Idea Storm Blog: Design Thinking and Financial Services in South Africa



In this blog I wanted to research how Design Thinking was being used in Financial Services in South Africa and the general state of the industry heading into 2018.

There are a great many Design Thinking companies in South Africa, including my own, that offer facilitation and training to financial services. I haven’t included any of them in this blog but just focused on the financial services companies themselves.

South African banks profitable and cautiously optimistic

In 2017 PWC produced a paper titled “Balancing resilience and growth – South Africa – Major banks analysis”.

Here are two extracts from this paper:

Despite the range of challenges and the degree of policy uncertainty currently facing the South African economy, the domestic banking system remains profitable, well-managed, robustly capitalised, and regulated in line with international best practice.

In the short term the major banks remain cautiously optimistic about their prospects. However, focusing on innovation, investment in technological advances, and executing on their strategies will be critical for the banks to ensure they can mitigate forecast risk and contend with the difficult conditions that are likely to continue for the remainder of 2017,”

PWC – Major Bank Analysis

Four new banking entrants in 2018

2018 is going to herald the arrival of four new banking entrants to South Africa that could shake up the banking industry. These are the first new banks to get licenses since 1999.

TymeDigital is 90% owned by Commonwealth Banks of Australia and 10% by African Rainbow Capital. Tyme plans to target middle class retail and SMME customers through a fully digital offering.

The USP of Discovery Bank will be to take advantage of their large Vitality programme customer base and will focus on mainly high income earners.

PostBank is said to be part of the government’s plans of radical economic transformation and to be a development bank to deal with the market that is not being served at the moment.

The most recent entrant will offer a unique and fresh approach to banking without any legacy systems and will use mobile technology and other innovations to give more financial transparency and control to customers.

What are the major banks doing?

Banks are fighting costs and managing discretionary spend. To this end the PWC report, referenced at the beginning of this blog, states that banks are controlling IT budget increases to around 3,3% - significantly less than our countries inflation rate.

At the same time the major banks also need to invest in new digital, data and automated solutions to respond to heightened customer expectations and build new digital products and channels that are fit for the future and evolving customer needs.

In order to address this innovation needed I would like to highlight two ways they are doing this:

  • Incubators:

Barclays Africa – Rise Cape Town

“The financial services industry is undergoing a paradigm shift and new tech start-ups are challenging traditional business models,” says Ashley Veasey, Chief Information Officer of Barclays Africa.

Nedbank – Launchlab

They help prepare new businesses for Lift-Off.

Rand Merchant Bank – AlphaCode

They are looking for inspired movers and shakers to disrupt the financial services industry.

Standard Bank – The Standard Bank Incubator

They provide business development, acceleration and help with design for entrepreneurs.

  • Design Thinking:

Along with starting incubators major banks are also focusing heavily on design thinking, used for innovation, product design and strategic business thinking.

Some examples of financial services using design thinking:

Discovery Health:

“Design thinking is becoming a critical approach for organisations that want to survive in an environment of high volatility and a massive amount of disruption,” Rob Cowie, head of user experience, design and standards at Discovery Health Systems.

Nedbank Innovators Programme:

The programme will focus on using design-thinking principles to foster digital innovation. It will bring together multi-disciplinary young talent from different industries into one team, empowering them to generate innovative ideas and move into prototyping/production and successful commercialisation.

Standard Bank:

“Design thinking is an approach to innovation that allows us to listen differently. By doing so, we are able to build the right thing to solve customers’ problems, and build it right.” - Farai Madzima - Head of experience design at Standard Bank Group

Conclusion

I hope you found this short blog of interest. If you would like to discuss how Financial Services are using Design Thinking, the services your company offers or the general state of the Financial Services industry, then please leave a comment and we can start a thread going.

Like Rob Cowie, from Discovery Health, I strongly believe that Design Thinking is a vital tool within Financial Services and one that every manager needs to know and use.

To this end Idea Storm offers “Design Thinking for Managers” training that can be catered for the requirements of your company. Please contact us to get more details and how it can work for you.

The views in this article are my own and do not represent the company I work for.

#FinancialServices

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