How SA banks are embracing sustainability to drive growth

South African banks are increasingly using digital solutions, technologies and data analytics to personalise offerings and enhance customer experience. According to a new report by Discovery Bank in partnership with Boston Consulting Group (BCG), over 86% of South African bank customers prefer to conduct their day-to-day banking digitally.

A further 60% said they would be comfortable with a completely digital full-spectrum banking offering. The report also found that 69% of South Africans believe that local banks will have transitioned to a fully digital banking experience by 2027.

To fully unlock this potential and provide personalized customer experiences, retail banks need to safeguard and protect data. Data can now be managed throughout its lifecycle so that it is better organised, more accessible and secure.

Sustainability is quickly becoming the next frontier of competitive advantage for banks, as highlighted by the Economist Impact survey. The report stated that sustainability is a top-five business priority for C-Suite executives, alongside digital transformation and cybersecurity.

According to the BCG, introducing environmental, social and governance (ESG)-related products in core business lines could generate substantial revenue for retail banks globally and in South Africa.

A 20% ESG-related share in new retail banking revenues in the next five years, for example, would result in a roughly 10% share of total retail banking revenues, approximately $300 billion, by 2025. To fully unlock this value, retail banks will need to develop strong ESG goals.

Asset lifecycle management (ALM) – the management of IT assets and electronic media throughout their entire lifecycle – is critical to any data security framework in the digital age. Employing services like secure IT asset disposition, including remarketing, recycling and media destruction, can help banks become more sustainable while ensuring data security.

With an increased focus on the circular economy and meeting ESG goals, choosing the right ALM partner is crucial in order to ensure that end-of-life IT assets are managed in a secure, compliant and environmentally friendly manner.

Takalane Khashane, managing director of Iron Mountain South Africa, said, “In this increasingly digital age, data holds the key to meeting customer needs more than ever before by personalising products and services to a customer’s unique profile and behaviour. As data continues to grow in volume, velocity and variety, retail banks need to safeguard and protect it, especially more sensitive customer information.”

“Just as data lies at the heart of the ability to improve the customer experience and tailor banking products and services to fit customer needs, it also underpins strong ESG programmes. It not only enables accurate performance measurement, it creates opportunities to implement more sustainable information management practices within ESG programmes and the broader business.

“There are several benefits, both environmental and commercial, for banks to embed circular principles into their IT asset management practices. Ensuring secure and compliant disposal of all data, being environmentally conscious with retired equipment and creating a culture of sustainability are all critical steps in creating a sustainable banking industry that will stand the test of time.”

The sustainable future of banking is not a distant goal but an immediate reality, believes Khashane. Banks that prioritise sustainability will have the edge and be better placed to create a culture of sustainability while creating revenue opportunities. The future of banking lies in a harmonious marriage between digital technologies and sustainable practices.

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