A year of important reflection for SA’s commercial asset finance sector
Digitalisation has not only defined the commercial asset finance (CAF) space this year but will be the dominating characteristic of our business in 2021 and beyond.
A key focus at the beginning of 2020, no one could have predicted just how important digitalisation would be for the business and how much it would contribute to strengthening customer relationships.
Our ongoing digital transformation journey was accelerated by Covid-19 in a similar fashion as many other sectors. The fact that we were not able to meet with our customers physically meant that we had to find alternative ways of engaging with them.
We relied heavily on our digital capabilities to achieve this, through the advanced electronic signing capability launched for the business. Working digitally helped us to engage with more customers than we normally would have done as we were not limited by logistic challenges.
The impacts of a global pandemic, the like of which we have not seen in our lifetime, are far reaching. South Africa is also no exception and the effects of a hard lockdown had impacted all sectors across the country. Restricted trading has impacted key sectors in which we play such as manufacturing, transport, and construction, and while agriculture has shown growth during the lockdown, this is seen in line with normal sector performance.
Some of the assets we finance are largely supplied by manufacturers from across the world. With so many countries still burdened with the virus, and the inability to globally trade as usual, our recovery has, and will still be slow. It’s quite heartening then that 90 percent of all our customers who took up some form of payment holiday have resumed their payments.
Digitalisation has strengthened customer service. Customers are a lot more informed and we've seen the emergence of new digital banks which compete with incumbent banks, such as ourselves.
Digitisation is an important part of our evolution at Standard Bank and we expect the acceleration which we have seen in 2020 to continue next year.
It is an enabler of our strong purpose led strategy to be the leading financial services organisation in, for and across Africa, delivering exceptional client experiences and superior value via digital platforms. Our digital journey places the client at the centre of what we do, without losing our ability to remain a relationship-based business.
Digitisation remains vital to business on the continent, and businesses will likely strive to stay ahead of their competitors in that respect. There are key aspects in the digital transformation journey which will define our sector next year:
Data (Internet of Things): Understanding your customers has never been more crucial than it is now. So business is likely to be centred around data for better customer insights moving forward.
New market entrants/competitors in different markets: We are likely to see more and more business integrate to unfamiliar markets and industries. For example, we have seen a lot of tech companies entering the financing space. This will likely be linked to the data driven generation we live in because, if you understand customers, you can better offer them products that they need, regardless of the traditional industry you operate in.
Global reskilling race: The above-mentioned factors are likely to change the place of work as we know it. As a result, current skills could become redundant. With that said, we are likely to see businesses reskilling the workforce amid the tech world we will be living in.
Future of mobility: We need to stay close to the trends shaping the future of mobility. It is important for asset financiers to assess their business models and ensure that they provide pay for use offerings and capabilities for their customer base. Customers will be making decisions between full cost of ownership and usage-based models. For CAF it will mean we move from being product centric to customer centric (needs). This will result in a massive shift in profit pools for asset financiers.
While customers view us primarily as financiers, we see the Standard Bank group being more than a bank offering a broad spectrum of customer propositions driven by digital transformation in the future.
In understanding customer needs from a commercial asset finance perspective, as well as a general vehicle and asset finance division, it is integral to remember that we are helping customers achieve their dreams, we are partnering with them in growing their businesses, and enabling them to acquire assets for generating revenue.
Our value proposition is built on understanding our customers’ needs and being trusted advisors throughout economic cycles.
Nelisiwe Baloyi, Head: Commercial Asset Finance at Standard Bank South Africa
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