Changes in the global economy affect banking just like all other businesses, and today’s banking landscape is dynamic and changing. As a bank client, you’ve probably already noticed how new technologies are enabling huge, rapid changes in the ways banks operate and serve you. These range from the impact of artificial intelligence (AI) to the digitisation of money, identity, and fraud.

Digital transformation in banking

According to research by strategic management consultants Boston Consulting Group, internet banking has grown by a compound annual average rate of 13.6% in market value since 2019, while financial technology (fintech) firms have grown by 12.2% a year in that time. If these growth rates continue, by 2027 analysts expect the global market value for internet banking to reach $31.8 billion, and mobile banking is expected to reach $1.8 billion. Unsurprisingly, the use of these channels was accelerated by pandemic lockdowns when normal bank interaction in branches wasn’t possible.

For South African banking clients, the efficiency and convenience of internet banking, especially via mobile apps, have led to a significant shift in how you do your banking. Local banks have considered and addressed this shift speedily.

You’ll have noticed changes in the following

•  The products that banks offer
• Different markets becoming available to digital channels
• The physical infrastructure of banks, especially branches and their business processes.
   

Boston Consulting’s research found that most South African banking clients prefer digital banking and new products if the bank’s channels are secure and easy to use. From a market perspective, banks must now cater for a wide range of different client needs and levels of digital readiness.

For example, wealthier clients may prefer to have immediate access to human interaction for advice on more complex products and transactions. Clients in townships and rural areas, whose banking needs are often under-served, can meet many of those needs using digital banking, but most still want access to physical cash as well. For some, this reflects their perception of the reliability of online banking, but many simply need cash to transact in the informal economy. Products like the Nedbank MobiMoney wallet enable rural clients to send and receive cash digitally. We also offer registered stokvels the Nedbank Stokvel Account.

As reliance on digital banking and cashless transactions grows, call centres and digital chat services like WhatsApp are likely to replace physical branches, ATMs and on-site bank managers to address all your banking issues.

In South Africa the increasing popularity of mobile banking apps reflects the country’s deep mobile penetration, which has already passed 90%, according to a 2021 ICASA study. We can also expect the preference for mobile banking on an app to increase as smartphone sophistication continues and penetration deepens.