Outgoing Nedbank chief operating officer (COO) Mfundo Nkuhlu says the bank’s years-long investment in modernising its technology infrastructure has positioned it to embrace artificial intelligence (AI), as digital capabilities become central to the future of banking.
Speaking to ITWeb following the announcement of his retirement after more than two decades at the bank, Nkuhlu reflected on how technology has reshaped both Nedbank and the broader financial services sector, describing AI as the next major shift that will redefine banking.
The bank announced this week that Nkuhlu elected to take early retirement at the end of the year, having reached the age of 60.
Following his retirement on 31 December, the role of group COO will be discontinued and the responsibilities associated with the role will be reallocated within the existing group executive committee structure.
Nkuhlu said one of the key achievements during his tenure as COO was stabilising the bank’s technology environment before accelerating investment in data and AI capabilities.
He explained that this work built on years of technology modernisation.
“We’ve been stabilising our technology environment, making sure the business is brought to a state of good health, and then investing in our data and AI capabilities. We've been doing all of these on the back of a long-term investment that we made in technology modernisation, and that tech refresh enabled us to be talking seriously about data and AI at this point, and the positive impacts on clients and the front-end of the business,” he said.
The comments come a day after Nedbank reported that its Intelligent Hyper Automation strategy has already generated more than R375 million in annualised value.
The programme combines AI, generative AI, analytics, machine learning and robotic process automation to improve revenue generation, fraud detection, productivity, client experience and operational efficiency.
Although AI is still in its early stages, Nkuhlu believes the technology will become indispensable.
“We recognise that AI is still nascent and still beginning… but we're proud of the steps that we've taken,” he said.
Technology reshaping banking
Looking back over his 22-year career at Nedbank, Nkuhlu said the pace of technological change has accelerated dramatically.
He likened technological development to an S-curve, where one generation of innovation matures before giving way to the next.
“Technology goes through a similar cycle and when one generation of technology matures, you’ve got to evolve… We are now staring in the face of the need to leverage AI as a new capability altogether,” he said.
According to Nkuhlu, engineering and software development capabilities have become as important as traditional banking disciplines such as finance, credit and risk management.
“The importance of engineering capability as part of our technology delivery system has risen in importance… These were not traditional skills you would think of in banking.”
He added that modern banking increasingly depends on flexible digital platforms capable of delivering personalised services.
“That is where AI and the use of data is coming in strongly… I don’t think we can run without that capability.”
More competition
Nkuhlu warned that technology is reshaping competition across financial services, with fintech firms, technology companies and retailers increasingly challenging traditional banks.
“We operate in a highly-competitive environment in which both the traditional banks and the new generation banks are investing heavily in modern technologies. We are also competing with non-banks such as fintech and tech companies coming into the banking value chain.”
He noted that competition in payments is intensifying as retailers expand financial services offerings and digital-native banks enter the market.
“Technology is not changing only the processes within the bank; it’s changing the entire financial services landscape. New players are now coming in from other sectors of the economy.”
Decline of cash
Looking ahead, Nkuhlu identified digital identity as one of the next major building blocks for financial inclusion.
He said digital financial identities could make transactions easier, while strengthening security against cyber threats.
“They will have to make sure we raise the levels of security and protect clients against the digital and cyber risks.”
He also expects digital channels to continue reducing reliance on cash, forcing banks to rethink branch networks, ATMs and operating models.
“It’s a major transformation… digital channels, digital products should be cheaper than manual ones.”
Despite the changing competitive landscape, Nkuhlu believes Nedbank's long-term technology investments have positioned the bank well for the AI era, with digital transformation now becoming a key driver of future growth and operational efficiency.
Share
