Only when the financial services sector has undergone sufficient transformation to be more fully representative of South Africa’s peoples will entrepreneurship flourish and consumers truly benefit from the full range of services and products the sector provides.
This is the view of Sibongiseni Mbatha, the president of the Association of Black Securities and Investment Professionals (Absip), which promotes black empowerment in the investment industry through a host of interventions, events and development programmes.
“The cornerstone of transformation, as defined in the financial sector charter codes, is financial inclusion,” Mbatha says, “and financial inclusion speaks directly to the man and woman in the street.”
Mbatha says this touches on issues such as banking for the unbanked, opening business-funding opportunities for entrepreneurs and making affordable financial services available to the wider population.
“When the codes of good practice are fully implemented, the man or woman in the street will benefit immensely,” he says.
“Our role as Absip is to influence the pace of transformation in the financial service sector by encouraging professionals who are working in the big corporations to become agents of transformation where they are, and those who are running their own businesses, be they asset management, stockbroking or private equity firms, to be agents of change and transformation. And that has to trickle down to their customers, who are either individuals or businesses. And we’ve seen it happening over the years.”
Mbatha says this is easier to achieve via established networks, such as those of the big banks, which have a branch “in every little town”.
“We want this inclusion to improve from year to year, with people who still can’t access these services being able to access them in the years to come, and we encourage our members and those who support the cause of Absip to follow this incremental approach.”
Mbatha says Absip is active in engaging and collaborating with the big insurance firms and banks that support its cause “in order to move from point A to point B in terms of inclusion”.
And to what extent are people using a wider range of products by, for example, investing rather than just putting money in a bank account?
“We have observed an increase in the use of financial products that are being offered by insurance firms, banks and asset managers. And we look at this information from time to time, as we sit on the financial sector charter council. So we have seen an improvement,” Mbatha says. “However, we do feel we can do much more and at a better pace, because it has been slow. Over the past 23 years, it has been going slow. It improves from year to year, but we want the pace to increase,” he says.
On the tricky topic of government intervention, Mbatha is of the view that regulation should be a last resort in speeding up transformation.
“Where government gets pushed into a corner of having to put regulations in place, it is where they see no movement towards transformation. But that shouldn’t be the first port of call. The financial services sector companies must recognise transformation as a business imperative, and should be transforming on their own, without being pushed from behind by regulation,” Mbatha says.
And have some of them needed to be pushed?
“Some of them need to be given a stimulus, and that’s why we have members of Absip in these organisations, who we then task to push the agenda internally. So yes, they do need a reminder from time to time. Others are leaders in transforming,” Mbatha says.
TACKLING THE CHALLENGES
The Association of Black Securities and Investment Professionals (Absip) recently held the South Africa Financial Service Conference, under the theme “Towards a transformed, inclusive and thriving financial sector by 2022”. The conference aimed to tackle challenges such as inequality, accessibility and the political climate.
The conference reached the following resolutions, among others:
• Through its student chapters and young professional members, to put programmes in place to build a new generation of responsible leaders who understand that transformation needs to happen at all levels and to improve the quality of life for South Africans at the lowest income levels;
• To create and lead programmes to widen the pool of entrants into the financial services sector;
• To encourage all participants in the value-chain to foster transformation through increased allocation to black businesses for the provision of goods and services, and to increase the participation of black financial services firms therein;
• To institute a programme of engagements with financial institutions and policymakers in order to, among other things, unlock access to capital for black-owned businesses, ensure that transformation and inclusivity is brought into all policymaking, identify positions and roles that control true power in the value chain, and seek to ensure that those positions are transformed;
• To assist black firms and professionals to expand and differentiate their value propositions by, among other things, training them in international best practice through Absip’s partnership with international organisations; and
• To achieve the following targets by 2022: between 20% and 50% of investment assets under management being managed by black asset managers, and between 20% and 30% of trade commissions being directed to black stockbrokers.
At the end of the conference, Absip hosted its annual awards ceremony recognising individuals and companies – including asset managers, stockbrokers, retirement funds, investment banks and corporations in or associated with the financial services industry – that best represented transformation in the industry.
Among other Absip initiatives that are bearing fruit on the road to transformation are:
• Bursary programme: launched in 2013, the Absip Bursary aims to help disadvantaged black students pursue careers in the financial services industry;
• Women in Focus programme: to develop and nurture black women to assume senior positions in financial services companies;
• Graduate programme: in association with Fordham University in the United States, to provide graduate and postgraduate courses for its members; and
• Undergraduate programme: to promote career awareness and professional development initiatives among students studying towards careers in the financial services sector, to better prepare them to work in the sector. The Absip student chapter has a presence at 12 universities.