The Postbank’s IT systems overhaul is 70% complete, as the financial institution looks to iron out legacy IT issues and vulnerabilities.
This information came to light in a recent written Parliamentary question from Democratic Alliance MP Natasha Mazzone, asking whether concerns about the Postbank’s IT issues continue to exist.
Previously a division of the South African Post Office (SAPO), the Postbank is in the process of becoming a fully-licensed state bank that offers mainstream banking products.
An IT systems upgrade was one of the licensing requirements set out by the South African Reserve Bank (SARB) for the Postbank to operate from a secure banking IT environment that is on par with all the other commercial banks.
Responding to the Parliamentary question, Mondli Gungubele, minister in the Department of Communications and Digital Technologies (DCDT), said the banking institution used SAPO’s outdated and ageing IT infrastructure, which was not fit for banking purposes.
As a result, the bank embarked on an IT infrastructure modernisation project, which intended to address its legacy IT issues, including those identified by SARB, noted Gungubele.
“Progress has been made in this regard and the project is 70% complete,” reads the minister’s reply.
“In September 2023, in addressing the SA Reserve Bank variation notice conditions and as part of its IT infrastructure modernisation, the Postbank migrated from an old financial switch to a new financial switch, which resulted in some issues which impacted the payment of SASSA [South African Social Security Agency] grants.
“The issues were identified, resolved and the payment processing system has since been stabilised, resulting in 4.8 million beneficiaries being paid in September 2023. After this stabilisation phase, there have been no issues with the processing of payments.”
After September’s technical glitch at the Postbank, Gungubele revealed the financial institution was making “tremendous” progress towards concluding its banking IT systems improvement programme. This is despite his predecessor saying the IT systems overhaul would be completed by the end of April 2023.
In May 2022, the DCDT tabled the South African Postbank Amendment Bill to the National Assembly, in a move to transition the Postbank into a full-service bank.
The Bill, tabled by former communications minister Khumbudzo Ntshavheni, aims to add and amend definitions in the South African Postbank Act, to allow the Postbank to function as a separate entity to the SAPO.
It will also pave a way for the setting up of a Bank Controlling Company, to serve as a holding company for the bank, and the shareholding of Postbank to be transferred from the SAPO to government.