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Driving a strategic imperative

01 October 2018Jonathan Faurie

Transformation of the financial services industry – on all levels – has been one of the key focus areas for government over the past few years. Government acknowledges the important role that the sector plays in the economic growth of the country and wants to make sure that it is accessible to all South Africans. This was the motivation behind the launch of the Financial Sector Transformation Council (FSTC), which was previously the Financial Sector Charter Council.

Firm steps

Transformation is a topic that has been spoken about for many years. However, up until the beginning of 2017, government never had a firm view on how this needed to be driven. 

The formation of the FSTC was a major step in the transformation of the financial services sector. FSTC CEO Isaac Ramputa said that while the financial services industry does play an important role in the economy, the industry needs to sharpen its focus on strategic leadership. 

“We have spoken in the past about how important it is to drive transformation in the financial services sector. Now is the time for action,” said Ramputa. 

Important focus

Speaking at the recent launch of the FSTC, Ramputa pointed out that purpose of the FSTC will be to provide strategic leadership and to develop a consensus on how to achieve inclusive economic growth within the industry.   

According to Ramputa, this will be done through:

  • the development of infrastructure that will drive transformation within the sector;
  • the funding of black owned businesses within the industry;
  • supporting small, medium and micro-sized enterprises;
  • rural development and funding for black agricultural businesses; and
  • financial inclusion and consumer financial literacy. 

“While all of the above elements are important, we feel that the funding of black owned businesses needs to have a particular focus. The FSTC will be providing funding to both existing and newly established black owned businesses,” said Ramputa. 

Further support

This is important because it supports the strategic objective of rural development. Ramputa points out that urbanisation is rife within rural communities as community members move towards major cities to look for jobs. 

“There are some community members who do not want to leave their communities as they have deep ties within them. If we can create jobs within these communities, there will not be such a desperate need for urbanisation,” said Ramputa. 

However, South Africa is full of examples of cases where money cannot resolve every challenge. It is all very well that the FSTC commits itself to funding existing and newly established black owned businesses, but what happens beyond this financial commitment? 

“It is very important that the FSTC commits itself to the development of black owned businesses beyond the funding aspect. There will also be BREAK a mentorship commitment from the FSTC. When we look at what a newly established business, we find that there is a dire need for funding, access to skills and access to the market within which they want to grow their business. We will assist in all of these aspects,” said Trevor Chandler who is a Director at the FSTC. 

Governance and oversight

It is all very well to say that a financial and mentorship commitment will drive transformation within the financial services industry; however, the proof of the pudding will be in the eating. How will the FSTC know that it is achieving its objectives? 

According to Ramputa, the FSTC will establish annual targets when it comes to transformation and will evaluate its achievements according to these targets on an annual basis. 

These targets are not a secret. They will be established after extensive consultation with the industry so that all stakeholders within the industry (insurers, associations and government) can work towards achieving these targets on a collaborative basis. 

Editor’s Thoughts:
Transformation can be an emotional topic. However, every insurer is committed to driving it in order to achieve the economic growth that this country desperately needs. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.

 

 

Comments

Added by old timer, 01 Oct 2018
Does transformation mean a black sale force selling products to black communities where unemployment is rife?
Meanwhile Regulation is getting tighter and commissions are projected to drop by 30 - 50%?

Good luck with that one.
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