Banking & Insurance

The economies in many countries have not seen a recession for more than a decade. Low levels of unemployment and low loss rates in retail credit have allowed banks to lose focus on their collection and recovery departments.

The future leaders in auto and equipment finance will be those who make strategic investments in digital transformation, platform modernisation and capability development to attract a new kind of customer and stay competitive in a rapidly evolving industry.

Unpacking the enigma around offshore starts with one simple certainty; nothing in the South African Income Tax or Reserve Bank regulations prohibits South Africans from opening a bank account, investment account or setting up an offshore trust.

The insurance industry needs to get ready for ‘Insurance 3.0’ – the next stage of evolution for the industry to accommodate the changes brought on by our current pandemic. But wait, aren't we still trying to reach level 2.0? Yes and no.

Even before COVID-19 plunged the world into crisis, artificial intelligence (AI), and more specifically conversational AI was fast becoming a key feature in the digitisation of customer-facing industries like insurance. In fact, Gartner had predicted that 85% of customer interactions will be managed without humans by 2021.

As most household incomes shrink, Savings Month, this year coinciding with South Africa’s fifth month of COVID-19 lockdown, is placing monthly expenses, especially insurance bills, firmly in the spotlight. And it is not a kind light. It is critical that South Africans under stress use any extra time they may have in lockdown to sensibly review their insurance covers.

The Western Cape High Court decision to compel insurance company Guardrisk to honour the COVID-19 business interruption insurance claims of Cafe Chameleon, a Cape restaurant, is to be applauded.

High on the agenda of Finance Minister Tito Mboweni’s supplementary budget speech on Wednesday 24 June was the need to support the economy as it gradually reopens as well as to get businesses moving again. Notably, Mboweni announced amendments to the COVID-19 guaranteed loan scheme that was introduced at the beginning of lockdown, offering some relief to struggling businesses.

Being nimble and awake to the rapid changes occurring to bank fraud will be essential. History tells us that things like natural disasters, times of economic instability, and fears of recession or unemployment provide the perfect environment for increased fraud and financial crime.

Business owners could not have known how fundamentally their lives would change only a few months ago. We now know the pandemic has wreaked havoc on cash flows, supply chains, debt repayments and the general financial standing of thousands of companies in South Africa.