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The most radical single action of a SA bank in decades



OPINION

  • Standard Bank closes more than 90 branches.
  • Banks have been creating jobs for years.
  • Industry falls are a global reality consumer banking behavior is changing.

Of the five largest retail banks, only Capitec appears to be actively growing branches and staff. Her peers go from freezing posts to probably the most radical single action of a banking group in decades: Standard Bank announcing that it will close 91 of the approximately 630 odd branches by the end of June.

Some 1,200 people could lose their jobs and – in a sector that is shrinking in the face of technology-driven people – new banking companies are unlikely to find much work.

Read: SA bosses! Here's a radical idea: be nice

The difference between Capitec and the more established players is that, like the new generations of start-ups, they have built new technology from the start, making customer acquisition and onboarding (which is a terrible word) faster and easier than at other companies.

For example, in January Capitec registered its highest number of new accounts ever in one month: 268,000. However, Capitec also sees digital conversion, with 4 out of 10 customers executing transactions via the app. Nevertheless, it has a considerable network of 800 branches and has given no indication whatsoever that it intends to reduce that number.

When this week the question was asked whether branches would be a remnant of the last ten years, Standard Bank CEO Sim Tshabalala took advantage of this opportunity, but would not be drawn about how they would be staffed or how many there would be.

The pressure builds on banks that are struggling not only to convert the technology they use, but also to adapt business models to a fast-growing, technically educated millennium generation happier than their parents to sign up for digital financial services and Products.

It is a global trend.

Last year it emerged that the United Kingdom has lost two thirds of its offices for more than 30 years. According to British parliamentary records, there were 20,583 branches in 1988. Today, only about 7,500 are left.

In the US, branch closures have increased every year over the past seven years, with a record of 1,947 ending last year.

In recent years, SA banks have frozen quietly frozen posts and reduced their numbers.

The transparency of Standard Bank around this austerity round suggests that the rest of the sector will do the same.

They will have little choice, as consumer preferences clearly show that they are looking for banking that is easier, better and yes, faster than ever.

Bruce Whitfield is a multi-platform award winning financial journalist and broadcaster.

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