BANKSETA SECTOR SKILLS PLAN 2003 - EXECUTIVE SUMMARY
BANKSETA SECTOR SKILLS PLAN 2003 - EXECUTIVE SUMMARY
The BANKSETA Sector Skills Plan 2002/3 is an interim report that outlines the extent to which the
BANKSETA has responded to the requirements of the National Skills Development Strategy and the Human
Resources Development Strategy.
The BANKSETA has produced this Sector Skills Plan (SSP) following research and consultation across the
banking sector, using data gathered from a variety of sources: documentation, publications, reports posted
on websites, stakeholder workshops and interviews, economists’ reports and workplace skills plans.This
process was made possible through the sector’s involvement and endorsement of proposed projects and
reporting processes. Implicit throughout the document is that the BANKSETA will provide assistance to
stakeholders to implement the systems required of them.
The compilation and analysis of the SSP has allowed the BANKSETA to develop a thorough framework for
encouraging and supporting skills development.The objectives identified in this SSP aim to support the
BANKSETA strategies and in turn the ultimate achievement of its mission.
PURPOSE OF THE SECTOR SKILLS PLAN (SSP)
The SSP is an important strategic document, providing information to better analyse the structure, profile,
characteristics, trends and patterns within the sector. Its purpose is to guide the planning of national
strategies for skills development and the allocation of resources.Within the SSP is a strategic plan that
outlines the identified needs, the results to be achieved and the methods to achieve those results.
The BANKSETA’s SSP 2000 positioning document was a five-year banking industry skills development
business plan. It outlined the key issues and challenges that the sector faced.As the SSP 2002 was
in the third levy year, some targets identified in the first SSP 2000 are still being met. Reports detailing
progress in achieving these targets are communicated to stakeholders at the BANKSETA financial year
OVERVIEW OF THE BANKSETA
To promote and give effect to legislation by establishing an education, training and development
framework to enable stakeholders to advance the national and global position of the banking sector.
The BANKSETA and the BANKSETA Council have identified three principles that guide the BANKSETA’s
• To be cost effective, placing a high value on the swift delivery of services at the lowest cost;
• To employ leading edge technology and best business practices;
• To comply efficiently with legislation while protecting the freedom of its constituent organisations.
The BANKSETA serves a diverse range of companies, including the central bank, domestically controlled
banking operations, an increasingly strong foreign banking contingent, development finance and leasing
operations and other financial operations.
The BANKSETA recognises its responsibility – to the banking sector, in particular, and to the economy as a
whole – to protect and enhance employee competence by supporting and enabling skills development
The BANKSETA acknowledges that it is primarily an enabler and that it can facilitate and encourage, but
cannot prescribe or enforce, skills development.
South Africa has a well-developed banking sector that operates in sophisticated local and world markets.
The sector also operates in unsophisticated markets where large numbers of the population remain
In 2001, the contribution of the financial services sector to the GDP in South Africa was in the order of
20.5%, a significant increase from its contribution of only 16.4% in 1995.
The sector recognises the significance of human resources, and its investment in skills development is a
major contributor to its success. Because of the range of banking and financial services organisations, each
determines its own skills development strategy.This is evident in the variety of workplace skills plans that
the BANKSETA has received.
The banking sector is characterised by world-class banking and financial services companies that have
made concerted efforts to stay abreast of new technologies.The future of banking will be determined, to a
large extent, by how these organisations deal with something that is both destroying banks’ traditional profit
centres and creating opportunities for new ones.Although information technology has a major impact on
the banking industry, it must be seen within the context of a broader range of factors that are also shaping
the future of banking.These include the globalisation and deregulation of banking, the volatile nature of
global capital flows and currencies, regional and country risk associated with political and social upheaval,
and mergers and acquisitions within the banking industry.
The banking sector is highly competitive – both inside and outside of South Africa – and banks are
under increasing pressure to find ways to operate more cost-effectively.They have to seek out new markets,
develop new products and enhance service.
Four major banking groups – Absa, Standard Bank, Nedcor and FirstRand – control about 80% of the
market. However, they are losing market share with the emergence of smaller banks and foreign-owned
companies.The SMME segment, on the other hand, is flourishing, with large numbers of niched operations.
The bulk of organisations in the banking sector are small and medium-sized enterprises and comprise
mainly micro finance institutions. Out of 1 667 organisations registered with the BANKSETA 1 507 are
SMMEs.Paradoxically, large corporations employ 94% of employees in the sector.
The micro finance industry plays a key role in bridging the gap between South Africa’s sophisticated
financial sector and the emerging market population.
