Financial Services

South Africa has a highly sophisticated financial services sector which is backed by a sound regulatory and legal framework, is highly sophisticated, boasting dozens of domestic and foreign institutions which provide a full range of services, inclusive of commercial, retail, merchant banking, mortgage lending, insurance and investment.

Furthermore, the country has a well-developed and proactively regulated banking system which compares favourably with those of industrialised countries. South Africa’s banking sector is dominated by the five largest banks, which collectively held 89.4% of the total banking sector assets as at 31 March 2020. Meanwhile local branches of international banks accounted for 7.0% of banking sector assets at the end of March 2020 (March 2019: 5.8%), while other banks represented 3.6% at the end of March 2020 (March 2019: 3.7%).

Currently the South African banking sector comprises 17 registered banks, two mutual banks, 14 local branches of foreign banks, two co-operative banks and 43 foreign banks with approved local representative offices.  In a recent World Economic Forum Global Competitiveness Survey, South Africa was ranked 8th in financial sector development out of 140 countries.  The Banking Association South Africa is the mandated representative of this sector and is the only African Banking Association to contribute to the International Institute of Bankers Global Survey of Regulatory and Market Developments.

The Banking Association South Africa is the mandated representative of the banking sector and addresses industry issues through:

The organisation's role is to facilitate a conducive banking environment through robust engagement with Government and other relevant stakeholders. A critical objective of The Banking Association South Africa is to work with its members to enable this role within the context of the prevailing transformation challenges in South Africa.

It manages numerous committees designed to advise The Banking Association executive on issues pertinent to the sector. The executive of The Banking Association South Africa also leverages off the capacity of the members of these committees, bringing optimal resources to bear on relevant issues.

It is the only African Banking Association to contribute to the International Institute of Bankers Global Survey of Regulatory and Market Developments and leads engagement on behalf of the sector on critical legislative and regulatory issues, including:

Offshoring and Outsourcing ICT and E

There is evidence that as technology evolves from basic voice services to broadband, the value of networks will increase exponentially thereby resulting in significant multiplier effects impacting positively on economic growth and individual well-being. South Africa’s ICT sector continues to demonstrate dynamic growth, increasing 12% from R204 billion in 2017, to R229 billion in 2018. Over a four-year period (2015-2019), the combined revenue for the sector increased by 6.5%, with telecommunication services revenue increasing by 6.4% and broadcasting services revenue by 8.8%. However, the postal services revenue has shown a declining trend, decreasing by 3.4%. Almost half of ICT imports – 47,5%, in fact – consisted of radio, television and communication equipment, and 30,7% consisted of office and computing machinery. This highlights South Africa’s reliance on other countries to provide it with ICT equipment, such as smartphones, tablets, computers and servers. South Africa’s largest ICT export – 60,5% of all ICT exports – was broadcasting, telecommunications and information supply services.

The sector is also one of the country's biggest job markets and it is driven by mobile services. The total overall employment numbers for the three sub-sectors increased by 18.8%, from 51 993 in 2017 to 61 757 in 2018. Over the same period, employment in telecommunications increased by 20%, postal employment also showed a double-digit increase of 21.9% and broadcasting employment increased marginally by 0.3%.  The country’s population coverage for 3G connection remained stable at 99.5% in 2018, while national population coverage for 4G/LTE increased from 76.7% in 2017 to 85.7% in 2018. In terms of urban population coverage, seven provinces had 100% 2G coverage in 2018; namely the Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga and the Northern West. Only the Northern Cape and Western Cape had 2G urban population coverage just below 100% at 99.6% and 99.99%, respectively.

According to the International Data Corporation (IDC) IT spending in South Africa was set to reach $26.4 billion this year and there is increasing evidence that organisations have embraced digital transformation initiatives in a bid to streamline their costs and to bolster their flexibility. ICT & E comprises a combination of manufacturing and service industries which capture, transmit and display data and information electronically. This broad sector includes ICT equipment, ICT devices, electronic components and ICT services, such as tele-communications, eHealth, business and education services. Traditionally, IT includes all hardware and software which stores, receives, transmits or retrieves information. The sector encompasses all information processing technologies, such as computers, the internet and tele-communications.

In South Africa, the ICT sector has been identified as a key sector for economic growth and long-term sustainability and currently contributes an estimated 7% to the country’s GDP. Over the years the South African economy has shifted from an economy rooted in primary sectors, to one driven by the tertiary sectors and, now with a focus on technology, e-commerce and financial services, is moving towards becoming a knowledge-based economy

South Africa's ICT sector has grown across the country's nine provinces, although there still exist areas, such as the Eastern Cape, which are significantly under-developed. The three main hubs include Gauteng, with 57% of ICT firms, the Western Cape, with 17% and KwaZulu-Natal, with 8%. KZN boasts an established and thriving services-based economy with global ICT connectivity, a financial hub in Umhlanga and burgeoning global business services (GBS) and business process outsourcing / services (BPO/S) sector. In fact, KZN’s GBS sector has already emerged as a recognised frontline CX-centric sales and lifecycle management hub, offering exceptional business-to consumer (B2C) and Business -to Business  frontline BPO sales talent that services local and global markets. In this regard, the region boasts a rich and diverse talent pool which attracts enterprising service agents with high empathy and neutral elocution.

KwaZulu-Natal is fast becoming an attractive destination for ICT investment because the province enjoys a number of advantages for business growth. The infrastructure and access to transport, as well as the existing manufacturing base, provide this sector with unrivalled opportunities for further development. A total of 12 digital community hubs have been established in the province’s rural areas in order to improve access to digital information by communities.

Pockets of exceptional competence and expertise have also emerged in niche vertical sectors, offering tailored, intelligence-driven, customer experience (CX) and lifecycle management services.  The emergence of inclusive hiring and impact sourcing indicates a movement to a more thoughtful, empathetic and ethical approach to recruitment targeting a deeper regional skills pool and promoting responsible supply chains.

Boasting the second largest provincial economy in South-Africa, the province features a conducive business enabling environment and established ICT infrastructure with global connectivity. Overall, the KZN GBS sector has exceeded job growth targets and the total number of jobs created between 2018 and 2020 of 10 507 reflects an average growth of 37,53%. 

KwaZulu-Natal’s average mean salaries for contact centre agents, team leaders and supervisors, quality assurance assessors and contact centre managers are even more competitive, often 60-70% lower than those of onshore contact centre staff in the UK and US.  KZN offers an established ICT infrastructure with global connectivity that includes extensive 3G and 4G coverage and over 73% mobile internet penetration. The Telecoms, retail and education sectors are the largest vertical industries serviced from KZN for the global source markets. Furthermore, the province has a high prevalence of ISO-certified security and quality management audited processes as well as digitally-driven insights and analytics capabilities. Increasingly there is evidence that the province is beginning to appreciate and invest in improving its capabilities in AI, robotics, machine learning and real-time analytics.