Nic Swingler, Head: Financial Crime Compliance

The potential benefits of using artificial intelligence and data analytics in making banking safer are a constant theme. In reality, however, it is hard to develop the systems and processes required to turn potential benefit into actual benefit.
Absa’s separation from Barclays — a three-year, multibillion rand programme across 12 countries — presented a rare opportunity to do exactly this.

Financial crime is nothing new: It’s been around since the day people stopped bartering and started using gold as a payment system. However, the way in which financial crimes are committed today is much more sophisticated than shaving some gold off a coin to cheat a seller.

The rules sound simple, but in practice it requires the assessment of many hundreds of thousand transactions or customer activities each day.

Money laundering, tax evasion, embezzlement, forgery, counterfeiting, hacking, phishing, vishing and identity theft are just some of the crimes that banks and authorities fight every day and banks’ systems must evolve constantly to remain a step ahead in ensuring that activities are detected and reported to the appropriate authorities.

In fact, the Financial Intelligence Centre Act (Fica) requires that “intermediaries in the financial system must know with whom they are doing business”. Simply put, banks need to know who their customers are, as well as their banking patterns and behaviours.

Strange activity

This goes well beyond just checking a face against an ID document; it also means ensuring that systems can detect “strange” or unusual account activity, such as large sums of money moving around rapidly without an obvious reason.

The rules sound simple, but in practice it requires the assessment of many hundreds of thousand transactions or customer activities each day, just to be compliant.

The traditional way in which to do this is through automated systems, with a set of behavioural rules that flags suspicious or unusual transactions or activities. These flagged transactions are referred to analysts who review the activity more closely.

However, “false positives” are often raised in cases where transactions are flagged but turn out not to be suspicious or unusual, which wastes time and valuable resources. On the other hand, the behavioural rules need to be comprehensive and complete to guard against the risk of not detecting all suspicious or unusual activities.

Absa’s separation from Barclays — which was substantially completed in June after three years — gave us the chance to consider alternative solutions. We implemented a solution which enabled the use of more sophisticated behavioural rules, AI and network analysis, and which could be customised to ensure it was relevant to each of our operations. There were some significant execution challenges but this solution was implemented on time and within budget.

Importantly, we were able to move from just being compliant to becoming more effective at managing financial crime risk. This goes beyond transaction monitoring and knowing our customers, and calls for proactive risk management, data and network analysis as well as investigative and intelligence gathering capabilities. It’s more than just a system or platform; this risk management approach also requires specific human skill sets, which need to work in tandem with the technology solution.

Absa’s separation programme presented us with a rare and valuable opportunity to bring about a step-change in the quality of our financial crime platform and systems.

The solution we implemented allows for customisation of rules, an improved user interface and a more sophisticated ability to design behavioural profiles. It also enabled Absa to add on plug-ins based on data analytics, derived from behaviour, which refined the system’s ability to flag potential financial crime activities.

With the deployment of artificial intelligence tools, we were able to significantly reduce the time spent in assessing alerts and rather re-invest this time in high value risk management activities.

Continuous learning

The system also takes into account customer behaviour, which further improves efficiency and it produces better-quality alerts using a sophisticated behavioural algorithm that continues learning through AI.

Absa’s separation programme presented us with a rare and valuable opportunity to bring about a step-change in the quality of our financial crime platform and systems, which ultimately benefits our stakeholders and customers. And while it doesn’t mean that all risks have been eliminated, our ability to surface and analyse issues has meant that we are better able to manage and mitigate the risks and threats, helping to make Absa a more efficient and a safer bank.

https://techcentral.co.za/how-absa-is-using-ai-to-fight-financial-crime/101647

By Sazini Mojapelo Absa Group Head: Citizenship & Community Investments

Globally, governments, academics, civil society organisations, and businesses are committed to playing their role in realising the United Nations Sustainable Development Goals (SDGs). Plans, strategies, roadmaps, and action plans are being formulated. Seminars are being held; lectures are being staged and SDG content added to courses. Researchers are researching, planners are planning, and teachers are teaching, all mindful and responsive to the science and knowledge ends of the sustainability agenda.

The world however needs to remain true to the intended transformative nature of this agenda. The value of the SDGs and their targets lie in their actual achievement, and success will only be attained with action.

And it is in the action, that Absa believes business can play an important role.  By shifting the emphasis from focus on profit and promises of a brighter future, to actively demonstrating and partaking in how that future is achieved today.

The children’s continent: Investing in Africa’s youth 

There’s a popular Chinese proverb that says “the best time to plant a tree was 20 years ago. The second-best time is now.”

This wisdom also applies when it comes to nurturing future African leaders and investing in the continent’s youth and improving their prospects of employability and entrepreneurship.

Younger populations are usually considered an economic gift for countries. When the share of the working-age population (15 to 64) is larger than the non-working-age share, there is usually a boost in economic productivity, known as the demographic dividend.

