File: Online and digital banking
JOHANNESBURG - South Africa’s banking industry is rapidly evolving with three new banks expected to open online soon.
Consultancy firm Pricewaterhouse Coopers said changes in regulation, technology and digital innovation are major disruptors in the sector.
PwC believes while the banking industry is rapidly evolving due to regulatory changes, technological advances and innovation in the digital, the future of old-school banking remains in question.
“I think there will always be a market for the traditional way of banking. But I think even the traditional way of banking will change," said PwC&39;s Jorge Camarate.
"The segment of the population that will want and be open to digital-only services will only be the minority to start with, although a minority that can be profitably served. The majority of customers will still want to talk to someone who is knowledgeable and who can help them with a home loan.”
Local banks are already using digital platforms to enhance the customer experience. Several banks offer cardless transactions, or an option to tap and pay with contactless cards.
And then there&39;s SnapScan - a cardless, cashless, swipe-less service.
It uses a mobile phone’s camera to scan the barcode on the bill, before authorising the transaction.
Camarate said the big retail banks are under pressure to innovate due to new players in the industry.
“We see the emergence of low-cost digital players. Most of them operating in adjacent areas raising financial services. They are taking advantage of these new technologies that allows them to launch banking solutions faster, cheaply so that they can capture additional share.”
Historically, the local banking sector is profitable for the larger players but trends in the digital space could impact the banking landscape and their profitability.