Lerato Lamola, partner in financial regulation at Weber Wenzel.
The business of banking and insurance as we know it today will look very different in the near future. This change, driven by emerging technologies, changing customer preferences, and a significant increase in competition, is forcing traditional financial services businesses to evolve or risk falling behind.
These were the words of financial services executives who took part in an executive roundtable hosted by IBM in partnership with ITWeb in Stellenbosch last week. At the event, participants discussed how AI is disrupting financial services and shared what they are doing to use AI more effectively.
Clive Sagadevan, CTO of IBM South Africa, shared the findings of IBM’s Enterprise 2030 report during his presentation. The report, based on interviews with nearly 2,000 global business executives, suggests that AI will not only enhance business models, but will become business models. “Research shows that 79% of South African executives believe that AI will make a valuable contribution to the bottom line by 2030, but only 23% have a clear idea of how they will actually develop these new revenue streams.”
“As AI becomes more pervasive, differentiation becomes important. If everyone is using similar models, everyone will achieve similar results,” Sagadevan said. Future winners will be those that use AI creatively and strategically, he added. “By 2030, we expect to see a mix of small and large language models, and a significant amount of customization,” and the executives in the room agreed. Investments in AI are not driven by a desire to do what everyone else is doing or fear of falling behind. They must be based on a broader business strategy and aim to solve key business problems.
Clive Sagadevan, CTO of IBM South Africa, said:
“AI cannot be a destination; it is the fuel that organizations use to drive efficiency, increased productivity, and better decision-making,” Sagadevan said. But if you don’t feed the model the right data, nothing will happen. Here, roundtable participants discussed what “good data” looks like, emphasizing that without clear definition and context, even the most sophisticated AI models are just powerful engines running on the wrong fuel.
While Sagadevan acknowledged the urgency to implement AI, he cautioned that unless real business logic is built into the technology and approached strategically, results will remain limited.
Governance and compliance business case
Roundtable participants agreed that AI has great potential, but cautioned that there is still much to learn about AI, and clear governance frameworks and guardrails are essential.
During the event, Lerato Lamola, Financial Regulation Partner at Webber Wentzel, discussed some of the key trends that will impact the financial sector in 2026, from modernizing the payments ecosystem to open finance. Unpacking the regulatory side of the conversation, he highlighted what institutions such as the Financial Sector Conduct Authority (FSCA) and the South African Reserve Bank (SARB) are looking at when it comes to AI projects, noting that risks are closely linked to specific use cases.
For example, banks might use AI to offer services and products to their customers, which seems harmless enough. However, he warned that if banks cannot interrogate decision-making and clearly explain how their AI tools arrived at their decisions, this becomes a regulatory and ethical liability. “Remember, you’re dealing with people’s money. If people feel they can’t trust you, they won’t do business with you.”
South Africa currently has no regulations regarding AI, but Lamola points out that this does not mean companies can do whatever they want. “Regulators have indicated they are considering this issue, and when they do introduce regulations, the financial services sector is likely to be the first to be scrutinized, as flawed algorithms and biased models can have ripple effects throughout the economy. Now is the time to get things under control,” she said. “Regulators will only get involved if there is fraudulent activity that they can investigate. If the financial services sector manages data responsibly, makes decisions transparently, makes it clear who is responsible for what, and brings customers along, then there is no need to worry.”
