The group’s purpose is to drive Africa’s growth. Our success is linked to the prosperity of Africa’s communities and economies. We understand that all our stakeholders – not only shareholders and investors – need to benefit from the value we create. Accordingly, our commercial viability and the social relevance and legitimacy of our business depends on our ability to generate value for stakeholders. To ensure that we deliver this value, we continuously ask ourselves three key questions:
When we communicate with you, our stakeholders, we do our best to make sure that we listen. We strive to understand your needs and expectations to enable us to create shared value and deliver demonstrable benefits.
We have listened to your preferences in terms of how we report. You have communicated that in a world of information overload, you do not have the time or inclination to read lengthy corporate reports. Therefore, we have moved away from traditional sustainability reporting to a slimmer, more accessible report that focuses on material matters and tells our story in a clear, concise manner. This report is supported with additional online information.
We acknowledge that there are areas where we need to improve. Going forward, we aim to deepen our engagement with stakeholders to better understand your expectations and concerns. This will help us accelerate our progress on our shared value journey. This report marks the start of a three-year stakeholder engagement and reporting journey. During this time, we commit to regular communication with stakeholders, updating you on progress against objectives and targets, gathering your perspectives and feedback, and informing you of new plans and initiatives.
The role of a bank is to accept deposits of money from customers (depositors) for safe-keeping, while paying them interest, and to lend money to customers (borrowers) in the form of loans, while charging interest.
These loans make it possible for customers to buy houses, start or expand their businesses, purchase assets such as cars or fridges, or further their education with student loans. Therefore, our business model is dependent on customer trust that we will protect their savings, and on our knowledge and understanding of customers’ needs and their capacity to honour their loans. Our ethical responsibility to all stakeholders is to protect the money entrusted to us.
We believe we have an important role to play in responsibly and efficiently allocating financial resources to activities that will generate growth and development, and support economic transformation in our countries of operation. This needs to be done within appropriate risk parameters, and while protecting the interests of shareholders and customers.
We are aware of the fact that we are not lending our own, but rather, our depositors’ money. Therefore, we need to manage the level of risk to which we are exposed. We make use of financial modelling to determine our risk appetite. Together with robust regulatory requirements, this determines how much credit risk we can take as a business and how much capital we need to retain.
In assessing credit risk, we take into account a range of factors, including external variables. For example, we take account of the prevailing economic climate and how this impacts on government finances, business activity and consumer confidence.
We look at environmental factors, such as the drought currently impacting several of our countries of operation, which is putting farmers under pressure and pushing up food prices. We assess political factors, such as policy certainty, institutional integrity and the ease of doing business. We factor all of these variables into our risk assessment models, consider them when making decisions about business strategy, and assess them in relation to the needs of individual customers.
Importantly, we aim to take a long-term view. We recognise that the individuals and businesses that bank with us need our support and confidence in the good times and the bad times – our business success depends on the prosperity of our customers and clients. In tough economic times, such as we are currently facing, we are committed to doing all we reasonably can to see our customers and clients through to better days, while fulfilling our fiduciary duty to shareholders.
Keeping our customers’ money safe requires us to be constantly vigilant against cybercrime, including phishing, identity theft, viruses and fraudulent debit orders. We are committed to protecting customers from these threats without adding complications to the customer experience. To achieve this, we rely on sophisticated technology that recognises threats early, enabling us to alert customers and take preventative action.
Our dedicated financial crime control unit oversees the integrity of our systems and the safety of customers’ accounts in relation to threats of this nature.
Our business depends on customer trust and on the trust and confidence of regulators. We are subject to the oversight of regulatory authorities at a global level, and within each of the countries in which we operate. Their role is to ensure that we:
We work closely with all regulators. By cultivating open and respectful relationships with them, we are able to work together to address specific issues and challenges constructively and effectively.
The group is an active corporate citizen, and we provide regular input to government regarding policy, regulatory and legislative proposals.
In several cases, this has supported decision-makers to identify and avoid unintended consequences associated with particular proposals, while remaining true to the intention of the proposed interventions. For example, in South Africa, we have been closely involved in the development of the new ‘Twin Peaks’ regulatory model, which brings South Africa in line with international best practice.