This has unfortunately not been the case in Africa, with rising unemployment, limited access to quality education and a gross mismatch between industry needs and the skills being developed. It is now a state of emergency requiring all sectors of society to act.

Africa’s youth dividend continues to grow at an accelerated pace, surpassing Europe and the United States. The average age of an African is 19 years and rapidly getting younger. According to the World Economic Forum, our continent is growing so quickly that by 2050, two in every five children in the world will be born here.

This is going to present a unique challenge. African stateswoman Graça Machel has expressed concern that Africa could become the continent of a billion “angry, underfed, under-educated and under-employed” young people by 2050, unless African governments act to invest in their children.

“Even though our youth have the potential to transform Africa, if neglected, they could exacerbate poverty and inequality while threatening peace, security and prosperity,” said Machel, who also chairs the international board of trustees of the African Child Policy Forum (ACPF).

A future reimagined

While our young and growing population face some of the most complex economic, political, and social challenges in the world, vast resources and largely untapped markets could provide the foundations for a continent-wide renewal.

The SDGs established that young people are a driving force for the required development – but only if they are provided with the skills and opportunities needed to reach their potential, support development and contribute to peace and security.

With a future reimagined, Africa’s youth have the ability to futureproof the continent and leapfrog the Fourth Industrial Revolution (4IR). Young African leaders have a key role to play, as they have the most to lose if solutions are not enacted.

As we take hands to unlock this dividend, we should be inspired and guided by the words of Nelson Mandela: “Education is the most powerful weapon which you can use to change the world.”

It is, however, up to the current generation of governments, private sector businesses and international organisations to ensure that resources are channelled and investment in Africa’s youth is geared at unlocking the demographic dividend.

What is required from the public sector and state actors is to equip the youth to not only obtain quality education, but to tap into this youth dividend. Translating Africa’s increased development potential from the demographic transition into real dividends will require effective and accountable leadership at all levels of society.

It is with this in mind that we have made a very clear commitment to play our role in developing a new generation of accountable, courageous and entrepreneurial young leaders on our continent.

We believe in unlocking possibility, and the top priority for our business is to play a shaping role in society by putting the basic building blocks in place to ensure that Africans, and more precisely young Africans, have the opportunity to reimagine their futures and bring their possibilities to life.

Developing tomorrow’s leaders today

As a proudly African bank with an extensive footprint in 12 African countries and a rich heritage across the continent dating back more than 100 years, Absa believes that we have a critical role to play in developing tomorrow’s leaders today.

One of the most important things that will move this continent forward, is leadership. We have established robust partnerships with several like-minded institutions like the African Leadership University (ALU) and other networks to equip a new generation of African leaders, as it is in the hands of these leaders that Africa will grow and thrive.

But our young people need more than education, they also require critical work, life, business and thinking skills to help them adapt to this rapidly changing world. Following an in-depth analysis of the African operating landscape, we have refocused our education and skills development initiatives and the focal point now rests on preparing young people for the workplace of the future through collaborative partnerships.

This is done with a demand-led approach, and our initiatives support the development of technical, vocational, social and digital skills in line with the requirements of Africa’s key growth sectors.

We offer a curated Absa Fellowship Programme,  focused on developing a cadre of authentic, accountable and ethical future leaders with the potential to play a shaping role in their respective communities on the African continent.

Rapid advances in artificial intelligence (AI), robotics and other emerging technologies are happening in ever-shorter cycles, changing the very nature of the jobs that need to be done and the skills needed to do them.

The Absa Fellowship Programme therefore focuses on supporting students studying towards an undergraduate degree in the study fields of science, technology, engineering, creative arts, humanities, mathematics and digital design/data (STEAHM_D) – all considered critical skills for the growth of a digital economy.

An Absa Fellow is offered a full scholarship, recognising their unique leadership capabilities and competencies. Above all, they also benefit from exposure to a specially curated Leadership Development Programme as well as being mentored by Absa leadership and other industry experts.

Skills to make young people job-ready and employable

We also introduced young people across Africa to our Absa ReadytoWork (R2W) initiative. This is a flagship programme equipping young people with crucial life skills to improve their employability and self-employment prospects, when moving from life at school to entering a new phase of life at work.

We have also just proudly launched the Absa ReadytoWork app, that provides a free training curriculum that covers work, money, people and entrepreneurial skills to help young people transition from the world of education into the world of work. The app also provides a job search functionality and connects young people with each other.

Through the app, young people can:

• Complete the four modules that cover essential money, work, people and entrepreneurial skills.
• Use the CV template to create a CV that will put them head and shoulders above their competition.
•  Search for their dream job by connecting with recruiters via the job’s portal.
• Connect with like-minded individuals on the chat feature.
• Watch insightful webinars by various experts and leaders.

The 548 100 young people, in the African markets where we have a presence, who have completed the Absa R2W programme from 2016 to date, have hugely benefitted from employability skills, work exposure, internships and job placement opportunities.

