Malcolm Lowe Head of Treasury at Standard Bank explains the importance of having an integrated technology platform in Africa

Standard Bank, South Africa’s largest bank by assets and earnings, has consistently won awards for its treasury and cash management services in Africa. The strong client centric approach combined with a comprehensive product set are key contributing factors but the bank would not have been able to deliver such a high quality service without a strong technological infrastructure.

Sitting on a market capitalization of $27bn, Standard Bank operates in 17 countries across the region ranging from neighboring Swaziland and Namibia to Nigeria, Kenya and Angola. Three years ago, in the wake of the global financial crisis, the bank changed direction, refocusing its efforts on Africa. To this end it disposed its operations in markets outside the region including Argentina and Russia and more recently sold its 60% interest in its London based global markets business to the Industrial and Commercial Bank of China — which has a 20% stake in the bank.

One of the main drivers was to tap into the economic growth of the region which is outpacing not only a number of other emerging markets but also advanced economies (see spotlight below). Delivering products and services to such a heterogeneous region is not easy. The economies are not only progressing at their own pace but each country also has its own regulatory frameworks as well as banking, corporate and investment cultures.

The treasury function has also developed differently in each country although there are common African bank issues. These range from the absence of formal treasury software to a reliance on spreadsheets and core systems, disparate platforms and batch processing which is not in real time. Matters have been compounded by regulatory compliance and report generation that are in multiple formats and cash flows that are manually projected and calculated.

Standard Bank has an advantage in that it can leverage its experience as one of South Africa’s leading and oldest banks. However, the role of technology should not be underestimated in driving the bank forward. Six years ago, the bank took the decision to replace its legacy systems including City Dealer with Calypso’s front-to-back office integrated platform for its global markets business, which until recently included treasury management. The treasury function is currently being separated from the global markets division – due to a tighter regulatory environment – with Standard Bank focusing its treasury business in South Africa and the larger economies of Africa, Nigeria and Kenya. “Technology has been one of the biggest challenges,” says Malcolm Lowe. “When I started my regional role with Standard Bank in 1996, some countries didn’t even have the basic Reuters infrastructure or the internet. We used City Dealer for our global markets business but as the volumes and business grew, the technology quickly became outdated. We had achieved some improvements in our front office processing but there were still inefficiencies in the back end. The main issue was around data integration and we decided to replace and rationalize the different platforms that we were operating with a centrally maintained and fully integrated platform that could be rolled out across the bank’s global market business in Africa.”

Standard Bank already had experience using Calypso, having employed its centralized solution for its London foreign exchange, money market and fixed income as well as its South African money market back office activities. “The platform sits in South Africa and one of the biggest challenges we had in rolling it out across our 17 African operations.  It was a long and challenging journey but we now have one robust front-to-back operating platform for our FX, fixed income, derivatives and money management operations and have seen massive improvements.”

For example, the automation of processes and the increased straight through processing (STP) has not only led to better control but also reduced operational as well as market risk. Human error has been minimized as manual processes and the use of spreadsheets has been eradicated. In addition, the centralized approach provides real-time risk and position management across all products, greater market surveillance, significantly enhanced reporting, monitoring and processing.

The consolidation of several systems and interfaces has also resulted in substantial savings. “The Calypso technology has brought great cost benefits and given us greater control over the environment,” says Lowe. “It has also enabled us to improve our risk management which is especially important in a diverse region like Africa.”

Equally as important, according to Lowe, the Calypso technology sharpened Standard Bank’s competitive edge by enabling it to refocus its energy and resources on developing a full suite of value add and client centric value solutions. This is particularly valuable in the current period where the bank has started the process of spinning off its treasury operations from its global markets group for the larger countries of the region. The process which will take two years is in response to the growing demand for treasury products as companies expand domestically, regionally and internationally.

Malcolm Lowe, Malcolm Lowe, Head of Treasury, Global Markets Africa, Corporate Investment Banking, Standard Bank 

Malcolm worked for ANZ Bank in Zimbabwe for a period of 13 years where he held various positions in banking and was responsible for the implementation of a fully functional Treasury business for ANZ Bank in Zimbabwe in 1987.  Malcolm joined the Standard Bank Group in 1992 following the sale of the ANZ Bank operations to Standard Bank of South Africa and during the late 1990’s he held the position of General Manager Corporate Services with responsibility for the entire Corporate Banking activities in Zimbabwe. In 2001 Malcolm was transferred to the Standard Bank Africa Head Office in Johannesburg where he was appointed Regional Treasurer for Africa with responsibility for 15 Treasury operations in Africa.  Malcolm is currently a senior Executive in the Standard Bank Global Markets Africa business and fulfills a number of key business and operational roles across the continent.


Over the past few months, a spate of studies from the World Bank, the International Monetary Fund (IMF) and the African Development Bank (AfDB) have confirmed that Africa is one of the fastest growing regions. This is not only due to its rich natural resources but also the demographics of a young working population, urbanization and rising consumer spending.

The stable macro­economic and financial environment of sub-Saharan Africa – a key focus area for Standard Bank – has been particularly highlighted in these reports.  Projections may vary but the general consensus is that growth is on an upward trajectory. The IMF forecasts GDP increasing to 6% this year from 5% in 2013 while the World Bank estimates 5.3% in 2014, rising to 5.4% next year and 5.5% in 2016. Key reasons cited include strong domestic demand, especially investment in export-related infrastructure, and relatively low inflation which has in the past strangled the region’s prospects.

World Bank GDP

The engines of growth are the largest economies, most notably Nigeria, Kenya, Ethiopia, Ghana and Angola. For example, the IMF has predicted that Nigeria, which is the second largest economy after South Africa, will see its GDP grow by 7.3% this year, up from 6.4% while Kenya’s economy is expected to expand by 5.9% before accelerating to 6.3% in 2015, on the back of improved tax collection and credit growth. However, even the smaller mineral-exporting and low-income countries such as the Ivory Coast, the Democratic Republic of Congo, Mozambique and Sierra Leone are expected to power ahead.

This progress has translated into increased levels of trade and investment, with the annual rate of foreign direct investment increasing fivefold since 2000. In addition, global companies such as conglomerate General Electric, automaker General Motors and consumer giant Procter & Gamble are increasingly turning their attention away from Asia to the frontier markets of Africa. Until recently, if US companies planted roots, it was in the continent’s biggest economies such as South Africa and Nigeria, or those with mineral wealth like Angola but they are now looking at opportunities across the continent.

On the domestic front, the costs of starting a business have fallen by more than two-thirds over the past seven years, while delays for starting a business have been halved.  The foundations for sustained improvement has also been laid by stronger regional economic co-operation and intra-African trade as well as a more active private sector due to improved economic governance and a better business climate on the continent, according to the AfDB’s Annual Development Effectiveness Report.

Technology is also playing its role particularly in the banking industry.  For example, a new report released in January 2014 by mobile trade association MEF shows that the African continent is leading the world in the uptake of mobile banking.  According to the report, in the African cluster of countries studied, there is more mobile banking activity than the global average of 66% – with engagement rates in Nigeria, Kenya and South Africa at 76%, 92% and 78%, respectively.

Given the region’s vast potential, it is not surprising that international and regional banks are making a greater push. The challenges are still present in the form of poor infrastructure as well as political and market risks especially in countries such as Kenya and Nigeria. Also despite the increased cooperation Africa is still a fragmented continent with different regimes, regulations and cultures. This is why success will be predicated on banks not only having the requisite experience, skills and product sets but also strong relationships and on the ground teams.

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