The model comprises the ‘twin’ objectives of creating a more resilient and stable financial system (prudential regulation), and ensuring that customers’ interests are served (market conduct regulation). South Africa’s National Treasury has been exemplary in the level of engagement and consultation it has undertaken to formulate the new model. Standard Bank has been involved in the consultation process, and we are confident that the adopted model will deliver a strengthened financial system that underpins the contribution of banks to society.
Most bank customers are familiar with ‘Know Your Customer’ regulations. While they are often perceived by customers as an administrative annoyance, they are fundamental to global efforts to prevent identify theft, financial fraud, money laundering and terrorist financing.
However, as important as this is, our commitment to knowing our customers goes deeper than knowing their identities and monitoring their transactions against expected behaviour and recorded profiles. For us, knowing customers means understanding their financial aspirations and commitments holistically, and working with them as individuals to tailor products and services accordingly. It also means understanding their preferences and frustrations when it comes to using our services – and doing all we can to better meet their needs.
Toward this end, during 2015, many of our executives and senior managers spent several days in various branches and call centres, experiencing first-hand the interactions between customers and front-line employees, and developing an understanding of what is working and how we can serve customers better.
They learnt that some of the processes and protocols in operation in call centres in particular made sense for the bank, but created enormous frustration for customers. As a result of these observations, we have recently implemented changes to our internet banking (IB) functionality. This gives customers more flexibility to do things online, rather than having to make a call or visit a branch – a small change that has made a direct difference to our customers.
Knowing customers also means understanding the environments in which they live and work. For example, on a practical level, we undertook research into water quality and access across South Africa, to better understand potential changes in water distribution patterns and how water shortages will impact farmers, crops and communities. We also engaged with national and provincial government, entrepreneurs and communities to understand how banks can better serve the development of township-based businesses and home-owners.
Against the backdrop of the Fees Must Fall campaign in South Africa, we are working with government and institutions of higher education to devise improved funding options for students.
The value customers derive from their relationship with the bank is reliant on employees. Our employees work across the globe, in global financial centres and in 20 countries across Africa. They represent an enormous diversity of nationalities, cultures, ethnicities, religions and personal backgrounds. They bring to the bank a broad range of perspectives and life-experiences. This diversity represents a great asset, driving creativity and innovation, and reflecting the immense diversity of our customer base.
It also requires us to actively ensure that the workplace is welcoming and inclusive, that every employee feels valued and empowered, and that our development and leadership programmes support the same level of diversity in the top tiers of management as we see at the level of general employees and junior to middle management.
Across our African operations, we are developing local leadership teams. Within group head office, we continue to work toward achieving the level of diversity we desire at senior management and executive level.
In South Africa, we continue to experience a relatively high turnover of black male and female employees at senior management level. We are working to understand the reasons for this turnover, and the extent to which it is driven by internal culture and the opportunities we offer, or the external high demand for these talented individuals in the marketplace. We have redesigned exit interview processes to listen and understand better, while also enhancing employee experiences toward improving employee retention.
Our ability to create shared value for customers depends on us having a passionate and motivated team of people, who can think for themselves, who are excited by change, are not afraid to challenge traditional ways of doing things and take responsibility for improving the customer experience and driving innovation forward. We tasked an executive team to look at the company culture, and how to embed these aspirations, supported by the bank’s corporate values, at every level of the organisation. We are currently taking their recommendations forward, to ensure that all employees live Standard Bank’s values.
We are not naive about the challenges Africa faces – but we are determined to overcome these challenges by working together to drive inclusive economic growth – the kind of growth that benefits all Africans, by supporting job creation, skills development and opportunities for asset creation. This is how we create shared value. We recognise that there are no shortcuts – we take a long-term view. African economies need to be more competitive, diversify away from extractive industries, get more people into decent work and actively support the growth of the middle class. Appropriately targeted, affordable and accessible financial services can support this process.
We are proud to call Africa home, and we remain committed and determined to support inclusive economic growth, job creation and wealth creation across the continent.
We seek to forge relationships with stakeholders that are open and constructive.
Shareholders provide the financial capital that allows our business to grow
Governments create and enforce the regulatory frameworks that ensure a safe financial system
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