RISK MANAGEMENT | 06 OCTOBER 2022

Tap into Bankings
Digital Future

Absa-CIB-Author

Richard Southey

Chief Digital Officer, Absa CIB

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The future of banking is digital … and deeply personal. As digital technologies reshape the monetary system, banks are drawing on partnership ecosystems and world-class advisory services to guide their clients forward.

Digital technology is changing the way money works. “The future of banking is a far richer and more digital experience,” says Richard Southey, Chief Digital and Experience Officer at Absa CIB. “The core parts of banking – security, financial intermediation, advice, and so on – remain the same, but digital technologies are now allowing the bank to extend our services to enable customers in a much bigger way.”

There’s evidence of that change all around. “Very few major retailers have not embarked on an e-commerce journey, for example,” he says. “That impacts the cash management business in multiple ways because that’s how those customers connect.”

Digital currencies are another example, as Web 3.0 developments such as blockchain and the metaverse are reshaping the future of money. “Central banks are starting to regulate around crypto assets, and are either experimenting with or implementing central bank digital currencies (CBDCs), which are an important part of the change,” Southey explains. “If things shift in a big way, the cash management business will be deeply impacted because it’s all about the management of cash. If the actual underlying currency changes, then you’re talking about really impactful moves.”

The future of banking

Southey’s current role as Chief Digital Officer, combined with his background in cash management (he led Absa CIB’s cash management business until early this year), gives him a unique perspective on how digital technologies are changing the banking landscape. He sees the future of the financial services industry being driven by strong advisory and digital capabilities, supported by ecosystems that solve problems for clients.

And despite the rapidly changing environment, the fundamentals of banking remain true. “Compliance, regulation and risk management remain important – and so does the bank’s ability to manage data in that space in the transactional world,” says Southey. “Fraud is a real black mark on the planet, and banks will differentiate themselves by their ability to understand data patterns and apply artificial intelligence to pick up early warnings around fraud. Keeping clients’ assets and money safe will always be paramount, irrespective of what happens to the underlying monetary systems.”

In the corporate banking space, advisory capabilities will be augmented by an ability to aggregate data and provide deeper research insights. “For banks, the competition will be around digital capabilities and being able to present opportunities to clients,” he says. “Your advisory capabilities will drive that competition forward. Advisers will need to connect ecosystems, being facilitators of trade and commerce through the bank’s network of customers, partners and suppliers. Banks that are totally traditional in their ways are going to be under a lot of pressure.”

The power of partnerships

The digital environment also brings partnerships into the spotlight. Southey says that Absa has evaluated more than 800 partnership opportunities over the past 18 months, looking at ways to add value through collaboration and co-opetition.

“Partnerships are a massive part of our strategy, and we’ve become extremely deliberate about how we approach them,” he says. “As a bank, we know what we’re good at. We have a very good platform from which to launch apps, and a very strong customer-based brand. Fintechs, for example, typically don’t have that, but they can go narrow at solving a particular problem. That’s a capability that we would love to present to customers, and it’s where the partnership opportunity lies. As we continue to grow our platform and our customer base, the fintech gets access to scale with really good capability, and we launch that together.”

But ultimately, says Southey, it all comes down to the client or customer experience. “It’s how people are going to consume your products and processes,” he says, “whether that’s in an integrated world of APIs [application programming interfaces], or whether it’s about online experiences. Design is paramount in this digital world. We’ve already seen that in consumer apps: the successful ones all have great client experiences. Data is key to delivering that, as it enables you to mass-customise the digital experience.”

Southey may, at times, sound less like a banker and more like a techie, but that makes sense, given the direction the banking industry is taking. “The way Absa is evolving, we’re no longer just a bank,” he concludes. “Through our technological advancements, we could consider ourselves as a software company with banking as a service.”

Absa-CIB-Author
Richard Southey

Chief Digital Officer, Absa CIB

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