ABSIP Newsletter June 2020

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100-DAY PLAN FOR A FAIRER, KINDER AND HARD-WORKING ORGANISATION

A word from the President

The ABSIP’s Executive Committee is hard at work finalising a 100-day plan which will paint a picture of the kind of legacy we wish to leave for ABSIP – a stronger, fairer, kinder and hard-working organisation.

Our plan for the first 100 days sets the direction to rectify policy imbalances in our organisation. It indicates what is important to us, and the kind of priorities we have and will continue to have. It is not an exhaustive list, but it is a good guide.

In our first 100 days we must learn from the past. Under each priority sits a policy plan to back it up, which we will be sharing in more detail as the year progresses. We must be an organisation that is transparent, and open about the big challenges we must all tackle together.

We must be an organisation that is transformative and accessible. We must be an organisation that builds not just relationships, but partnerships.

But with all these things, you can of course run the risk of being accused of dwelling on rhetoric. No one in the new EXCO wants that. Accountability not only helps the public, it helps us to tell our story.

Our plan is to put an end to the debate over how we measure success by finally agreeing on a set of robust measures, but also requiring ABSIP members to set targets against them.

And how will we hold ourselves to account for our own targets? By giving the power and the tools to you as members to evaluate our work. Every year we will be required to report on our progress, on what we have done for ABSIP. You will know whether we have passed or failed.

There will of course be more to say on all of the above issues in the future. For now, I hope you have been left with a sense of the priorities of the new ABSIP leadership, not only where we are heading, but also the kind of organisation we ultimately want to be.

I am looking forward to seeing the plan come to fruition over the next year, and to checking in with you, ABSIP members, to see if we have measured up.

In our first 100 days we must learn from the past. Under each priority sits a policy plan to back it up, which we will be sharing in more detail as the year progresses.

Polo Leteka-Radebe
President

OUR PRIORITIES FOR THE NEXT 100 DAYS

“Leadership is about inspiring and enabling others to do their absolute best together to realise a meaningful and rewarding shared purpose,” said George D Bradt in his book, The New Leader’s 100 Day Action Plan.

ABSIP’s new Executive Committee (Exco) wish to clearly articulate the goals that underpin our decision-making for every member of the organisation to understand the rationale behind how we all intend to make it to the future.

Exco believes that if we can bring ABSIP members along with us, we will have won half the battle. So here are our priorities for the next 100 days:

  • Appoint auditors and expedite audit of 2018 and 2019 financial statements;
  • Assess tax position and conclude any outstanding matters;
  • Reinstate ABSIP’s Public Benefit Organisations status;
  • Build a compliance culture within the organisation;
  • Build a strong corporate governance culture by redrafting foundation documents, putting a code of conduct
  • in place and optimising structures of ABSIP operations and constituencies;
  • Appoint an operations team including CEO for the office;
  • Engage with other industry bodies to understand different models and design one best suited to take ABSIP into the future;
  • Monetise the membership database for long term sustainability;
  • Map all of ABSIP’s stakeholders and ensure that we have plans in place to manage these relationships;
  • Leverage the momentum and goodwill from the elections to build a support base for ABSIP going forward;
  • Improve the professionalism of our communications to members;
  • Streamline the member sign-up and payment process;
  • Develop plans for thought leadership and identify spokespeople who can engage on behalf of ABSIP;
  • Put succession plans in place for future leaders;
  • Build strong advocacy roles across various areas;
  • Embark on an event strategy focused on students and young professionals for their growth and development;
  • Implement an Accountability Charter;
  • Refine our offering to remain relevant to the ever-changing needs of our economy and Build a sustainable institution of the future.
  • Let us work together to achieve these goals.

    LIKE THE YOUTH OF 1976, TODAY’S YOUNG PEOPLE WANT TO THRIVE AND LEAD FULFILLING LIVES

    The triumph of technology, for better or for worse, is far from complete – in schools, businesses, companies, organisations, operating rooms, laboratories, banks, halls of government and everywhere. Just about everything we’ve ever done that has to do with communication and information is being or has been digitised.

    Like the youth of 1976, today’s young people are full of energy, ambition and willingness to develop their skills and stand on their own two feet, to thrive and lead fulfilling lives buffeted by 4IR.

    Historically, June has been immortalised as a month when high school pupils in Soweto were massacred by the apartheid police during a peaceful march, an event which sparked years of resistance to topple white minority rule.

    ABSIP’s new leadership spearheaded two virtual events – The ABSIP YOUTH CONFERENCE 2020 on the “Fourth Industrial Revolution (4IR) For The Earth,” which was addressed by Charmaine Houvet, Senior Director for Africa at CISCO, and a webinar on “The new dawn in the digital age,” which was addressed by Telkom CEO, Sipho Maseko and hosted by the University Cape Town. The events reflected how today’s youth believe they must develop their skills and take ownership of the Rainbow Nation’s socio-economic and political challenges including equal education and personal and socio-economic development.

