Banking & Capital Markets: an industry in transformation

"Emerging markets are increasing their global power. Today, emerging markets serve as the world's economic growth engine, and the far-reaching effects of their spectacular rise continue to play out. But their risks are often downplayed. Therefore, taking advantage of emerging-market opportunities requires careful planning." - Emilio Pera, Financial Services Leader

Amid significant, regulatory reform, banks and securities firms are faced with numerous challenges and sweeping changes. How should banks' operating models evolve? Where are the greatest opportunities for growth? What is the most effective way to raise and manage capital? These are some of the questions banks are wrestling with as they seek to comply with new regulations while meeting the reasonable expectations of customers and shareholders.

Industry overview 2012/13

Governance and regulatory framework: Across Africa there is a major focus on improving transparency and strengthening the governance and regulatory framework in the sector. Although few countries have opted to introduce Basel III yet, Basel II is being considered in a number of countries and consolidation in the market could follow as capital requirements are increased in line with new regulations. In South Africa a Twin Peaks regulatory framework will be implemented in the next year.

The Global Regulatory Reform: The Global Regulatory Reform agenda as agreed at the G20 is gaining momentum with South African banks (Africa’s largest banking market, with close on $500bn in assets) having to comply with the Basel III principles and an increased focus on areas like Recovery and Resolution planning (Living Wills), Treating Customers Fairly (TCF) and a renewed focus on executive remuneration.

Innovation: Innovation in technology and specifically mobile banking is becoming critical to future revenue growth. Banks have already had successes in creating new revenue streams by enhancing payments between urban and rural areas (M-PESA in Kenya), and secondly, by creating 24 hour transacting convenience (FNB, South Africa). As mobile penetration increases, and handsets become more sophisticated, the potential for providing financial services to un-banked populace is enormous.

Our credentials

• IFRS conversion projects in Nigeria which includes assisting the Central Bank of Nigeria with their own conversion as well as monitoring progress in the Nigerian banking sector on their behalf.
• Assisted Chinese and Indian banking groups to set up operations in South Africa, which will also be used as a base for growth into the rest of Africa.
• Internal audit and risk management solutions for a major Namibian bank across all jurisdictions in which they operate which incorporates the development of a leading methodology and structure, relevant to their environment.