The banks and insurance businesses we know today will look very different in the near future. This change, driven by emerging technologies, shifting customer preferences and a massive increase in competition, is forcing traditional financial services businesses to evolve or risk falling behind.
This was the word from financial services executives who participated in an executive roundtable hosted by IBM in partnership with ITWeb in Stellenbosch last week. At the event, participants debated how AI is disrupting financial services and shared what they are doing to use AI more effectively.
During his presentation, Clive Sagadevan, CTO for IBM South Africa, shared the findings of IBM’s Enterprise 2030 report. The report is based on interviews with around 2 000 global business executives and suggests that AI won’t just enhance business models, it will become the business model. “According to the study, 79% of South African executives believe that AI will make a valuable contribution to revenue by 2030, but only 23% have a clear idea of how they are actually going to develop these new revenue streams.”
The same, but different
“As AI becomes more ubiquitous, differentiation is important. If everyone is using similar models, everyone will achieve similar outcomes,” Sagadevan said. The winners of the future will be the businesses that use AI creatively and strategically, he added. “By 2030, we expect to see a mix of large and small language models, as well as a fair amount of customisation.” And the executives in the room agreed. AI investments can’t be driven by a desire to do what others are doing or by fear of falling behind; they must be based on the broader business strategy and should aim to solve key business problems.
“AI can’t be the destination. AI is the fuel organisations will use to drive efficiencies, productivity gains and better decision-making,” Sagadevan noted. But if you aren’t feeding the model the right data, you won’t go anywhere. Here, the roundtable participants discussed what ‘good data’ looks like and stressed that without clear definitions and context, even the most sophisticated AI model is little more than a powerful engine running on the wrong fuel.
While he acknowledged the urgency around AI adoption, Sagadevan cautioned that without embedding real business logic into the technology and approaching it strategically, results will remain limited.
The business case for governance, compliance
The roundtable attendees agreed that AI holds incredible potential, but cautioned that there is still much to learn about it, which is why clear governance frameworks and guardrails are essential.
During the event, Lerato Lamola, a partner for Financial Regulatory at Webber Wentzel, discussed several key trends set to impact the financial sector in 2026, from payment ecosystem modernisation to open finance. Unpacking the regulatory side of this conversation and highlighting what institutions like the Financial Sector Conduct Authority (FSCA) and the South African Reserve Bank (SARB) are looking at when it comes to AI projects, she noted that risks are closely linked to specific use cases.
For example, a bank might use AI to deliver services and products to the customer, which seems harmless enough. But if a bank can’t interrogate a decision and clearly explain how an AI tool arrived at it, this is a regulatory and ethical liability, she warned. “Remember that you’re dealing with people’s money, and if people feel like they can’t trust you, they won’t do business with you.”
While South Africa doesn’t have any AI regulation in place at the moment, this doesn’t mean businesses can do whatever they like, noted Lamola. “Regulators have indicated that they are looking into this, and when they do put regulation in place, chances are high that they’re going to be scrutinising the financial services sector first because a flawed algorithm or a biased model can have ripple effects across the entire economy. Now, really, is the time to get on top of things,” she said. “The regulator will only get involved where there is mischief to be investigated. If the financial services space manages data responsibly, makes decisions with transparency, is clear about who is responsible for what and takes the customer along with them on the journey, there’s nothing to worry about.”
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