Also worth noting is Absa’s involvement in assisting the Technical and Vocational Education and Training (TVET) sector to develop mid-level skills and preparing youth for employment, self-employment, and further study.

A skilled workforce, often trained through vocational education, will enhance Africa’s ability to deliver quality goods and services. The sector has the flexibility to offer demand-driven and tailormade occupational programmes (upskilling/reskilling/cross skilling) designed and delivered in partnership with employers.

However, the capacity of the TVET sector to deliver quality programmes responsive to the labour market vary across various markets and our efforts seek to enhance the responsiveness of the sector to accelerate youth transitions into the labour market.

One such an initiative is WeThinkCode, where unemployed youth are trained for entry level jobs as software developers to help them play a meaningful role in the Digital Economy. With a future-forward approach to learning, this programme uses a peer-to-peer style of skills transfer, project-based and blended learning and workplace-based experience.

Another is the general repairer initiative where unemployed youth are trained for entry jobs as general repairers. This is done in collaboration with the property sector; the public TVET college sector; and government. The initiative unlocks demand in the property sector and provides work-readiness training and structured workplace-based learning.

In addition, we are contributing to improving schooling outcomes by supporting the development of an innovative school-based teacher development model.

The model comprises distance learning and ongoing classroom practice support by experienced teachers and psycho-social support by professional mentors. The model is designed to inform the development of an alternative and scalable teacher development model recognised by the Department of Basic Education.

We are here for the ready

Absa has made a very clear commitment to our continent and its youth. We are here for those who are ready to learn, ready to lead, ready to work, grow, change and partner.

Because it’s only when we make sure that “those who are ready” have what they need to start and flourish, do we ensure Africa’s growth and sustainability for the long term. And we need to use our collective bravery, passion and readiness to find creative, ingenious and audacious ways to make all of this possible.

That’s how Africa, its people and Absa will grow, sustainably.

By Shirley Webber; Coverage Head of the Natural Resources Group at Absa

If you were looking for a silver lining during the COVID-19 pandemic and the havoc it has wrecked worldwide, resources and commodities would be it. In fact, resources have performed well during the economic turmoil due to the impact of COVID-19 with gold, for instance, being seen as a safe haven amid the dollar depreciating against most major currencies. Base metals, especially copper, which is often considered a good indicator of the health of the industrial or “real” economy, is trading higher than it was a year ago.

The strength we see in the resources sector comes despite mines in many countries being closed this year for a brief period before being reopened.

Those who follow the oil price will know that its value has more than doubled after its unprecedented sell-off in March 2020. However, whether it will go up or down in the future will depend on several factors, including fuel demand, US crude inventory levels, the weakening dollar, and hurricane season within the oil-producing parts of the United States.

The diamond market was expected to recover during the first quarter, as the midstream sector reduced its stock holding, activity retrieved in the first two months of the year, and prices gained compared with 2019 levels. However, the recovery was short-lived as the spread of COVID-19 and the potential decline in global retail growth led to a significant decline in producer sales. As a result, the industry effectively came to a halt, and with the retail market slowly opening in the US and China, recovery is expected by mid-2021.

With the exception of diamonds, the resources sector can help pull Africa out of the COVID-19-induced slump as the entire ecosystem will reap the rewards of increased economic activity. In addition, greenfield mining projects are a major catalyst for surrounding communities in job creation and supporting small businesses.

A combination of slowly improving oil prices, recent discoveries, and the push towards use of gas as an environmentally friendly energy source contributes to the renewed investor interest in the oil and gas sector on the continent. Africa is one of the leading regions in terms of oil and gas discoveries, including the considerable gas reserves found in Mozambique, Mauritania, and Senegal, all of which will significantly meet the growing demand for gas globally.

The resources sector has experienced an increase in negative investor sentiment over the past few years because of rising production costs, infrastructural challenges, electricity supply constraints, increasing environmental, social, and governance standards, and political and economic instability in certain regions. Despite this, interest in the resources sector across Africa is picking up once again.

This renewed interest is potentially great news for the African continent, which holds over 30% of the world’s remaining mineral reserves and increasing finds of reserves of oil and gas. All these factors place business leaders under unyielding pressure to deliver superior returns to stakeholders.

Front-of-mind for all investors is a stable political and regulatory environment. One of the positives Absa noted at the Mining Indaba earlier this year was Africa’s positive strides in this regard.

Issues such as climate change are no longer “soft” issues that can be tucked away in a sustainability report somewhere. Shareholders and other stakeholders are demanding that the banking sector adopt a responsible approach to funding new projects, which is driving a change in behaviour for all sector participants. The question will remain whether the industry is doing enough regarding carbon emissions to meet the goals of the Paris Agreement on climate change and its deliverables.

Developing an indigenous resources service sector can be challenging because it is capital intensive. To address some of these challenges, there is a need for international companies to partner with local companies to raise the required capital and in-country capacity building and training. The fiscal framework must also be fair and transparent.

