The impact of digital transformation on banking business models: the case of south Africa

Abstract

The thesis assesses the impact of digital transformation (DT) on banking business models within the South African (SA) context, with a specific focus on the adequacy of policy, legal and regulatory responses to the opportunities and risks posed by DT. In response to rapid technological advancements and shifting consumer expectations, the banking sector in SA has increasingly embraced digital technologies such as artificial intelligence (AI), machine learning (ML), blockchain and cloud computing. These developments have significantly altered the way banks create, deliver and capture value, thereby redefining traditional banking business models. The research uses the four key elements of the business model canvas (product and value proposition, customer interface, operational infrastructure and financial aspects) to assess the impact of DT on the banking business models in SA. It explores how DT is reshaping these elements by enabling new products and services, transforming customer interactions, fostering strategic partnerships and altering revenue and cost structures. The thesis identifies significant opportunities arising from DT, including enhanced financial inclusion, improved customer experience and increased operational efficiency. However, it also highlights emerging risks such as cybersecurity threats, data privacy risks, digital exclusion as well as elevated technological and operational risks. From the assessment of the policy, legal and regulatory responses of the SA authorities, the thesis concludes that, while progress has been made, further reforms are necessary to ensure a balanced, inclusive and innovation-friendly regulatory environment. Overall, the thesis contributes to the academic discourse by offering a comprehensive framework for analysing the impact of DT in banking business models. It also provides practical insights for policymakers, regulators and industry stakeholders.