The banking sector in South Africa is following the global trend of declining numbers of employees.While
there are significant job losses at lower levels, there is a growing need for highly skilled people in the smaller
banks and in specialised areas of the large banks.
In general, the banking sector recruits from the skilled and highly skilled labour pool.The demographics of
banking institutions will begin to be transformed as the aims of employment equity legislation are realised.
It is evident that this legislation is, in many respects, a driving partner of the Skills Development Act.
The acquisition of new and high level skills is essential if the higher echelons of the banking industry are to
reflect national demographics.
Regulating the industry
A regulated banking sector is critical to the economy’s growth.The nature of services and financial
instruments involved in the financial services sector ensure that it is strictly regulated and tightly controlled
by legislation and state agencies. A variety of bodies service the industry, operating from either a
commercial or a regulatory framework.
Change in structure and scale of operations
The ability of banks to increase in scale and broaden their scope has resulted in two simultaneous trends:
• consolidation among already large banks, and
• desegregation at national and regional level.
Net interest income, after providing for bad debt, has gradually come to contribute a smaller proportion of
banks’ total income.
Large South African banks will always have some bricks-and-mortar bank branches, but these are likely to
evolve into different entities. For example, tailored branches will serve as points of sale, giving advice on
more complex product and service offerings.
The financial services sector is listed in several research studies as having the smallest percentage of HIV
infection and deaths from Aids. A possible reason for this is that, in general, financial services employees
are in relatively secure employment and are able to maintain their levels of health, hence reducing the
incidence of opportunistic infection.
However, the effect of HIV/Aids on small-scale enterprises is potentially debilitating, as these operations
often comprise a small workforce made up of family members.The implications for SMMEs are that the loss
of the primary operator could mean the end of the business enterprise.
Factors impacting on the financial sector in the future include:
• Access to household services and literacy levels;
• Access to electricity (influencing the use of technology);
• A broad-based age pyramid may imply a dramatic increase in the demand for financial services when
these people enter the market.
The social challenge that faces the banking industry, including micro finance operations, will be to provide
affordable banking services to both the rural communities and to the largely unbanked, under-privileged
parts of the community.
DEMAND FOR SKILLS
Employment and skills needs
From 1997 to date, employment in the sector has decreased nationally by 3,5% to 5%, due to re-structuring,
consolidation, mergers and acquisitions.This is reflective of the overall decline in formal employment in
There was a marked increase in the demand for skilled and highly skilled workers from Year 2
(1 April 2001 – 31 March 2002) to Year 3.
In an effort to become more competitive, domestic retail banks are centralising functions with no direct
interface with the customer, reducing the amount of back-office support functions.
Innovation and technology will cause banks to change the profile of their personnel.As services become
more sophisticated banks will need better-educated and trained employees.
Threats to banking sector
The greatest threats to banking continue to be the brain drain, mobility of labour and crime. Emigration of
skilled banking and IT professionals is a continuing trend in line with the general emigration pattern for the
The impact of violent crime, in particular armed robberies, makes the banking sector less attractive as a
place to work. In addition, there is a growing incidence of white-collar crime.
Areas of need
The demands of the marketplace and for cost-efficiency create pressure for retail banking to pursue
electronic channels.This, in turn, poses a strategic challenge for retail banking to reconcile the reduction in
staff and brick and mortar establishments with a considerable expansion in services.
Another implication is that the bricks and mortar infrastructure of many banks is diminishing, as do some of
the occupations associated with the traditional mode of banking, such as middle managers and branch
The following areas have been highlighted as requiring specific attention in a constantly changing banking
• Creative leadership – to support the innovation and development of new products and services, and new
• Sales personnel – to aggressively market financial products
• Technology experts with innovative designing skills
• Greater vigilance – identifying and reporting incidences of fraud
• Ongoing skills development to ensure that all legislative changes and regulations for the industry are
• Sophisticated asset managers and portfolio managers – to address the diversification of products and
• Trading and treasury
• Insurance and investment
• Customer interface staff – need for problem-solving and decision-making capability as well as enhanced
product knowledge and interpersonal skills
• A strengthening of strategic negotiating and strategic alliance management skills – to be able to offer a
wide spetrum of services.
SUPPLY OF SKILLS
The banking sector can be characterised by its high level of investment in training and development, which
has far exceeded the current skills development levy. Given the challenges facing the sector and the fast
pace of change, skills development has been an ongoing necessity.
Clearly the sector is committed to training its employees. Over 113 000 employees received training in the
year ended 31 March 2002.Training occurs at all levels of the sector and spans a range of learning fields.
