EXCLUSIVE: “Standing on a platform for growth’ – Portia Matsena, BankServAfrica in ‘The Paytech Magazine’
Africa wasn’t alone in seeing economic progress set back by COVID-19 and now by Russia’s invasion of Ukraine. But BankServAfrica is pressing on with a programme that promises to lift it out of the doldrums, says Portia Matsena
BankservAfrica, the continent’s largest automated clearing house, is marking its 50th anniversary year by accelerating the drive to build a platform economy.Wholly owned by five South African commercial banks – Firstrand, Nedbank, Standard Bank of South Africa, ABSA Bank and the Dandyshelf Group – it is South Africa’s official payment systems operator (PSO), processing billions of payments annually involving trillions of South African rand. Based in Johannesburg, the organisation’s operations, however, are not confined to its home country.
BankservAfrica is already a key player in the Southern African Development Community (SADC), enabling interoperability in the region through its specialist regional clearing house (RCH).Beyond Southern Africa, its retail and card payment systems are well-established in the Democratic Republic of Congo, among other countries, and it regularly meets with key payments stakeholders across East, West and Central Africa to help usher in the continent’s new era of a hyper-connected financial markets infrastructure.The importance of adopting a payments platform to enable better delivery of financial services – part of the BankservAfrica 2.0 strategy – cannot be underestimated.
It is one of the central pillars of the South African government’s National Development Plan to help improve financial inclusion for the country’s millions of unbanked or underbanked – a move a widely regarded as a key trigger for economic development. And there is a desperate need for that: South Africa’s already weak economy was plunged into further distress by the COVID-19 pandemic, with worsening unemployment and reduced economic output. Indeed, latest statistics show that, in the fourth quarter of 2021, the country’s unemployment rate reached 35.3 per cent – the highest since the quarterly labour force survey started in 2008. Official estimates show an economic growth rate of only 2.1 per cent in 2022, far below what experts say is needed to make meaningful progress in reducing unemployment and poverty, and not helped by the global economic stress caused by Russia’s invasion of Ukraine.Against that backdrop, BankservAfrica’s infrastructure renewal modernisation programme, a critical enabler for BankservAfrica 2.0, is making solid gains.
The target state of BankservAfrica 2.0 is a fully interoperable, Cloud-ready orchestration platform, enabling a better delivery of financial services. As a technology platform, BankservAfrica 2.0 promises to be highly automated, extensible, and scalable on-demand, easily accessible to authorised participants through standardised APIs, with guaranteed, always-on availability. And, as a business, it says is ‘partnership-focussed, innovation-centric, and data-driven. We are structured around best-in-class teams of self-directed, high-performing
professionals, supported by clear procedures and standards’. Cloud computing is one of the critical enablers in the first stage of the BankservAfrica 2.0 strategy. But there are others. The country’s Rapid Payments Programme, will see transactions cleared on an immediate basis (TCIB) for enabling cross-border payments in SADC and beyond. There is also a digital identity programme, a multi-industry-endorsed initiative to create one scheme for digital identity in South Africa. This, it is hoped, will enable validation, trust and interoperability for the country, as well as drive financial inclusion and give the unbanked access to financial products and services.
Here, Portia Matsena, BankservAfrica’s chief information officer, answers some key questions.
THE PAYTECH MAGAZINE: How have payments and customer demands changed in South Africa over the last couple of years?
PORTIA MATSENA: If you look at BankservAfrica 1.0, we were more of a back office, just a processing house, but the landscape has changed. And, if you look at what has driven the landscape, COVID has changed how we do business and also how we do a lot of things in the payments industry.So, if you look at government, it had to subsidise a lot of people, due to the COVID experience that we had, and that increased payment volumes. The COVID
relief grant was among several activities to support people who were hard hit by COVID, which led to increasing transaction volumes. That changed the landscape because we needed to respond differently to what we had known, and led to the adoption of BankservAfrica 2.0 for us in the payments space.As well as customer demands, there is also competition. I mean, you have fintechs that are not regulated as rigorously as us, and they are able to come up with solutions that enable them to respond easier to the customers we are trying to serve, and that’s putting a lot of pressure on us.As a result, we have looked into how we can bring everyone into this ecosystem.
The financial ecosystem should be inclusive and, hence, we have adopted the Rapid Payments Programme and, as BankservAfrica 2.0, we’re building a platform to bring in different kinds of players within ecosystems, to be able to harmonise all of the solutions that are coming into the space.
TPM: How is BankservAfrica changing to meet the challenges of these new demands and expectations?
PM: BankservAfrica 2.0 is all about innovation. It’s about being able to respond to the client easily, in an agile way, swiftly, and also being trusted by the organisation. It’s about being the leader in the payment settlement house, leading the industry, and coming up with solutions that can respond to the ecosystem without compromising anyone participating in it. And when you’re talking about futureproofing, you need to be a trusted brand. With trust, comes a lot of things.
Firstly, when customers trust you as a brand, they trust your product, they trust that you are able to give them something they can depend on, which is able to run their product. We are talking security, we are talking availability, we are talking agility. Those are the elements I always have to make sure are embedded within any solutions I deploy within the BankServAfrica 2.0 environment.
TPM: In what way is Cloud technology a gateway to innovation in finance?
PM: We cannot ignore the fact that Cloud is a new way of doing things. But, again, you look into the space we operate in, and we are driven by the regulator. We are operating regulated products and unregulated products and, at the same time, we find ourselves having to respond to legislation. As much as we would want to adopt Cloud solutions, we also need to consider what the regulator is saying. But we cannot ignore the fact that Cloud is the way to go. We have now come up with a Cloud strategy that has been approved by the regulator and we are looking into migrating most of our products to the Cloud, because we recognise that we cannot continue as is, with the current technology, and achieve our goal of being the leader within the industry.
Banks are ahead of us in terms of migrating most of their products to the Cloud, but, again, they still have those legacy products that are hosted on-premise.However, our current infrastructure refresh project is a way for us to be able to move to the Cloud environment, knowing we have made sure that whatever we bring in is Cloud-ready. It’s not easy to move from legacy straight to the Cloud, you need a transition plan, and ours, with our infrastructure refresh project, was to ensure we can migrate with ease.
TPM: What is the future for payments in South Africa?
PM: It’s going to be inclusive. BankservAfrica 2.0 is about trying to achieve that for the country. It’s bigger than us. We’re responding to a national call to bring everyone into the system. BankservAfrica is the nerve centre for ensuring financial inclusion.