New research: The Future of Retail Banking in South Africa

29 August 2022

The Boston Consulting Group (BCG) presented original research at a live event at the Discovery head office in Sandton on 29 August 2022. The report, titled The Future of Retail Banking in South Africa was compiled in partnership with Discovery Bank and captures data and insights from consumers, businesses, and global industry experts on the country's imminent banking revolution.

At the launch event, Tijsbert Creemers-Chaturvedi, Managing Director and Partner at BCG, unpacked the research and findings. Seasoned financial journalist Alishia Seckam then hosted a panel discussion among leading industry experts, including Discovery Bank CEO, Hylton Kallner, on the topic of digital disruption across the financial services.

Watch the Business Day TV recording of the event

You can watch the recording of the launch event, which was livestreamed to BDTV, below:

View and download The Future of Retail Banking in South Africa report
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Tijsbert Creemers, Managing Director and Partner at Boston Consulting Group, and Hylton Kallner, CEO of Discovery Bank, explain why they feel South Africa is ready for the future of retail banking.

Hardly anyone today would doubt that at some point in the future, retail banking will be completely digital.

With the combination of data analytics, digitised services and personalised marketing that is already available, the day is coming when a customer will be able to conduct every bank service imaginable, from opening an account to managing personal finances or from talking to a consultant to finalising a home loan, with just a few taps or a voice command on a mobile app.

While a completely digital banking environment requires a supporting infrastructure that includes appropriate regulation, advanced security protocols and high smart device usage, many bank consumers believe the digital new dawn for South African retail banking will be a reality as soon as the year 2027.

Discovery Bank and the Boston Consulting Group (BCG) set out to research what to expect for the future of retail banking in South Africa. The majority of the 1,000 consumers and 400 businesses included in the research see the possibility that South African retail banking can become fully digital in just five years. Given continued regulatory developments, smartphone proliferation and watertight security, there will soon be a limited need for physical retail bank branches as we know them. An evolution in consumer banking expectations has been well underway since early in the new millennium, but it picked up speed when the COVID-19 pandemic forced consumers to conduct more of their activities online, including banking.

We have found, in fact, that many South Africans are fully ready to do all or most of their banking digitally, but in a number of cases, their banks are behind the curve. Consumers want digital solutions that are not only more intuitive, convenient, and secure, but also integrate a large breadth of their banking services into a single ecosystem, accessed through a single interface. Consumers want their banks to redefine service in ways that add value to their lives, especially in personalised, real-time, interactive financial management and in providing cutting-edge fintech.

Equally important, however, consumers want the machine to have a heart. No matter how smart the artificial Intelligence (AI) may be, people want to engage with people, especially when resolving complex, high-value transactions.

How should banks respond? There are multiple business models for the digital age. What they all have in common, however, is that they have bionic features. The initial client interaction is digital, but human engagement is available whenever it is needed, with technology adding value to human capabilities.

As consumers have become accustomed to the intuitive ease of shopping, accessing entertainment, or accessing South Africa is ready for the future vast information ecosystems through a few taps on a mobile app, their expectations have evolved. They are now ready for a transformation that will redefine what it means to be a retail bank.

The question is: are banks ready?
More retail banking insights to come

Interested in what changing consumer preferences will mean for retail banks, and how the future ideals of banks and consumers will match up? Follow Discovery's social media and website channels for more themed insights from this latest research paper in the coming weeks.

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