    Like their 1976 counterparts, the youth want to make a go of their lives and be successful. They want to earn their place in society and know a job is the key to a future they can look forward to.

    Unfortunately, in South Africa today, 48% of the youth between the ages of 15 and 34 are unemployed – amid the challenges of racialised poverty, deepening inequality and an escalating unemployment rate. Accompanying this ugly reality is an economy that is shedding jobs.

    Houvet, who leads Cisco’s Africa growth strategy, regulatory, government relations and public policy efforts across Africa, emphasised how it is crucial to assess the impact of the Fourth Industrial Revolution (4IR), because the digital revolution is much more profound than a mere change of tools.

    She emphasised that the internet is built on both a philosophy and an infrastructure of openness and free communication and its users hold the potential to change not just how we get things done, but our thinking patterns and behaviour during this 4IR era.

    Maseko said the youth should continue being digital natives and be enthusiastic in their pursuit of opportunities in the digital economy, whether to develop their start-ups or become self-employed.

    Maseko illustrated how digital savviness statistics indicate that the youth is driving the digital shift, which underpins significant influence and informs consumer behaviour.

    He said with the understanding of today context, the youth has the opportunity to lead and create home-grown technology solutions to solve key structural challenges.

    Through the lens of Covid-19, the financial services sector is challenged and the recovery is dependent on the adoption of technology and digital transformation.

    Maseko said, unfortunately, socio-economic challenges will hinder the youth’s ability to benefit from the opportunities that the digital economy can provide.

    Other challenges that will emerge for youth in the digital age, include:

  • Reimagining the work of the future, the impact of 4IR on jobs;
  • Some white collar jobs will disappear such as clerical clerks , accountants and more;
  • Many jobs will change, for example, financial intuitions will employ coders;
  • New jobs will emerge. They include Data scientists and Artificial Intelligence specialists;
  • Speed of innovation and technology disruption requires the workforce to learn and re-learn continuously and
  • The data driven economy increases the risk of cybersecurity and identity theft.
  • Therefore, Maseko advised that the next wave of innovation and entrepreneurship should solve for current socio-economic issues with the end in mind.

    His final advice is from Steve Biko: “A black man should be more independent and depended on himself for his freedom and not to take it for granted that someone else would lead him to it. The blacks are tired of standing at the touchline to witness a game that they should be playing. They want to do things for themselves and all by themselves.”

    Like their 1976 counterparts, the youth want to make a go of their lives and be successful. They want to earn their place in society and know a job is the key to a future they can look forward to.

    ABSIP WORKING HARD TO SEE LOAN GUARANTEE SCHEME EXPANDED TO NON-BANK LENDERS

    Realising that the government’s R200 billion COVID-19 Loan Guarantee Scheme aimed at mitigating the pandemic’s disastrous impact on small, micro and medium-sized enterprises (SMMEs) effectively excludes thousands of them, ABSIP has submitted recommendations to help make the scheme inclusive.

    Parliament has responded, saying the government would finalise amendments to the repayment holiday and turnover limit, and relax terms and conditions to support lending.

    A statement from parliament said the South African Reserve Bank and the commercial banks are finalising the revised legal arrangements and will make announcements shortly. Work is also continuing to expand the scheme to non‐bank lenders.

    “We believe that the Scheme, correctly formulated, expanded and implemented, would provide fair and equal opportunity to SMMEs to apply and be considered for government-backed financial support that cushions them from the calamitous COVID-19 impact,” said ABSIP President, Polo Leteka Radebe.

    Leteka-Radebe said the reasons ABSIP felt obliged to submit recommendations, included the following:

  • Many early stage SMMEs do not qualify for bank loans due to banks’ stringent credit criteria and processes;
  • The Scheme excludes specialist SMME funders that fund entities that are not typically funded by banks, a case of double jeopardy;
  • The take-up of the loans offered through the scheme, has been less than expected with only 29 700 received and only R7-billion approved loans for 4 800 qualifying businesses, numbers lower than expected;
  • More than 5000 applications were rejected due to risk assessment performed by individual banks;
    14 100 applications are still under assessment and there are 200 idle loans which have been approved but not yet taken up.

