Absa has provided training sessions on generative artificial intelligence (GenAI) to 20% of its workforce, the banking group’s CIO has said.
Speaking to ITWeb TV, Absa Group CIO Johnson Idesoh provided this insight, along with an update on the bank’s digital transformation, including its adoption of cloud, plans around crypto-currencies, digital identity, metaverse and its outlook on quantum computing.
After noting the banking group has “30 000 colleagues”, the bulk of whom are based in South Africa, as part of the change management programmes for digital transformation, he said: “We've trained about 6 000 people in GenAI.
“We have open ‘come as you are’ sessions where we take you through training on how to leverage GenAI. We demystify it first and foremost, and then help people see it as an opportunity, which they themselves can then obviously skill up in.”
Absa spends approximately 25% of its operating expenses on technology, Idesoh said. In its 2023 financial report, Absa reported operating costs of R54.5 billion. He added the banking group spends R3 billion on digital transformation every year.
Idesoh noted the bank initially explains technology in relation to its role as part of the bank’s purpose, values and brand. He added it’s important to create excitement and make information and training accessible.
He pointed to the significance of being astute with cloud as a foundation from which to leverage GenAI, and added Absa has been active with cloud since 2016.
There were many benefits that come from transitioning to cloud, including automation of security and operational controls, reliability of service and scaling costs to meet increased customer demand, he said.
Mainframe vs cloud
“We’re about a third of the way through our cloud adoption journey now. We’re on a number of software-as-a-service platforms – Salesforce, Workday, ServiceNow. We've got a lot of applications already on cloud. A lot of our payments infrastructure already leverages cloud underneath and we're going to drive that a lot more over the next…two to three years.
“Our intent is not to migrate mainframe to the cloud. I know some companies have chosen to do it. Whenever we adopt cloud, we're looking for the business value first, so to replace mainframe as an infrastructure with cloud as an infrastructure.
“Mainframe software is 30 to 40 years old and was developed when banking was a completely different paradigm than it is today. Our strategy is going to be much more modernised in-cloud or on-cloud first, rather than migrate from the mainframe to cloud. Many big banks will have a mainframe for a long, long time.”
He further added that close to 1 000 employees in Absa Technology have gained certifications in cloud technology this year.
Providing more detail on digital adoption rates among customers, Idesoh said that of the group’s 12.5 million retail banking customers across the continent, 4.6 million are digitally active − a figure that’s growing about 12% every year.
He added that 80% of business customers (SMMEs to corporates) use the bank’s digital platform. “We went through a separations process in the late 2010s (splitting from Barclays) and one of the choices we made was to invest in digitalising our corporate business, so the remaining 20% is really just a matter of time.”
Regarding blockchain, Idesoh said the bank is interested in two areas – stablecoin (a crypto-currency pegged to a stable asset, such as gold or fiat currency) and digital identity.
“The whole area of a stable coin is one area that we think is only over time going to become more prevalent. The jury is still out if it will be company-backed, country-backed, central reserve bank-backed. But look across the world and you see a lot of companies, regulators or central banks looking at that.”
Asked if he thought recent developments in normalising crypto-currency in SA meant its use as an everyday currency was on the horizon, Idesoh said: “The short answer is we're expecting it to happen. We, like many banks, are looking very carefully at this area.
“It's still quite early, it still has to scale, but certainly that's one of the areas that we're working on and watching very carefully.”
On digital identity, he said Absa partnered with several other banks five or so years ago, and banking use cases would be focused on onboarding and identity verification.
“What I find quite exciting in SA right now is the (recently-held) SARB payments conference; this whole concept of digital identity is now being driven from the central bank and that could be a game-changer.
“I've always personally thought there's no reason why, on the African continent, we can't lead on blockchain and its use, for instance, in digital identity payments and the stable coin.”
The metaverse is a topic that experienced a lot of attention in 2020/2021, but now the hype has subsided, what is Absa’s take on it? “We've not bought a stake in the metaverse, but we certainly have active work under way.”
Idesoh added that the COVID pandemic-driven shift to hybrid working changed employee onboarding expectations and the need for dedicated physical locations. “The first areas we see it being really useful is onboarding colleagues to the bank, as a way of inducting them into Absa.”
Quantum horizon
Absa is watching quantum computing developments carefully, Idesoh said. “Earlier this year, I was with some quantum researchers; there are quantum computers available today. They're not yet scalable, there are still issues with reliability and so on, but there are a number of companies today that you can buy a quantum computer from.
“This scenario is one we've got an acute focus on and we're talking about to our colleagues across the bank.
“The first area that quantum computing will present is the threat – security, but very quickly thereafter in areas like risk modelling, think of AI powered by quantum. I do think there's a fair chance that before this decade is out, we will start to see some of that. When people ask me what's the urgency in digital transformation? What's the urgency in data or adopting AI and cloud? My answer is it's preparing you for this next frontier, which, in my view, is closer than many of us realise.
“Having looked at this more and more over the past two to three years, I'm getting a sense it's an era that is evolving fast. It’s something that could happen at any point.”
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