With the youth being the most vulnerable in the South African labour market as the unemployment rate amongst this age group was 55.2% in the first quarter of 2019 and the declining business confidence. The announcement comes at a increasing frequency as the largest banks are quietly cutting staff , particularly in retail units.
The banks decision is based on changing needs and rapid adoption of digital banking options by its customers. Standard bank explains that the visits to its branches have declined on an average by 25%,the bank deems its new digital banking delivery model more affordable and accessible. 27 branches around the Northern Cape will be shutting down soon, South African lenders are grappling with a stagnant economy where consumers have reined in borrowing amid high debt levels and other strains on their income. Majority of the branches due to close will shut by June 2019.
Nedbank reduced it’s headcount by 698 last year, largely through natural attrition. At the end of December this unit had 19 545 employees and has closed down 18 branches. Previously the bank said software robots could replace up to 3000 jobs through natural attrition.
Absa started with its top management and is working it’s way across the corporation as it cuts costs and reorganizes to compete aggressively with other established banks.
With the fourth industrial revolution waving it’s mighty hand,robots would take 30% of global banking jobs within 5 years.
As South Africa’s banking sector becomes increasingly competitive with one new rival Tymebank which launched in February, pitching it’s fees so low that one wonders how it will make money. It’s chief executive Sandpile Shabala claims Tymebank is 50% cheaper than any bank.
The bank aims to disrupt the sector by offering cheaper banking combined with the use data analytics and customer education to build up it’s base as it’s targeting the underbank. Tymebank does not have physical branches,it uses kiosks at 500 Pick’n pay and Box stores where clients are able to set up their accounts with FICA accreditation. The bank says the process takes just 5 minutes and people can transfer money at these kiosks although they are not ATM’s.