In addition, although mining operations across the continent are becoming more sensitive to the role they play in ensuring economic growth and sustainability, Absa as funding partners help in ensuring sustainability too. We do this through site audits and visits because we believe that sustainability should not be dismissed as a “nice-to-have” but is instead a critical part of the funding journey. We are already seeing shareholder activists pushing back against projects that don’t consider environmental and sustainability-related issues.

Ultimately, all the resources sector participants will need to recognise that the sector can no longer be open to exploitation. As a funding partner, Absa is committed to working with organisations who share our values and are prepared to invest responsibly throughout the value chain. As Absa, we see ourselves as a natural partner to clients active across Africa’s natural resources and energy value chain.

By Dr Lesego Rametsi, Group Head Of Health & Wellness

All doctors can vividly remember two moments in their careers: the first baby they delivered and their first patient that died. I am starting to believe that all of us living through this pandemic will add COVID-19 to their notable and most memorable career moments.

At the beginning of March, who could have imagined the way we are living and working now? Who would have imagined we would be homeschooling our children and that businesses, shopping malls and restaurants would completely shut down in an effort to curb the spread of a deadly virus?

As the Group Head of Health and Wellness, I sit on Absa’s multi-disciplinary task team that is coordinating our organisation’s response to this pandemic. As we work, I have been reflecting on my responsibility to my colleagues during this time, not only as a medical doctor, but as a fellow colleague who recognises my service to the greater society.

In African cultures, community is an integral part of our existence and the people around us are essential to our concept of ourselves. In a public health context, this is also true. Touch provides reassurance and comfort to a sick person that they are not alone; we remain connected and able to provide care.

The COVID-19 outbreak has done more than threaten and affect our health. It has disrupted our lifestyles, put strain on our mental health and personal relationships, wreaked havoc on economies and set the course for a new way of living and working.

It has been months since it was first reported, and there is a lot that we still need to learn about COVID-19. We know that people can easily catch the virus from an infected person and that about one in five people who catch the virus require hospital care. We also know that in the absence of a vaccine, our biggest priority right now is to save lives by slowing the spread of COVID-19, to avoid overwhelming clinics and hospitals with too many patients. At present, the most effective way to prevent infection is through social distancing and the return of concepts familiar from our childhoods.

Who among us didn’t have older relatives who constantly reminded you to wash your hands when you came inside or prepared to eat? Or to cover your mouth when coughing, or stop touching your noses, or rubbing your eyes with dirty hands? Similarly, I cannot remember a time when I was not made aware of the need to care for others as well as myself. The vast majority of us that remain healthy are extraordinarily thankful for our good health right now. We also acknowledge how much our health depends on the health and wellbeing of our families and communities and we have to do whatever is required to not get infected or spread the infection.

But what exactly does this mean?

By the time you read this, many countries would either be under lockdown or emerging from a lockdown with restricted social movement.

For many of us, this period has indicated a frightening loss of power. In these uncertain times, it’s important to focus on what we know and can control. This means avoiding the spread of misinformation or fake news, relying on credible medical and healthcare sources for information and adjusting our behaviour to protect ourselves and others.

We cannot stop COVID-19 immediately – all we can do is try to slow it down and see this play out. Globally, there is an urgent effort being made to avoid the devastating scale of infections and fatalities through the observance of social distancing and enhanced hygiene protocols, and to find a vaccine. While individual actions matter, we have to take collective action to contain the disease. Every one of us, wherever we live and work, whatever we earn and believe, must act to stop this virus and influence those within our social circles to do the same.

My hope is that beyond the immediate crisis, we will reflect more deeply on the importance of good health, wellness, sustainable living, and showing care and compassion for one another. In addition, I hope that we learn to be proactive in preventing infection rather than curing disease. We need to guard our bodies and our minds: eat well, rest and look after our physical and mental health. Lean on your families and friends. We will need exceptional resilience during this time, as we re-learn how to engage and adjust to our new way of living.

Even pandemics pass. Let’s continue with acts of service, care and compassion to one another. Let’s use the time available to minimise the effects and care for ourselves and one another in every way possible. One day, we may look back on this crisis as the catalyst for a stronger focus on health and wellness and sustainable living.

Until then, ask yourself: am I doing enough to flatten this curve and limit the possibility of infection? Am I playing my part? I hope so.

Stay safe. Stay informed. Stay home.

Ina Steyn, Absa Group’s Head of Resilience

“Business resilience is now more important than ever before,” says Ina Steyn, Absa Group’s Head of Resilience. “There are so many good stories of how collaboration allowed us to respond to this unprecedented pandemic, over the past couple of months.”

What is business resilience?

A business is resilient when it is prepared and equipped to manage unexpected disruptions to its operations, ensuring continuity for its people and customers. Today, our interconnected world – with its increasingly complex global value chains, frequent natural disasters and rapidly advancing technology – faces a set of new and diverse risks to business continuity.

