As foreign investors sometimes struggle to separate the different markets, cultures and practices in Africa’s 54 countries we asked Nedbank’s CEO Mike Brown to outline why South African banking is uniquely placed on the continent.
Where two markets meet
South Africa is a curious and exciting mix of both developed markets and emerging markets. When you look at the country’s banking system, it is very much a developed market system inside an emerging market. So no matter how you look at it, you will find that our system is modern, strongly regulated, well capitalised and liquid. That is something our country can be very proud of.
The only way to look at Africa is as over 50 separate countries. Many people look at it as a holistic homogenous market, which it is not. Although Africa is a difficult market to operate profitably in I believe the best way to look at it is to see the long term growth potential of the continent and to remain realistic. You need to understand that there are going to be lots of bumps in the road and you need to be prepared to deal with bumps and volatility, you’re going to have lots of positive surprises and negative surprises on your journey and that is inherent in dealing with Africa.
Opportunities in the continent
More South African customers are seeking to grow into Africa, so the banks are finding ways to follow them and provide them with appropriate services. From a Nedbank point of view, we think that the only geographic area in the world where we have competitive advantage is on the African continent.
The digital space is definitely a substantial opportunity for innovation. Within the next 10 years retail banking will be almost entirely digital in the way people interact and operate with banks; there are enormous opportunities in that for us. For Nedbank innovation that comes directly from us is important, but we believe it is important to partner with fintechs in order to help accelerate the innovation curve.
If you’re interested in investing, come and have a look for yourself. Speak to people on the ground because there really are significant opportunities. There’s a lot of work to be done and I’m not naïve about or that there are going to be some bumps in the road. However, I am optimistic about the future of our country and I’m particularly optimistic about the future of financial services within our country, given the strength we currently have and the opportunities in the rest of Africa as well as the enormous difficulties that many big financial services companies in the world are facing.