Sasfin looks to bulk up transactional banking

● New CEO oversees integration of lender's various departments into single, coherent business offering

Sandile Shabalala, Sasfin’s CEO for business and commercial banking, says his main focus this year will be spearheading the niche lender’s development of its transactional banking capabilities as it seeks to bulk up its ability to serve larger and more complex corporate customers.

Having joined Sasfin in January from TymeBank, where he was CEO, Shabalala has spent the past five months integrating the lender’s previously siloed departments — be it trade finance or commercial property finance — into a single, coherent business banking offering.

That has led to Sasfin establishing a holistic business and commercial banking cluster, which Shabalala says he wants to further enhance to improve the bank’s ability to service larger corporate clients with more complex banking needs.

“If you ask me what is my biggest focus area right now, it’s to look at the transactional banking capability,” Shabalala said.

“That will be my number one priority this year — to get that proposition much more fit for purpose for medium-sized and more complex businesses.”

As the only bank in SA that can truly claim to be purely focused on business banking, Sasfin tends to segment its clients into three broad categories: small businesses with annual turnover of between R1m and R15m; medium-sized businesses with turnovers of R15m to R200m; and large corporates with turnovers above R200m.

The bulk of Sasfin’s roughly 2,500 clients fall into the first two categories (small and medium-sized businesses), but Shabalala says as its transactional banking capabilities are expanded, it will have greater capacity to service bigger and more complex corporate clients.

“As our transactional capability evolves over the years and it becomes much more mature ... we will feel much more comfortable banking more complex-type businesses,” he says.

Sasfin also plans to win more business customers by offering them a more personalised product selection that essentially marries private banking service levels with business banking capabilities.

With its larger rivals more focused on bigger corporates and listed entities, Shabalala says Sasfin’s market research shows a significant cross-section of non-listed businesses are growing increasingly disillusioned with having to stand in queues at branches or transact online like typical retail customers.

“The large banks tend to push medium-sized businesses into their retail segment ... they’re being sent to branches or forced to engage with faceless people ... there’s no relationship building in that segment,” he says.

“Obviously, digital channels are important and we want to enhance our offering there, but we want to make sure that human interaction is still primary in terms of how Sasfin engages entrepreneurs.”

Of course, at the lower end of the small and medium-sized business banking market, Shabalala is also acutely aware of Capitec having recently rolled out a business banking offering after its purchase of Mercantile Bank in late 2019.

While Capitec’s mass market client base means its business offering is likely to have a greater exposure to informal businesses and those with turnover of less than R1m per annum, Shabalala says Sasfin cannot afford to be complacent.

“Years ago, the banking industry didn’t take Capitec seriously and look where they are,” he said.

“They are no fools.” However, given Sasfin’s stated goal of offering a more differentiated business banking offering, it is also spending a lot of time on bulking up its platform capabilities, such as enabling business clients to make larger payments and to process payments to larger workforces.

It’s also enhancing its product suite with the rollout of a new overdraft facility and a new foreign exchange portal.

With service being one of Sasfin’s key differentiators, it also wants to expand its team of business banking executives to provinces outside Gauteng.

“At this stage, we only have bankers that are primarily in Gauteng. We would like to extend that distribution network to other major metros,” he said.

“We’d like to be able to offer business banking propositions in KwaZulu-Natal, Cape Town, Mpumalanga and Limpopo.”