The new COVID-19 pandemic is an extreme example: a highly infectious pandemic that has massively disrupted global demand and supply. In the past few months, businesses have been forced to switch to remote working. While business leaders across the globe have scrambled to keep in touch with one another and employees remotely, employees have had to figure out how to work from their homes, with their children home from school, internet connectivity issues and limited external supplies. In this context, a clear resilience plan is priceless.

Building Absa’s resilience

Over the past few years, Absa’s resilience team has been building its capabilities and skills, fit for the African Continent. Between the 20 strong team they have more than 100 years of business continuity management experience, and all are accredited members of the Business Continuity Institute.

This experience is supported by the strong relationships developed with senior leaders, business units and other functions across the organization and the continent.

Responding to COVID-19

McKinsey advises that, in a crisis, organisations should appoint a small, cross-functional team that is headed by a respected and experienced internal leader to manage responses from the organisation and stakeholders. But COVID-19 represents a more complex, deeper crisis than the usual reputational problem. It requires coordination not only across the organisation but also across the industry with the Banking Association South Africa, regulators at the South African Reserve Bank and Prudential Authority, government, the National Institute for Communicable Diseases and other stakeholders, such as customers, suppliers and investors.

Regardless of this pandemic, the bank is an essential service that needs to continue operating, which means protecting frontline colleagues and enabling others to work from home. To manage this complexity, it requires cross functional teams to focus on solving problems and making decisions.

This combination of flexibility, cross-functional expertise and leadership support has encouraged a bold, speedy response.

Executing beyond expectations

It’s easy for a crisis of this scale to overwhelm. There’s no previous case study to learn from – nothing like this has happened in modern business history. A resilience team has to be prepared for events like protest marches and drought – not a global pandemic. In this situation, Ina says that collaboration is paramount to keeping the business running smoothly.

“This incident proves that, regardless of your business model, it requires teamwork. Every member of the resilience team and partner in the business has pulled their weight, showing dedicated focus on doing what needs to be done. It’s something to be proud of.” It is one thing to plan for a scenario and quite another to put these resilience plans into effect. Yet, considering the circumstances, the transition to remote working during lockdown in South Africa has been remarkably smooth. Absa’s virtual private network effectively hosts thousands of remote employees at a time.

Without calm, committed teamwork, an effective response to this pandemic would not have been possible. “Ina is understandably proud of the results. “What doesn’t break you makes you stronger”.

“A disaster is something like having to change engines mid-flight – that’s essentially what we’ve done here.”

By Dr Roze Phillips, Group Executive for People and Culture at Absa

Remote working has been a consistent trend for some time now. In response to COVID-19, organisations have been forced to immediately develop or improve remote work policies and procedures. This has proven challenging for many businesses, especially when it comes to IT infrastructure, devices, cybersecurity and productivity.

Beyond that, though, how do these forces enable leaders – especially people leaders like human resources (HR) practitioners – to continue harnessing the full potential of people to sustain businesses and economies? Nothing will be the same again and, as such, the future of work is being rewritten; workplaces will need to be reconfigured to accommodate social distancing and other organisational shifts. Essentially, business models must adapt and adapt quickly. The question is – how should companies respond? At Absa, we’ve centred our response on protecting and empowering our people.

One of the biggest lessons during this “next normal” phase is that, to thrive, we have to learn to unlearn and then relearn. This simply means that we must break our attachment to past behaviours and lifestyles – anything that lulls us into a sense of familiarity and makes us resistant to change.

For many, remote working happened overnight, with little warning or preparation. Our business was already on a path of digital transformation, which would include remote and flexible work. Nevertheless, nothing could have prepared any of us for the onslaught of remote meetings and working from our intimate living spaces.

COVID-19 is the Great Amplifier: if something was cracked before, it is broken now. Much like the virus compromises the human body, so it has revealed the compromised state of our business models. Companies with flat structures and reduced bureaucracy have benefited from the agility of an empowered workforce. Command and control-style businesses have and will continue to struggle.

So, what is the holy grail of remote working?

Absa is focusing on three fundamentals that we believe will empower us to bring possibilities to life for our customers and our people. Our first foray into a remote work strategy emerged from a wellbeing strategy: keeping our employees safe and secure is key to protecting them and the communities we serve.

Leadership matters

History repeatedly shows that leaders – with or without titles – rise like steam during the heat of crises. The secret to successful remote work is not Microsoft Teams or Zoom: it is leadership – responsive, responsible and response –abled leadership.

In a time of disruption, the human need for ethical and compassionate leadership remains constant. Myriad emotions are invoked as we traverse our adapted working terrain – whether it is juggling schoolwork and phone calls, navigating our new “stuck in traffic” (also known as intermittent or non-existent Wi-Fi), or adapting to the blurring of work-personal boundaries.

Amid the angst of an artificial intelligence and digital takeover, human intervention is more relevant than ever. This is the moment for our leaders to spotlight the direction we need to take to flow through a new, fluid world of work.

