Absa, one of South Africa’s biggest banking groups, is moving more customers onto digital banking, but its latest results reveal a contradiction at the heart of its technology strategy: adoption is rising, while the cost of running the business is not falling.
Digitally active customers grew 14%, but the cost-to-income ratio edged up as technology costs hit R8.78 billion ($538.7 million), alongside a further R200 million ($12.3 million) impairment on software assets.
The numbers suggest African banks may be swapping the costs of physical infrastructure for an expensive technology stack. While apps can reduce the cost of serving individual customers, banks still have to fund the software, cloud infrastructure, cybersecurity, data systems and technical talent required to keep those platforms running.
Absa says it serves more than 13.4 million customers across its pan-African operations. But that growth is happening alongside a substantial technology bill.
Originally published by TechCabal.