In race to digitize, skills gap a drag on South Africa's big banks
Reuters
Published Jun 14, 2019 07:09AM ET
In race to digitize, skills gap a drag on South Africa's big banks
By Emma Rumney and Naledi Mashishi
JOHANNESBURG (Reuters) - A severe shortage of computer skills in South Africa has left its major banks fighting over a limited pool of people with the skills they need to upgrade technology platforms and keep pace with changing customer demands and competition from new rivals.
The country's four biggest lenders - Absa, Standard Bank, Nedbank and FirstRand - told Reuters it was hard to access the skills they need to rapidly digitize - a response to growing demand for online and mobile banking and the arrival of a host of digital-only banks trying to steal their customers with slick apps and cut-price fees.
All four said they had taken a number of measures to address the shortage, including changing their hiring strategies, implementing for example 'speed dating' style events where large numbers of candidates undergo short interviews in one go, and developing training programs.
But in some cases lenders said it still took months to hire and they were paying ever-rising salaries to win talent.
The problem is particularly acute for positions that did not exist just a few years ago, such as cloud engineers, said Standard Bank Group Chief Information Officer Alpheus Mangale.
In September last year, he said the bank wanted to hire 12 such engineers to make sure its cloud systems were up and running and look after their day-to-day upkeep.
"We are probably at about 40 percent of that, because the skills just don't exist ... in the market," he said.
Banks can expect to pay a 20-30% premium when they do find such skills, he added.
Specialist recruitment agency Acuity Consultants said salaries for software developers had also leapt by up to 30% over the past year.
Thando Lukhele, a divisional executive in Nedbank's group technology division, also said it could take months to fill roles and the bank paid extra for new hirings. Absa and FirstRand's retail unit cited similar problems.
The banks' issues highlight how the skills shortage is complicating some of South Africa's largest companies' ability to compete, making adapting to technological and market changes more time-consuming and costly.
Such skills are in short supply globally, and McKinsey has estimated demand for technological skills will rise by 55% by 2030 based on analysis focusing on the United States and Western Europe.
But Yossi Hasson, a co-founder at non-profit technology school WeThinkCode_, said the issue was magnified in South Africa by problems in public education, limited access to the internet and computers and the fact that those with skills are often taken overseas by global companies.
The banks, many of which sponsor WeThinkCode_ alongside companies ranging from news organizations to Nandos, have tried a range of other steps to attract or develop talent.
Get The News You Want
Standard Bank's Mangale said it had created training programs with Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT), as well as internal programs and partnerships with universities or technical schools and initiatives to retrain existing staff.
The bank, he said, had decided it should not rely on other institutions to create skills whose presence was increasingly becoming make or break for companies of all sectors:
"The use of technology, and how you leverage all the emerging tech ... is really at the heart of how organizations will win or lose in the market."
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.