Standard Bank’s push to increase the use of its digital banking channels appears to be paying off across its operations, particularly in SA.
In recent years the largest financial services group on the continent has ploughed billions into a turnaround strategy and to give its operations a more digital flavour, having largely been seen as a laggard in this regard.
Even then, SA’s biggest banks have had to retrofit new systems onto the old — with varying levels of success. This is not just one bank’s problem. The industry has to invest as a collective in upgrading the system.
Standard Bank reported a 6% rise in digitally active retail clients in SA as more customers transitioned to convenient digital channels, for the year ended December 2024.
Much of this was driven through the personal and private banking (PPB) unit, which “continued to enhance its digital capabilities to provide seamless client experiences and to optimise cost to serve”. As a result, digital transactional volumes increased by 10% and branch transactional volumes declined by 24% “as clients continued to prefer online solutions”.
In turn, the bank saw an 8% growth in net fee and commission revenue.
At group level, total technology function spend in the period stood at R22.4bn, up 2% from R21.92bn spent in the 2023 financial year. Of this, R11.05bn had been spend in the first half.
In SA, 64% of retail transactional clients and 84% of business and commercial clients are digitally active.
Through the introduction of alternate channels for cash transactions and the increased digitisation of branch services, digital sales improved by 22%.
Standard Bank’s mobile app saw a 12% increase in the number of clients using the app in SA and more than 130-million logins per month during 2024, helping to increase in digital revenue from transactional and value-added services by 36%.
The bulk of the bank’s IT spend is on software, cloud and technology, with staff being the other major cost driver.
Like a number of large corporate businesses, the bank has bet big on artificial intelligence (AI) and cloud computing as part of its broader strategy to push digital transformation, improve customer experience and stay competitive.
By moving to the cloud, the bank says it can reduce its infrastructure costs significantly. This allows the group to allocate more resources to other strategic initiatives, such as developing new products. The cloud also provides the bank with the agility to innovate and respond to market changes more quickly.
Software, cloud and technology-related costs increased by 3% to R12.7bn due to contractual increases on software services, client platforms, cloud subscription costs, and an increased usage of cloud applications to support security and the stability of client platforms.
According to Jorg Fischer, chief information officer at Standard Bank, “the scalability of cloud computing allows us to expand our operations quickly and efficiently”.
“This is particularly important in a dynamic market where customer demands, and regulatory requirements are constantly changing. The flexibility of the cloud enables us to adapt to these changes without significant disruptions to our operations,” he said.
While cloud is the way of the future, Standard Bank continues to invest in its mainframe systems. The bank argues that this helps to maintain a “balanced and resilient technology infrastructure”. By investing in both, the blue bank hopes this will keep its infrastructure running robustly, reducing the risk of downtime and supporting its business needs.
Staying ahead and current with technology trend is a worthy ambition, but Standard Bank has faced backlash in the past when its systems have not delivered, resulting in downtime and breaches.
As such, reliability is top of mind the bank.
“The stability, security and speed of our information technology systems is central to our ability to deliver against our purpose and strategy. The risk of recurring unavailability of digital services erodes our client’s trust in the ‘always on, always secure’ promise that is core to our platform business value proposition. Outages cause inconvenience and frustration for our clients and impact negatively on our brand and reputation”.
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