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Global banking of the future

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The world has become a global village and as information becomes readily available consumer expectations of service and options has widened – this is the environment in which banks are competing. South African banks have to adapt to global competition or they will be swallowed alive.

Since the early 1980s, all the basic, traditional functions of banks have been subject to increased competition. The ability of the sector to compete in the global economy depends on the effectiveness of its people at all levels, and dictates a continual and rapid acquisition of new knowledge and new skills in the face of these changes.
BANKSETA is actively involved in the development of skills in the banking sector to ensure enhanced competitiveness. Whilst BANKSETA are equipping bank employees to do their current jobs well, they also have an eye on how to respond to the future.
Through research and benchmarking its product offering to ensure its relevance and fulfillment of mandate, BANKSETA continues to build on its past success to create a solid foundation for the future.
“Technology and globalisation are the biggest drivers of change. Globalisation, rapid growth and increasing sophistication of capital markets have increased the scope for new products,” says CEO of BANKSETA, Max Makhubalo.
Technology continues to be a major driver of change in the banking sector. While it has facilitated the rationalisation of physical banks and has provided vast opportunities for the sector, especially pertaining to service delivery, it also has created new threats and new competitors.
“While technology will provide even more opportunities for expansion and delivery to new markets, it is likely to have further negative implications for employment within the sector. The increase in automation is expected to result in a decrease in demand for clerical and support workers. Large-scale job losses are not anticipated however, due to the likely re-deployment of employees,” says Makhubalo.
A number of factors are expected to drive shifts in the occupational mix over the next fifteen years, including the continued automation of routine functions, an increased focus on customer services, the alignment of systems with new regulatory requirements and the tailoring of services and products to customer requirements.
Automation has increased the need for highly skilled employees. Technical training alone is inadequate to provide an adequate supply of skills. Experience, knowledge of the industry and a solid understanding of how banking works is vitally important. While the technical aspects of banking remain important, soft skills such as effective communication, problem solving, lateral thinking and inter-personal skills have become central to the competitiveness of banking.
Advanced technology has also increased competition between financial intermediaries and even retail stores, which can now also provide a range of services that traditionally were only offered by banks. “Non-banking financial institutions have slowly started competing for and gaining banks traditional assets and are offering financial services that, historically, have been provided almost exclusively by banks,” says Makhubalo.
Globalisation and technology has considerably changed the face of banking. It has enabled banks to make use of the Internet, changing the channels through which they deal with customers. Technology has also enabled customers to gain control over their own personal finances as they are now able to engage with the banks and gather more information through the Internet, while globalization has created a seamless banking environment that provides customers a choice – the most important being the choice of how they want to manage their own finances.