Sim Tshabalala: Ahead of the pack
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As part of Euromoney's 50th anniversary coverage, we profile some of the biggest names that we interviewed for our May Africa focus.
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In the South African Sunday Times on March 17 there was a not-so-flattering cartoon of Standard Bank Group’s chief executive, Sim Tshabalala.
In it, Tshabalala is in an aeroplane. To his right, there are a number of parachutes emblazoned with “VSP” – or voluntary severance package – and to his left is an open plane door. Above him is a bright blue sign, which reads: “Your fearless next.” Tshabaalala appears to be coaxing others in the plane to take a leap.
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The slogan relates to a campaign launched by Standard Bank in July last year, inviting entrepreneurs to submit business plans in return for support and cash to amake their dreams a reality. The cartoon, however, refers to the recent closure of 91 bank branches and a cull of 1,200 staff members. The irony is jarring.
“When you are CEO of something as big as Standard Bank you are going to be in the public eye,” says Tshabalala from Standard Bank’s head offices in Rosebank, Johannesburg. “Having a thick skin is part of the job.”
Over the last two years Tshabalala’s skin has become thicker. Following the retirement of his co-chief executive Ben Kruger at the end of 2018 and after 33 years at the bank, Tshabalala has had to go it alone. Now, any criticism the bank faces falls directly on his shoulders.
“Since Ben left it has been lonely, that’s for sure,” says Tshabalala. “But we are lucky here that at the bank we do have a somewhat collegiate-based system. We work together and come to group decisions. But I am under no illusion of who is to blame when something goes wrong.”
Like elsewhere, South Africa’s banking sector is becoming increasingly digital. As a result, jobs are on the line – and in a country where unemployment is just under 30%, news of job losses does not sit well with the public. Nevertheless, this digitalization drive is necessary, says Tshabalala, if the bank wants to remain relevant.
The bank is spending a lot on technology, although no exact numbers are disclosed. A focus is on its core banking system, to streamline payment processes throughout Standard Bank’s branch network.
I don’t think our aim is to be a global bank but to be part of a global network to service Africa. Innovation and technology will help us realize our goal- Sim Tshabalala
“It reminds me of the time when Standard Bank started to roll out ATMs under the chief executive at the time, HP de Villiers,” says Tshabalala.
“He was hugely criticized by his peers and the media at the time for investing in these bulky machines that would allow people to access cash outside of a bank branch. The investment and installation of ATMs ate up returns on equity. Shareholders were just not happy. But we stuck it out and soon ATMs became an essential extension to the bank network.”
It might sound odd now, with blockchain and cryptocurrencies becoming mainstream, but Standard Bank was considered one of the most innovative banks in South Africa because of its focus on ATMs.
“This is the view we take now, as we look to update the bank,” he says. “It might cost us now, but the rewards will be big. I don’t think our aim is to be a global bank but to be part of a global network to service Africa. Innovation and technology will help us realize our goal.”
Independent thinking
Tshabalala’s independent thinking is something he developed at school and university. Born in Hlabisa in Kwa-Zulu Natal before moving to Soweto – the largest township in South Africa – his family placed a lot of focus on education. He was encouraged to work hard.
“I went to Sacred Heart School when I was 10 years old. It was, and still is, one of the most innovative schools,” says Tshabalala.
“It focused on integration and challenged the status quo. It took black kids just like me from the townships and we mixed with the white kids there. It was cutting edge in terms of its politics and its education.”
Brought up during apartheid, Tshabalala initially wanted to work as a human rights lawyer, and was heavily involved in student politics.
“I wanted to be part of the change I was seeing in South Africa at the time,” he says, “and I thought this was the right way. But after I returned from studying law at Notre Dame University in the USA [Tshabalala received a scholarship to go there], I realized I just didn’t want to be a lawyer. At all. I hated it.”
This was when he turned his sights on banking. After a long road trip with his pregnant wife in 2000, Tshabalala was approached by Standard Bank and decided he would take a job there.
“There are other ways in which you can fight for inclusion and fairness,” he says now. “One of them is through the access to finance.”
The he adds, in a most lawyerly way: “As long as we remain compliant in the process.”