South Africa's banking sector is likely to undergo significant change as the industry moves towards faster payments, shared infrastructure and greater interoperability, according to Nonhlanhla Mdletshe, executive for cash product at Absa Business Banking.
Speaking to ITWeb, Mdletshe said the shift towards real-time payments and shared utilities under the financial sector's Vision 2030 modernisation programme represents one of the most significant disruptions facing banks.
"The biggest disruption for me is Vision 2030 and the move towards faster payments," she said. "It means moving away from traditional card rails into real-time payment rails and shared utilities."
According to Mdletshe, the move towards shared infrastructure will require banks to rethink traditional sources of competitive advantage.
Historically, financial institutions have invested heavily in infrastructure such as ATM networks, acquiring capabilities and payment systems. However, as more of this infrastructure becomes utility-based and accessible across the industry, banks will need to find new ways to differentiate themselves.
"Owning infrastructure such as ATMs or being the biggest acquirer will no longer necessarily be a competitive advantage," she said. "Banks will need to look at how they deepen customer relationships and solve real customer problems beyond simply facilitating transactions."
Mdletshe believes the shift will enable banks to focus more on innovation and customer outcomes rather than building and maintaining every component of the payments ecosystem themselves.
She also highlighted digitalisation as a key driver of financial inclusion. While access to a bank account has traditionally been viewed as a measure of inclusion, she noted that research has shown this does not always translate into meaningful participation in the formal financial system.
"We used to think that if someone had a bank account, they were financially included. Research has shown that this is not necessarily the case," she said.
By digitising more transactions, banks can develop richer insights into customer behaviour and build financial profiles that may help unlock access to services such as credit and insurance.
Mdletshe added that open banking and stronger collaboration between banks and fintechs are expected to play an increasingly important role in expanding access to financial services and supporting innovation.
As payment infrastructure becomes more commoditised, she believes the next phase of competition in the banking sector will be defined less by infrastructure ownership and more by innovation, collaboration and the ability to address customer needs.
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