The uncertainty brought by a rapidly changing technological landscape has led Sasfin Bank to establish a Digital Advisory Council that will provide the financial services sector with insights on how to cope with increasing levels of ‘disruption’.
The council, led by Arthur Goldstuck, founder of high-tech research consultancy World Wide Worx, says a lot of predictions have been made about how technology will affect the financial sector, but there is no way to rank them in order of importance or to assess them accumulatively. “The council will in a sense formalise these predictions. It will create a map of where the market is going.”
The team appointed to the council is being selected for the breadth and range of knowledge they will bring to the table, with further appointments to be announced soon. There will also be room for the council to co-opt specialist expertise as and when required.
The establishment of the entity comes as a convergence of technologies such as smartphones, high-speed broadband and cloud computing has enabled companies like Uber and Airbnb to upend long-standing business models.
These upstarts were able to cost-effectively use technology to enter markets and challenge businesses that never thought they would be threatened by firms on the other side of the globe.
Although financial services are heavily dependent on technology, and even though firms are increasingly offering innovative products, there is still a danger the sector may miss an important shift, notes Sasfin CEO Michael Sassoon. “We are quite nervous of echo chambers.”
Having outsiders in the “think tank” will also help the sector to confront challenges it might not want to face up to. “Big businesses tend to struggle to disrupt themselves,” Sassoon says.
He believes this reluctance is understandable because people are being asked to give up a business model that is working for something that has yet to prove its self.
News of the formation of the council came just a day after Facebook announced that it was planning to launch its own cryptocurrency, Libra. The social media giant says it wants to enable people to make payments and send money at almost zero cost.
The move by a growing range of businesses, many of which have never offered a financial service, into the sector is also a reason for the creation of the council. With a social media company becoming a payment provider and supermarkets offering remittance services, figuring out what constitutes a financial service company is not easy. “The financial service sector is not the same creature it was in the past,” says Goldstuck.
Sassoon says there is a growing global trend for traditional financial service companies to start working with businesses they would never have considered partnering with in the past.
He says this can be seen in Sasfin taking a stake in online small business lender Payabill, as well as its recent announcement of a partnership with Hello Paisa to offer banking to the unbanked.
Goldstuck says the plan is for the council to meet once every three months.