  • There is a limitation of participation to companies that are classified as ‘good standing’ by participating banks as at February 2020;
  • The Scheme effectively excludes thousands of SMMEs that either do not qualify for bank loans or simply do not rely on banks for funding;
  • The Scheme grants preference to a very limited number of SMMEs who will no doubt benefit exclusively from the government-backed financial support provided during this crisis;
  • Other countries such as the United Kingdom have incorporated conditions in their COVID-19 guarantee schemes to ensure financial inclusion of especially micro and small businesses and Non-Bank SMME Funders.
  • Based on the above observations, ABSIP has recommended the following:

  • Urgently reopen and extend the consultative process to include registered Non-Bank SMME Funders in the Scheme.
  • Extend the scope of the scheme to include business support in deserving cases.
  • Open the Scheme to all SMMEs that qualify for credit and do not disqualify SMMEs simply based on whether or not there is an existing borrowing relationship with banks.
  • Reconsider and revise the criteria for funding SMMEs.
  • Draw lessons from how other countries have formulated their schemes to achieve fairness and financial inclusion.
  • ABSIP believes the scheme should work towards dismantling existing structural inequalities, and not reinforce them.

    In line with the constitutionally enshrined values of equal opportunity and equity, ABSIP looks forward to the revised legal arrangements and the expansion of the scheme to non‐bank lenders.

    TRADITIONAL BANKING SYSTEM UNDER THREAT, NEEDS TO DIGITISE URGENTLY – ABSIP YP RESEARCH

    Jobs that are repetitive and predictable risk being replaced by technological advancements. As a result, the Young Professionals (YP), have called on the banking sector to embrace current and potential future changes and invest in skills development.

    “The effect of the fourth industrial revolution (4IR) on the banking sector is an opportunity for South Africa to look at realigning the skills requirements of the new economy to the relevant qualifications and how that is accessed,” the ABSIP YP Think Tank has found in research titled Future of Work in Financial Services.

    “The banking sector is undergoing a change because of the digitisation of the economy under 4IR. The traditional banking system is under threat and we have seen banks respond to it by transforming their systems to become more digitised.

    “What we are seeing is a shift in roles – opportunities are found in uncharted waters. Thus we encourage young professionals to look into these trends and form an idea of how their current roles may evolve due to the 4IR and in so doing gain an advantage in being able to be future fit,” the Think Tank found.

    The think tank pointed at the BANKSETA’s estimates that reveal that bank teller vacancies dropped by 70% between 2012 and 2014 and general clerk vacancies by 50%. Further examples of this transition are the introduction of “Pepper” by Nedbank and the closure of 104 branches nationwide by Standard Bank in 2019.

    The ABSIP YP believes the need for technological skills have been demonstrated by the growth of administrators and information communication systems analyst vacancies which have increased by 146% and 35% respectively.

    “With users across different industries requiring more digitised experiences and ways of being serviced, it is not business as usual for many companies.

    “The South African Banking Sector is not immune. Research has shown that digitisation in the workplace cannot be ignored. Jobs such as telemarketers, loan officers, data capturers, tellers and credit analysts are some of the occupations most likely to be automated. Conversely, jobs such as that of a conversational interface designer are sprouting.

    “As it stands, about 56% of banking sector employees have only Grade 12, and less than 3% have less than Grade 12 as a qualification. This changing world of work means that STEM (Science, Technology, Engineering and Mathematics) students should invest in learning the Social Sciences, while the Social Science students should immerse themselves in understanding technology.

    “Technologies such as robotic process automation, machine learning, and adaptive intelligence are already beginning to have a significant impact on compliance, payments, and retail services – among other banking functions. Banks need employees with the skills to understand how these technologies can be effectively applied, and they need agile and adaptive workforces to navigate these changes.

    “We urge those in the banking sector to take note of some of these developments and position themselves to take advantage of the changes within the banking sector,” the YP Think Tank recommended.

    The ABSIP YP believes the need for technological skills have been demonstrated by the growth of administrators and information communication systems analyst vacancies which have increased by 146% and 35% respectively.

    ABSIP DIGITAL TRANSFORMATION SERIES TO EQUIP MEMBERS WITH ESSENTIAL SKILLS AND TOOLS

    The Fourth Industrial Revolution (4IR) – commonly seen as the digital era, is a fusion of technologies connecting physical, digital and biological spheres at a speed not experienced before.

    4IR is accompanied by buzzwords such as the internet of things, artificial intelligence, robotics, 3D printing, nanotechnology, autonomous vehicles, cloud computing, cybersecurity, quantum computing and many more.

    But what does this mean for businesses today and how can a business not only survive, but thrive in this environment?

    The implications are breath-taking. Individuals – whether as students or professionals and companies – whether big or small, need to adapt to a new way of thinking and behaving in order to survive or better yet thrive in a 4IR world.

    ABSIP is partnering with some of the most pioneering minds in the 4IR space to unpack some of the elements of 4IR in order to equip members with the necessary skills and tools needed to adapt to a digitally disrupted world.

    Through a series of workshops, forums and summits featuring local and international experts, ABSIP intends to help members to better understand and become more equipped to position themselves to take advantage of this changing environment.

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