At Absa, we understand that this will be where the gig worker and freelancer are seamlessly integrated into our strategies and structures. We understand that mistakes are inevitable in this type of innovation, but the lessons gained will be even more valuable.

We call on our leaders to entrench our CARE model as we re-energise and invigorate our teams: CONNECT to purpose, ACHIEVE through teams, RECHARGE with relationships and EMPOWER to evolve.

Mental health is workplace wealth

Mental health, as a workplace challenge, has been steadily increasing for many years as employees have struggled to cope with the rising cost of living and the threat of job losses brought on by the Fourth Industrial Revolution and the machine age. In 2019, the World Health Organisation formally recognised burnout as an occupational phenomenon, “a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed”.

Lockdown has obliterated many of our societal norms and coping mechanisms. Coupled with the collective feeling of isolation and decision fatigue – the result of constant high-stakes choices on everything from when or where to shop to sending children back to school – we must all recognise that the next pandemic might well be that of global burnout.  And as people struggle mentally, business decision-making, customer service, innovation and sustainability hangs in the balance.

Human beings are social creatures and, while we may appreciate occasional solitude, we generally do not cope well with loneliness and isolation. We need face-to-face interaction and engagement to thrive – and innovation and progress in any organisation largely depends on collaboration and co-creation. As the lockdown restrictions are lifted, Absa will adopt a more nuanced approach to working remotely.

This forms part of our sustainable Flexible Work Strategy and will allow colleagues and their managers to agree an approach that works best for their team. It will also give us the opportunity to engage with the best talent on new terms, regardless of whether they are employed by us or not.

New talent creates new possibilities

Our human capital is at the heart of everything. It is the core of the Absa ecosystem and the motivator of our shared purpose – to stay healthy, connected, contributing and future-ready as we bring possibilities to life.

What we have realised during this transition is that bringing possibilities to life starts with protecting those possibilities – in other words, our people. HR practitioners and leaders are at the frontline of talent strategy, gracefully walking a fine line between insider and outsider.

It is no surprise that, in recent times, senior leadership has looked to HR to be thoughtful, strategic and well-informed partners. We balance strategy and execution, pairing a deep understanding of our teams’ business challenges with the ability to reframe those challenges through a talent lens. This is critical to our ability to thrive.

Our next normal

As we continuously adjust to the nuances and opportunities presented by remote and flexible working, one thing is certain: this will be our default position. The lack of office space will necessitate it, social distancing will demand it, and investments in advanced digital technologies, infrastructure and collaboration tools will facilitate it.

What may be interpreted as “real estate cost management”, is a definitive people and culture strategy that allows us freedom of choice. It provides the freedom to bring our best selves to work, enabling personalised working solutions that deliver high performance.

So, as the pessimists choose to label 2020 as the year in which the world pressed pause, let us embrace it as the year in which we learned to breathe.

Remote work is not driven by a location strategy, it is powered by a talent strategy. This is how we will reimagine our business and our possibilities.

By Shirley Webber, Head of Natural Resources and Energy, CIB

It could take up to six months for many mining companies to return to normality because of the national shutdown imposed by governments in South Africa and other countries in Africa. While the lockdown has been eased to varying degrees, it will take several months before mines restore full production.

This is because of limitations on the number of miners that can work underground or open cast operations. Some companies must organise for the return of foreign workers who had gone to their homes after operations were stopped due to COVID-19.

The shutdown has also impacted on the liquidity requirements of mining companies and those dependent on a single commodity have been particularly hit hardest. We therefore expect that their short-term liquidity requirements would have increased and will most likely remain under pressure in the next three months.

As the shutdown restrictions are gradually eased, we expect a gradual uptick in production until full output is achieved. But at this rate, we expect mining companies to return to full production over a six-month period.

However, it must be noted that during the shutdown, some mining operations, such as smelting and furnaces, were not completely stopped because operationally it is not possible to stop them without causing significant damage to them.

On commodity prices, we have not seen a significant dip; if anything, commodity prices have been holding up. Naturally, we expect some dips in prices due to the usual demand and supply factors. However, the price of minerals such as gold remain robust and while copper and palladium prices have softened slightly, we still expect a recovery in the short term.

But this does not mean we will not experience volatility in commodity prices over the next three to six months. What is not certain however is the level of volatility as the global economy slowly begins to return to normality post the national shutdowns imposed to control the spread of the Coronavirus.

The irony of the current shutdown is that South African mines have not been able to benefit from the depreciation of the Rand, which would have been beneficial for exports given the current US$/Rand exchange rate. It is therefore a rather unfortunate development that the mines are not in full production given where the local currency is now.

At Absa, we have been having operational discussions with our mining clients on issues such as liquidity support, capex and cost containment. These discussions are necessary so that we can fully understand what the mining companies are facing so that the bank can assist them properly. Such discussions are also important to ensure that we address any questions which may be raised by the credit committee when it considers applications for liquidity support.

