Opportunities abound in changing banking industry

blue-ATM-by-scottchan.jpgThe South African banking industry is dynamic and has evolved significantly, as banking chief executives have adapted their strategies in response to regulatory changes and global economic pressures. Over the past 20 years, the sector has transformed through consolidation, technology and legislation.

In the aftermath of the 2008 global financial crisis, international standard-setting bodies announced a range of strategies to address the fundamental weaknesses revealed by the crisis. One such strategy was amendments to the Basel II regulatory framework. Basel III requires banks to hold more capital of higher quality and to have enough liquid assets to cover outflow of funds. As a member of the G20, South Africa’s compliance was compulsory. This challenge was successfully navigated with all of South Africa’s banks completing the transition in January 2013.

It is therefore no surprise that despite dramatic changes over the last two decades, the country’s banking system is well developed and compares favourably with many industrialised countries as WEF Competitiveness Survey 2012/13 ranks South Africa 2nd out of 144 countries. That said, there are still challenges.

A recent survey by PWC shows that one of the top concerns facing South Africa’s banking industry is the sector’s growing dependence on technology. This is not unexpected given the rise of electronic and online banking channels coupled with banks replacing legacy systems. On the one hand, the industry is trying to use technology to become more efficient, but this has to be balanced against their concerns about fraud and the huge costs involved in fighting this crime. The benefit is that rapid technological changes are reducing transaction costs, bridging geographical strains and inspiring investment from large financial institutions.

There are also some concerns in terms of how prepared the banking industry is to manage the new Companies Act, compliance with International Financial Reporting Standards and the proposed Protection of Personal Information Bill.

Despite the banking sectors excellent transformational progress, roughly 19 percent of South African adults still have no formal access to financial products or services to manage their finances. This is by far the biggest challenge but also shows the growth opportunities in the industry.

There are many prospects in this evolving industry. If you are looking to make a change in your Finance career, we can assist. Communicate Personnel have various Accounting jobs, Financial Management jobs, Financial Director jobs and more. Don’t delay start searching today!

Credit: FreeDigitalPhotos.net by scottchan