25 September 2019, by Kathleen Storey
As we reflect on what it means to be South African this Heritage Month, let us take a look at the financial history of our Rainbow Nation. As is true of most young nations (South Africa is a spring chicken when compared to the ancient civilisations of Greece and China), the South African financial system was built on a colonial foundation. During the 19th century, in true South African spirit, various local businessmen saw opportunities to open their own financial servicing companies. Many of these financial service companies grew to become very successful. Two such successful South African pioneer companies were the South African Mutual Life Assurance Company founded in 1845 and the Suid-Afrikaanse Nasionale Trust en Assuransie Maatskappy founded in 1918. Over 100 years later, those two companies are still satisfying South African customers with their financial services offerings, but are now known as Old Mutual, Sanlam and Santam.
The South African financial services industry is booming, with new entrants constantly bringing new energy and strategic thrust into the market, challenging older, more experienced companies to keep up with modern trends and changing customer demands. The relationship between old and new, well-rehearsed and fresh, tried-and-tested and exciting, is what drives the success of the South African financial services industry. Old approaches are revered for their longevity and new approaches are embraced for their innovation.
This dichotomy can also be seen in the way South Africans deal with their finances. Older generations feel more comfortable with the saving and investment methods they grew up with. For some that means keeping some spare cash “under the mattress”, for others it means investing in stokvels, or even keeping their savings in the Postbank. Younger generations are more curious when it comes to financial matters, and willing to take on risks if the rewards are enticing. This has led to many younger South Africans looking to cryptocurrencies and binary trading as the perfect place for them to invest and grow their savings. Now, South Africans have never been happy to be stereotyped, or put in a box. We see this in the financial industry where gogos are making their stokvel payments via e-wallet transactions and ooms are discussing the drop in their Bitcoin shares over the braai.
With new technologies, increased mobile communication accessibility, and the South African consumers’ thirst for knowledge, the South African financial services industry has an exciting future ahead.