We are therefore definitely willing and able to assist mining clients during these difficult and uncertain times facing the country.

By Vimal Kumar – Chief Executive: Retail and Business Banking, Digital and Customer Experience, Absa Regional Operations

The social re-order brought about by the COVID-19 pandemic have generated many learnings, but also still hold a great number of unknowns.

What is clear is that in terms of digital innovation and progress, we have had to compress several years of evolution into a very short space of time as everyone has been forced to adapt to managing businesses remotely and the deployment of new low contact transactional capabilities.

Austrian economist, Joseph Schumpeter, coined the phrase creative destruction, which speaks to the need to constantly destroy what you have created to build a new order– exactly what we are experiencing now.

Business models will begin to alter significantly and become smarter and leaner in order to survive and emerge stronger post-lockdown. For most institutions, this will entail the rethink of distribution structures with a focus on reskilling colleagues to support sales and advisory, while automating backend processes. There will be a fundamental shift to digitally delivered, remote and contactless banking.

What will a post-COVID landscape look like?

The banking and financial services ecosystem, of which Absa forms a major part, is demonstrably part of the solution during and post this pandemic.

During the last global crisis when international financial markets crashed, global financial institutions had been at the heart of the problem, but now banks are seen by regulators and governments as key to providing financial relief and driving economic recovery programmes.

On the transactional front, customers now expect a fully immersive experience and COVID-19 is driving everyone towards a low contact, low touch economy.

Banks that remain within the traditional domain will be pushed to the margins by other competitors, intermediaries and Fintechs who previously may not have had a strong appeal with customers , but who now offer convenient solutions, seamless efficiency and a service experience that is channel agnostic.

The African banking arena will see more non-traditional competitors in financial services such as global e-commerce and tech companies such as Facebook, Alibaba, Tencent etc who will expand their footprint on the continent by deploying their global capabilities and know-how. Mobile Network Operators (MNOs) such as MTN, Vodacom and Airtel are also increasing their appetite to participate in financial services and have the capability to quickly scale up, given their significantly larger customer bases and distribution muscle.

We are moving towards a marketplace environment where various players will be forced to bring their unique solutions to the market- while sourcing other capabilities from elsewhere on behalf of customers. At this point, ownership of the customer will not be the dominant consideration but rather building an ecosystem that puts the customer at the centre.

The ability to exploit big data and digitisation are mere enablers in the new economy; the real differentiator, increasingly, is the ability to hyper personalise the customer experience and provide convenience.

Enhanced customer experience is going to be imperative and the choice of bank for customers will be based purely on maximum convenience – the ability to bank when they want, where they want, and how they want.

How has Absa been able to respond to this fast-changing landscape?

The Separation Programme from Barclays presented Absa with the opportunity to re-examine its technology stacks and architecture. Investment, over the last two to three years, has largely been allocated to technology upgrades, front-end solutions and organisation-wide automation. Our investments, amongst others, include state-of-the art cards and payments platforms, front-end teller system and a new look Mobile Banking app with world class UI/UX built on the Xamarin framework.

Separation prepared Absa to be in a better space today than many others who may have been caught unaware by this global pandemic.

Absa boasts a heritage of global best practice risk management protocols and standards and is now focusing on aligning this with building stronger remote and video-banking capabilities.

Absa’s digital journey will fundamentally create a distinct position for the bank amongst African peers.

How is this achieved?

Absa’s transition to digital came about as a result of the separation from Barclays which, in itself, held tremendous risks because what we managed to successfully complete in 36 months had never been done before, and the scale of it was unprecedented.

But, at the same time, it also created new opportunities for Absa, particularly around the use of big data to build our customer intelligence and ultimately our customer experience offering.

Simply put, utilising data to make informed decisions and do more for customers. Absa has, and will continue to invest heavily in its big data capabilities.

The bank’s digital C360 analytics platform has won significant praise internationally, including two recent awards for the Absa Regional Operations’ (ARO) Data Analytics team, for the 2019 Best Technology Initiative – Rest of the World award at the Financial Innovation Awards, and the 2020 Best use of Analytics in Financial Services at the Retail Banking International Awards.

These investments will allow Absa to hyper-personalise experiences for each customer, using data, so that each individual customer becomes unique and a segment of one for us as a bank.

Our direction of travel is very clear in a landscape with hundreds of competitors. We are building on our capabilities and solutions – even through partnerships and other service providers – and digitising journeys to deliver extraordinary customer experiences.

Ultimately, demanding loyalty is a thing of the past. In the future, banks that are customer service organisations first and foremost, will succeed.

So will that be the end of bank branches and people?

Moving to a leaner model means less back office and more focus on sales and advisory, and branches will transform but will not disappear entirely.

The future is not physical or digital, rather the future is bionic or ‘Phygital’ as the new catch word these days.

An ecosystem will emerge that will see digital experiences completely mimic what a customer would do in a branch. The ultimate aim? A single customer experience that is absolutely uniform and channel agnostic.

