The 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
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