At a time when serious questions are being raised internationally over governance in South Africa, the financial services sector is proving to be as strong as ever. JSE CEO Nicky Newton-King tells us why it can set a shining example to the rest of the country’s economy.
Leading by Example
In South Africa the financial services sector is leading by example, which is why it is the shining light within our diversified economy. It is driven by the latest technologies and understands it is the only way to move forward in the fourth industrial revolution. The sector set the bar and is keeping it there, making sure that others know that anything less is unacceptable.
I think the financial sector and financial markets have an example role to play, specifically when it comes to access to capital. The JSE, for example, needs to make businesses ask “how can we open this market up to the smaller guys?”
Our democracy is loud and our people know their rights. South Africans have created dramatic political change without a lot of violence or riots. All our different cultures are living and working together, talking openly about the challenges we face and how we can move on from a terrible past. There is so much hope and opportunity here, and South Africans are not afraid to voice their opinions and stand their ground.
Any stock exchange is at the centre of a country’s market, and a stable, well-regulated and well-managed exchange is absolutely crucial for any country and its economy. Therefore our role as the JSE is to make sure that any and all capital markets we manage are done in such a manner that it benefits our local and international stakeholders. It is a critical role, and one we take extremely seriously.
I have gotten some very interesting and amazing compliments from people about the general energy here, which I think attests to our work. People often say that there is a certain energy here at the JSE that looks like we got it right, that we have what it takes. You go faster if you have some energy, and I think we do put a sparkle in our employees’ eyes that make them want to do the best they can do and want to go the extra mile; and that is what, I think, gives the ability to do anything and to help improve South Africa.
Embracing technological advances
All exchanges of meaning, today, are done so through a technological means. It means that we can offer the access to capital, information to investors, and any updates through a digital platform. Therefore we need robust, industrial strength and high-speed internet connection and technological facilities which can maintain what we do. It is very important that all businesses realise that.
We continually update the systems we have, and I do believe that the next steps regarding technology are in the post-investment processes. We need to start educating our investors on new processes and – very importantly – we need to start using technology for financial education and to start closing the financial inequality gap.
It is very easy to educate people on sophisticated financial services and products, but we need to educate those South Africans who do not know or understand why you need to have a savings account or what your debit or credit card can really do for you.
South Africa is a world class emerging market. It does have its noise and challenges, such as social inclusion and growth. However, we have world class institutions, leadership and people.
The JSE is here to be a trusted, world-class leader and regulator and we have the things and individuals to do it. I believe that many institutions in South Africa have the same and can do the same. The roadshows we have done have been very successful and through them, institutions have been getting the recognition for the positive things they have done. This has been a long time coming, and I am very happy that we have been able to make that happen.
Looking forward not back
Many people within the country as well as outside focus on the past; it is true that we cannot look to our future without looking at the past, but we also need to understand that we need to – at some point – leave the past where it is and continue to move forward.
While we face some challenges, South Africa has strong institutions, hard workers and positive leaders. The systems we have in place keeps us moving forward, which is important. The country is the springboard into Africa, and investors can be sure of great returns.
At the WEF Davos in 2016 we were recognised as having the second most well-governed and transparent financial services system in the world. This shows an international investor that even if you are the in the most southern part of Africa, you can still be world class. An international investor will never have to worry about the regulatory environment, protection, or the technology used when they are investing through the JSE.
The only thing they will have to think about is whether or not they like the investment they are putting their money into. Being world-class is in our DNA and we have worked very hard to continually rework and improve our DNA to make every aspect of what we do seem that way.
This is a forever journey; you continually compete with other markets, especially those markets at home and the last we want an investor to say that is it because of the exchange that they are not putting their money in South Africa.