Lerato Lamola, a partner for financial regulation at Weber Wentzel.
The banks and insurance businesses we know today will look very different in the near future. This change, driven by emerging technologies, changing customer preferences and a massive increase in competition, is forcing traditional financial services businesses to evolve or risk being left behind.
That was the word from financial services executives who attended an executive roundtable hosted by IBM in partnership with ITWeb in Stellenbosch last week. At the event, participants debated how AI is disrupting financial services and discussed what they are doing to use AI more effectively.
During his presentation, Clive Sagadevan, CTO of IBM South Africa, shared the findings of IBM's Enterprise 2030. report. The report is based on interviews with nearly 2,000 global business executives and suggests that AI will not just enhance business models, but become the business model. “According to the study, 79% of South African executives believe AI will make a valuable contribution to revenues by 2030, but only 23% have a clear idea of how they are actually going to develop these new revenue streams.”
Sagdevan said, “As AI becomes more ubiquitous, differentiation is important. If everyone is using the same models, everyone will get the same results.” He said the winners of the future will be those businesses that use AI creatively and strategically. “By 2030, we expect to see a mix of large and small language models, as well as a fair amount of customization.” And the officers in the room agreed. AI investment cannot be driven by a desire to do what others are doing or a fear of being left behind; They should be based on broader business strategy and aim to solve key business problems.
Clive Sagdevan, CTO of IBM South Africa.
Sagdevan said, “AI cannot be the destination. AI is the fuel that organizations will use to drive efficiency, productivity gains, and better decision making.” But if you're not feeding the model the right data, you'll get nowhere. Here, roundtable participants discussed what 'good data' looks like and emphasized that without clear definitions and context, even the most sophisticated AI models are little more than a powerful engine running on the wrong fuel.
While he acknowledged the urgency of AI adoption, Sagdevan cautioned that without embedding real business logic in the technology and adopting it strategically, results will be limited.
Business case for governance, compliance
Roundtable attendees agreed that AI has incredible potential, but cautioned that there is still a lot to learn about it, which is why clear governance frameworks and guardrails are essential.
During the event, Lerato Lamola, Partner, Financial Regulatory at Weber Wentzel, discussed several key trends that will impact the financial sector in 2026, from modernization of the payments ecosystem to open finance. Highlighting the regulatory side of this conversation and what institutions like the Financial Sector Conduct Authority (FSCA) and the South African Reserve Bank (SARB) are looking at when it comes to AI projects, he said the risks are closely linked to specific use cases.
For example, a bank may use AI to deliver services and products to the customer, which seems harmless enough. But if a bank can't question a decision and can't clearly explain how the AI tool reached it, it has a regulatory and ethical liability, he warned. “Remember that you're dealing with people's money, and if people feel they can't trust you, they won't do business with you.”
Lamola said that although there is no AI regulation in South Africa at the moment, it does not mean that businesses can do whatever they want. “Regulators have indicated that they are looking at this, and when they impose regulation, chances are high that they are going to scrutinize the financial services sector first because a flawed algorithm or a biased model can have an impact on the entire economy. Now, really, is the time to get things on top of things,” she said. “The regulator will only get involved where there is mischief to be investigated. If the financial services sector manages data responsibly, makes decisions with transparency, is clear about who is responsible for what and takes the customer with it on the journey, then there is nothing to worry about.”