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