Most organisations see training as a key part of their employment equity, performance enhancement and
investment in human capital initiatives.
91% of all employees in the broader banking sector are either skilled or highly skilled in the following skills
• Accounting and finance
• Information management and analysis
• Human resources
• Operations management and economists
• Sales and marketing
• Engineering and technology professionals
It must be made clear, however, that the banking sector does not view qualifications as a substitute for
Employees in this sector bring to the workplace either a matric certificate or a tertiary qualification.
In addition the sector’s formal investment in learning and development enables a large number of
employees to attain a wide range of qualifications. In addition to formal development opportunities,
employees also receive extensive on-the-job training.
Learning design and selection has largely been based on an outcomes based methodology of skills analysis
and skills audits.This has meant that training needs are accurately identified and addressed within
Extent of training
A survey was conducted by KPMG in August 2002 to identify the extent of training provision within the
banking sector. It found that employer organisations and external providers generally offer programmes
across all skills clusters.The degree to which programmes are outsourced varies according to each
• It appears that instructor-led training remains the most used channel by which training programmes are
• Organisations appear to be most active in terms of providing training relating to product knowledge and
• Generally, organisations contribute extensively to on-the-job training.
• Some of the possible gaps in provision identified in terms of training and development include:
• Micro finance;
• Bank-specific customer interface skills training;
• Back office processes and support; and
• End-to-end processing skills.
The primary business strategies for the banking sector over the next five to ten years are:
1.Tap into mass market
2. Expand into the rest of Africa
3. Expand and improve distribution channels
4. Fraud prevention
5. Niche marketing
In its efforts to support both the large players and the SMMEs within the sector, the BANKSETA continues
in its aim to create an environment that encourages a culture of high quality lifelong learning.
Skills development needs vary from organisation to organisation.The BANKSETA considers its first priority
to be that of providing an environment that enables such training and development initiatives.
The skills development strategy encompasses the following:
• Support services and training to large corporate clients and SMMEs.
• Guidance to ensure that workplace skills plans are in line with the skills priorities and approval criteria of
• Maintenance and refinement of the levy grant system in an effort to ensure that disbursements are made
• Development of creative grant-disbursement incentives to encourage skills development.
• Building a system of communication with skills development facilitators (SDFs), by encouraging the
registration of SDFs, promoting their training and facilitating workshops on BANKSETA activities.
The BANKSETA will also encourage continued high investment in skills development and support new
ways of addressing skills development needs in five key skills priority areas:
• Information technology
• Management and leadership
• Customer interface
• Financial/specialist financial skills e.g. risk, credit, investment, corporate finance
• Legislation implementation skills
The BANKSETA has maintained its objective of establishing a communications strategy – to provide
information to and obtain feedback from stakeholders.
The notion of being a lifelong employee has long since vanished and within banks there is a great deal of
movement between functions.This necessitates the ongoing upskilling and reskilling of employees.This may
explain, in part, the great investment banks are making in developing skills across all functions.
The BANKSETA ETQA will need to collaborate with other ETQAs in order to prevent the duplication of
functions.The strategy includes inter-SETA and inter-ETQA co-operation to ensure that a streamlined
service is provided.
Investors in People
In an effort to improve the image of banking and to encourage best practice, the BANKSETA has
participated in the pilot project for the Investors in People Standard, implemented by the Department of
In order to promote the alignment of specific learning needs within organisations with SAQA standards and
qualifications, the BANKSETA will:
• Identify and promote unit standards and qualifications that support training and development in the
identified skills priority areas.
• Prepare a status report on existing related SGBs.
• Define BANKSETA dependencies on SAQA and develop and implement plans to address the
The BANKSETA continues to work with members of the sector to ensure that what it delivers remains
relevant and that it contributes to the full personal development of learners, the broader banking sector and
the economy as a whole.
Since its inception in April 2000 the BANKSETA has managed to set realistic and achievable milestones.
The BANKSETA subscribes to and supports the National Skills Development Strategy (NSDS). It has
adopted a lead-by-example approach in an effort to encourage employers within the banking and
micro finance sectors to contribute to the achievement of the objectives set to help realise the strategy.
The BANKSETA’s long-term objectives are to ensure that skills are developed to contribute to the full
personal development of the learner and to the economy as a whole.The BANKSETA acknowledges that
skills planning is an ongoing process.Therefore, it will need to constantly add to its base of data on the
sector profile and skills needs to remain relevant and accurate in fulfilling its role as a SETA.
The BANKSETA will continue to place maximum focus on expanding the learner base, by playing an
increasingly significant role in the South African business community and in the South African community of
employees at large.
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