Scaling AI responsibly remains an ongoing challenge for banks. (Image via ChatGPT)
South Africa on top banks are sharpening their digital The arms race, customer acquisition and transaction volume continues to increase, driven by mobile-first platforms.
This is according to PwC's leading bank analysis, which provides an overview of how local banks are leveraging technology to capture market growth and redefine customer experiences.
According to the report, despite the volatile global and domestic backdrop, banks have shown resilience while pursuing digital innovation as a key growth lever.
Combined headline earnings from major banks including Absa, Capitec, FirstRand, Investec, Nedbank and Standard Edge – Increase by 9.4% to R152.5 billion in 2025, reflecting disciplined cost control, improved credit quality and strong non-interest revenues.
PwC identifies digital transformation as the primary driver of competitive advantage contributing to maintaining financial sector balance sheet strength in 2025.
See also
Customer deposits combined reached R8.3 trillion, and gross loans and advances reached R6.8 trillion, highlighting the continued appetite for credit among households and businesses as the South African economy recovers.
“South Africa's major banks are driving intense competition on digital growth, with customer acquisition and transaction volumes growing through mobile-first platforms,” says PwC South Africa Banking and Capital Markets Partner Rivan Roopnarine.
“Investments in cloud-based core systems, hyperscaler platforms, and emerging technologies such as generative and agentic AI are helping banks accelerate modernization, increase operational efficiency, and deliver more personalized customer experiences.”
The adoption of artificial intelligence (AI) is becoming central to business strategy in the financial sector.
The report said banks are exploring autonomous agents for customer service, AI-augmented credit decisions, fraud detection and real-time analytics.
Yusuf Bismillah, PwC South Africa Digital Trust Partner, says: “AI is seen as a strategic business imperative – boosting productivity, enhancing decision making, and improving customer and employee experiences when thoughtfully deployed at scale.”
Customer centricity has emerged as a defining competitive differentiator. The report said that with banking products becoming commoditized across the retail, trade and corporate sectors, banks are redesigning operating models around customer segments.
“This enables focused investment in talent, technology and product innovation where demand is strongest, while maintaining efficiencies at scale in back-office operations. The goal is to blend digital convenience with human engagement, capturing the full spectrum of customer activity across the financial services and lifestyle ecosystem.”
Pan-African diversification is also supporting growth. The report said banks with regional influence are tapping investment opportunities in emerging consumer markets and infrastructure in sub-Saharan Africa, partnering with fintech firms and mobile money operators to increase their market share in domestic markets.
Additionally, cost optimization, streamlining operations and AI-enabled productivity tools continue to underpin sustainable earnings growth in the banking sector's competitive environment.
PwC highlights that while SA's major banks are well-capitalized and resilient, the sector faces ongoing challenges: scaling AI responsibly, separating customer relationships, competing with agile fintech entrants, and navigating increasing regulatory complexity, including post-crisis Basel reforms (a global regulatory framework) and evolving consumer protection requirements.
PwC Africa financial services leader, Costa Natsos, puts it succinctly: “The 2025 results reveal an industry that has navigated macro headwinds and in many cases achieved record earnings. The rise of AI, embedded finance and sustainable finance is redefining competitive advantage, and banks that act boldly in this cycle are likely to shape the next era of South African banking.”