Nedbank, one of South Africa’s leading financial institutions, has successfully concluded its extensive ‘Managed Evolution’ IT modernization project, investing a substantial R11.7 billion over nine years. Initiated in 2016, this strategic initiative aimed to overhaul the bank’s legacy systems, transitioning to a more modular, cloud-based architecture to enhance efficiency, scalability, and innovation.
Chief Operations Officer Mfundo Nkuhlu highlighted that the project’s completion marks a significant milestone in Nedbank’s commitment to digital excellence. The final phase, involving the delivery of the core banking platform, was completed at the end of last year, signifying the culmination of the bank’s efforts to modernize its IT infrastructure.
Strategic Outcomes and Digital Growth
The completion of the ‘Managed Evolution’ project has yielded notable benefits for Nedbank and its clientele. The bank’s modernized technology platform has been instrumental in supporting the launch of new transactional products and services, leading to continued double-digit growth in digital-related metrics and higher levels of cross-selling.
In 2024, active users of the Nedbank Money app increased by 14% to 2.7 million, with transaction volumes and values rising by 16% and 21%, respectively. Additionally, digitally-active retail clients grew by 7% to 3.1 million, representing 70% of retail main-banked clients. These metrics underscore Nedbank’s success in enhancing client satisfaction and expanding its digital footprint.
Financial Performance and Shareholder Returns
Nedbank’s financial performance reflects the positive impact of its digital transformation. The bank reported an 8% increase in headline earnings, reaching R16.9 billion, and a return on equity (ROE) of 15.8%, up from 15.1% in the previous period. These robust results have enabled the declaration of a final dividend of 1,104 cents per share, marking an 8% increase at a payout ratio of 57%.
Ongoing Investment in Emerging Technologies
Despite the completion of the ‘Managed Evolution’ program, Nedbank remains committed to continuous technological advancement. The bank plans to invest approximately R2 billion annually in emerging technologies, including artificial intelligence (AI), generative AI (GenAI), machine learning, and robotic process automation. These investments aim to drive innovation, optimize costs, and streamline processes, ensuring Nedbank remains at the forefront of the rapidly evolving fintech landscape.
To harness the potential of data-driven strategies, Nedbank has established a dedicated data and insights team. This team collaborates across various departments to monetize data effectively while mitigating associated risks, aligning with the bank’s focus on using data and analytics to develop comprehensive products for clients.
Future Outlook
Nedbank’s successful completion of its IT modernization project positions the bank to leverage advanced technologies, enhancing its service offerings and operational efficiency. By embracing AI and other emerging technologies, Nedbank aims to maintain its competitive edge, deliver superior client experiences, and drive sustainable growth in the digital era.