A large part of our success lies in taking our colleagues along with us on this journey. Most organisations fail on digital transformation because they do not include people as part of the process, so as we transitioned from Barclays into Absa, we started a cultural change where staff today are as much part of this as anybody else.

By Vimal Kumar, Chief Executive: Retail and Business Banking, Chief Digital Officer and Customer Experience at Absa Regional Operations (ARO)

When a crisis of the magnitude of Covid-19 strikes, it is our role as a responsible lender to put forward various immediate and medium-term solutions to proactively combat the downturn it brings. As an African business, we have sought to position ourselves so that we can offer not just tangible relief in this time of distress and global upheaval, but also true value in an ever-changing world.

For any indebted individual or business, servicing debt during such difficult times is a source of angst. Absa reacted swiftly to the pandemic by designing, offering and implementing smart solutions and offering significant financial respite during these times.

Relief measures have included repayment breaks, moratoriums on capital repayments and the waiver of fees on interbank transfers through internet banking and bank-to-wallet transactions, among others.

A payment holiday – which also defers the tenor of the repayment – is just one option available and is primarily designed to offer immediate relief and ensure a continued cashflow for a household or business facing financial hardship, while at the same time protecting credit worthiness. The option to exercise a payment holiday is a conversation between the customer and the lender based on the profile and individual circumstances of the client.

All of this has been done in consultation with regulators and governments acknowledging that we need to navigate the Covid-19 crisis together.

These solutions have been carefully thought through to assist those most in distress during the initial wave of the Covid-19 economic slowdown. Although we live in an era of social distancing, geographically segregated interaction, and government-enforced lockdowns, our technology and the array of digital products we offer have enabled us to continue to serve all our customers efficiently and effectively.

Leading digitally

It is inevitable that a post-Covid-19 world will see us emerge into a more digitally-driven space. Absa is actively driving the roll-out of digital infrastructure and offering our customers more innovative solutions. Customers can bank in a variety of ways: internet banking, apps, e- and mobile commerce, and contactless payment capabilities.

One of the key pillars of our growth is to build a scalable, digitally-led business. When we launched the new Absa brand across Africa, we spoke about “bringing possibilities to life”, and we are stretching digital boundaries to meet and, indeed, exceed the needs of our clients in a rapidly evolving landscape.

Our digital transformation towards a low-touch, low-contact future is accelerating at a fast pace. In driving this, we will make banking and ways of payment cheaper for all our customers. We are already seeing a massive surge in digital use and pick-up by customers in all our regions, which reinforces our conviction that we are on the right track.

It is increasingly evident that the bank of the future will be known not for the products it sells, but for the creativity, agility and openness to co-creating solutions with clients and partners. Everything we do speaks to our ability to find solutions to our customers’ needs – this is even more relevant at a time when our very concept of ‘normal’ is being challenged and revised constantly.

Support for SMEs

One of the things we are very conscious of is that small and medium enterprises (SMEs) are vital to economic growth across Africa, and we need to support and nurture the entrepreneurial energy and innovation in that sphere. We further recognise that the informal economy needs to be as much protected as the formal economy, because this makes up a large portion of employment in Africa.

Therefore, we ensure that our SMEs and our business banking customers benefit from our relief programmes during these turbulent times as much as our individual customers. There is no doubt that when the time comes to rebuild our economies, SMEs will play a leading role in spurring such efforts.

According to the World Bank, Small and Medium Enterprises (SMEs) play a major role in most economies, particularly in developing countries where SMEs account for the majority of businesses worldwide and are important contributors to job creation and global economic development. SMEs represent about 90% of businesses and more than 50% of employment worldwide, while formal SMEs contribute up to 40% of national income (GDP) in emerging economies. These numbers are significantly higher when informal SMEs are included. https://www.worldbank.org/en/topic/smefinance

Acting responsibly

We have been heartened as a banking institution by the responsible behaviour of many of our customers who have continued to service their debt as their situation allows, which is a very positive story in these uncertain times.

Our customers see us as a bank that is responsible and willing to assist; that offers help when they are truly in need. Yet they have adjusted their thinking and behaviour to the existing environment and are responsibly only calling on us when they really need us.

Absa has a balance sheet in excess of almost R1 trillion and is well-positioned to withstand financial storms, and as a significant bank on the continent, we play a big part in ensuring stability to financial systems, as well as being able to offer clients and customers a reassuring sense of stability and confidence.

But more than what we represent as a continental banking institution, Absa is also Africa, and the essence of caring for others underpins everything we do. Our commitment to helping save lives and contributing meaningfully to the fight against this coronavirus pandemic has seen us make substantial donations to national governments and various Covid-19 relief efforts.

We believe in getting things done, and in helping people find a way to get things done. And in these extraordinary times, we also understand what it means to be African: that our common humanity and our compassion towards one another in the spirit of ubuntu, is what will ultimately carry us through and be the panacea in this fight against this pandemic.