Fresh from wrapping up its multibillion-rand Managed Evolution IT refresh programme, Nedbank is doubling down on its digital ambitions, pouring a further R2.6 billion into technology over the past financial year.
The continued investment signals the big-four bank’s intention to accelerate digital innovation across its operations.
Speaking to ITWeb yesterday after the release of Nedbank’s annual results for the year ended 31 December, chief operating officer Mfundo Nkuhlu said the technology spend underscores the group’s long-term commitment to modernising its platforms, enhancing customer experience and driving operational efficiency in an increasingly digital banking landscape.
The Managed Evolution project kicked off in 2016, and the bank spent R11.7 billion on the IT refresh initiative. The long-term technology transformation strategy aimed to modernise Nedbank’s IT infrastructure and systems.
Nedbank’s goal was to replace legacy systems with more modular, cloud-based and application programming interface-driven architecture to improve efficiency, scalability and innovation.
“We didn’t stop investing in technology because Managed Evolution has been completed,” said Nkuhlu. “There are some investments that we are making with respect to our payments channels. I think the payments world is a very busy and active space – it’s also a space where non-banking players seek to play, such as fintechs, retailers and tech companies.”
Nkuhlu said during the reporting period, the bank recorded 183% growth in its PayShap volumes, while contactless payment volumes increased by 56%, reflecting strong momentum in digital transaction adoption.
He added that the bank is seeing strong growth in value-added services linked to payment channels, alongside rising e-commerce transactions, while cash withdrawals have declined by 6%.
According to Nkuhlu, digital volumes are now offsetting the drop in cash usage, in line with expectations, noting that the momentum extends beyond domestic payments, with the bank also actively involved in cross-border payment solutions.
“The regulatory environment has yet to settle, but we are also looking at blockchain technologies and what is happening with crypto-currencies, as well as stablecoins. We are still investigating, learning and testing before we can fully deploy these.”
Digital in demand
In its financial results yesterday, Nedbank Group chief executive Jason Quinn said the bank made digital gains during the reporting period.
The bank’s digital volumes and values increased strongly as more clients across all the bank’s businesses embrace the benefits and convenience of digital channels.
In Personal and Private Banking (PPB), the firm said digital transaction volumes and values increased by 10% and 16%, respectively, supported by digitally-active retail clients that increased by 9% to 3.4 million.
In Nedbank Africa Regions (NAR) digitally-active retail clients made up 70% of NAR's total active client base, which resulted in the achievement of NAR's 2025 target.
According to the financial services firm, active Nedbank Money app clients increased by 14% to three million, supporting a 15% increase in transaction values. App users in NAR reported an 18% increase in app usage.
Asked about the reasons behind the digital gains, Nkuhlu said the bank’s sustained digital investments over time have significantly improved ease-of-use across its digital channels, streamlining client onboarding processes and eliminating large amounts of paperwork and administrative work.
He noted that digital has increasingly become the channel of choice for customers, a shift now clearly reflected in sales metrics.
In PPB, digital sales account for 73% of all new sales, up sharply from just 4% in 2019, he revealed.
“In Corporate and Investment Banking (CIB) and Business and Consumer Banking (BCB), adoption of the Nedbank Business Hub self-service platform has also accelerated, with usage rates reaching 50% in CIB and 76% in BCB.”
Nkuhlu said the figures demonstrate strong uptake of self-service solutions, even among business and corporate clients.
Branches turn service centres
While digital channels are gaining momentum at Nedbank, he stressed the physical branch still remains relevant.
“We have to make our physical branches fit-for-purpose as we will use them as service centres, to onboard clients onto our digital channels,” he noted.
He explained that this is because the core banking platform will seamlessly work with the Nedbank Money app, and the company is now looking at the second generation of that, called “Digi2”.
“We will do an upgrade of the Nedbank Money app and we will launch that during the course of this year. So even if clients visit the physical branch, they will be helped to enrol onto our digital channels. So, our branches are increasingly becoming service centres.
“Of course, we’ve got to see what rationalisation and cost savings come on the back of that. We have roll-out plans in place to achieve this. This must also be seen against the backdrop of industry initiatives being led by the regulator, the South African Reserve Bank – the so-called Cash Smart Strategy – which seeks to reduce the use of cash in circulation and also optimise the ATM infrastructure across the country.”
On the AI front, Nkuhlu said Nedbank is exploring several use cases, including credit decisioning, fraud analytics, digital marketing and driving cross-sell opportunities.
He added that the bank is developing a comprehensive AI and data strategy, viewing the two as “two sides of the same coin”, and emphasised a practical approach to integrating AI into the bank’s value chain and business processes rather than treating it as a headline concept.
Nkuhlu explained that this strategy involves combining human expertise with machine capabilities in service delivery.
He noted that AI has evolved from traditional analytics to generative AI and now to agentic AI, with intelligent agents actively supporting value delivery to clients.
He stressed that the focus is not on a contest between humans and machines, but on adaptation, noting that those who effectively scale and work alongside AI will benefit, while those resistant to change may fall behind.
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