Standard Bank spent R11.2-billion on IT the first six months of 2023

Standard Bank Group has revealed that it has spent R11.2-billion in the first half of the year to 30 June 2023 on technology, including staff costs, a 12% jump over the same period a year ago, as it continues its wholesale shift from on-premises IT to the cloud.

The company mentioned that it is continuing its cloud migration spending, with a third of a huge migration project to the cloud now completed.

The big contributors to the rising IT spend included Software, cloud and technology-related costs, up 18% year on year to just under R6-billion for the latest six-month reporting period. This was topping up staff costs, which rose by 11% year on year to reach R2.8-billion. Amortisation costs were flat, while depreciation rose 7%.

The JSE-listed financial services group said IT spending growth was driven specifically by:

• Continued cloud migration spend to enhance business agility and system resilience, although there was reduced capitalisation as signature IT programmes wound down.
• Investment in software to allow employees to service clients better, enhance infrastructure resilience, and to improve client relationship management platforms and digital capabilities for users.
• This spending was partially offset by savings driven by “conscious efforts to contain third-party spend and the decommissioning of legacy systems”.

Standard Banks said it was able to increase the investment in software, allowing it to improve client service levels and it also helped simplify its IT footprint. It has also meant improved system stability and resilience as well as “significantly improved response and recovery times”.

The company also gave reports that branch transactions declined as customers migrated to digital services; there was an 8% decline in branch square metreage in South Africa as the physical footprint was reduced. The group achieved a 98% ATM uptime rate and 99% uptime for its mobile banking app.

99% of its transaction volumes in South Africa are now reportedly cashless, which is a trend that has helped it to cut costs. In an interview last year, Standard Bank CEO Sim Tshabalala said: “It’s extraordinary. What we’ve seen is an incredible shift to electronic ways of doing things.”