Future challenges of Capitec and South 
Future challenges of Capitec and South African Industry
The PWC Retail Banking 2020 Report indicated that there are several challenges that banks will face going into the future emanating from Customer expectations, technological capabilities, regulatory requirements, demographics and economic developments. According to the report the challenges will include amongst others:-
The continuous increase in non-traditional competitors such as retailers and mobile service providers offering similar or even better and cheaper services than traditional banking is and will continue to be challenges to the banking industry as banks may find it difficult to attract new or retain existing clients.
The rise and interconnectivity of emerging markets including Africa is a significant opportunity for banks, but the challenge would be the ability to manage banking in high risk African countries. Moving into African markets would require a bank to have a robust risk management strategy.
Rapid expansion in unsecured lending market, despite poor economic outlook, presents a challenge for banking and non-banking competitors in this arena. The unsecured lending space is flooded with many competitors. The future challenge will be how to balance competing successfully by increasing market share and remain relevant in the lending business whilst still not crossing risk line like African bank did. Continued high unemployment rate means fewer clients for banks going forward, as well as inability of client to service debts and this will increase competition amongst the banks.
The lingering possibility of a state owned bank may lead to client migration and this will pose challenge for the existing banks especially if a state owned bank offers cheaper services and lower interest rates. Capitec and other banks will have to be creative on how to retain existing clients and attract new ones with variety on offer.
Majority of rural masses are still unbanked and the challenge to the bank will be
The PWC Retail Banking 2020 Report indicated that there are several challenges that banks will face going into the future emanating from Customer expectations, technological capabilities, regulatory requirements, demographics and economic developments. According to the report the challenges will include amongst others:-
The continuous increase in non-traditional competitors such as retailers and mobile service providers offering similar or even better and cheaper services than traditional banking is and will continue to be challenges to the banking industry as banks may find it difficult to attract new or retain existing clients.
The rise and interconnectivity of emerging markets including Africa is a significant opportunity for banks, but the challenge would be the ability to manage banking in high risk African countries. Moving into African markets would require a bank to have a robust risk management strategy.
Rapid expansion in unsecured lending market, despite poor economic outlook, presents a challenge for banking and non-banking competitors in this arena. The unsecured lending space is flooded with many competitors. The future challenge will be how to balance competing successfully by increasing market share and remain relevant in the lending business whilst still not crossing risk line like African bank did. Continued high unemployment rate means fewer clients for banks going forward, as well as inability of client to service debts and this will increase competition amongst the banks.
The lingering possibility of a state owned bank may lead to client migration and this will pose challenge for the existing banks especially if a state owned bank offers cheaper services and lower interest rates. Capitec and other banks will have to be creative on how to retain existing clients and attract new ones with variety on offer.
Majority of rural masses are still unbanked and the challenge to the bank will be
References: 1) Kitten, T. (2005, May). Reaching the Unbanked: Learning from South Africa’s FIs. Green Sheet, Inc. in Print. 2) Norton 2013 report 3) PWC Retail Banking 2020, Evolution or Revolution?