Kuda Makoni, Manager at Deloitte Consulting: Innovation is not optional

“The financial sector in South Africa is world class, and as a result faces similar challenges to the ones prevalent in more developed economies,” says Kuda Makoni, strategy and innovation manager at Deloitte Consulting. “However, South Africa is a developing nation which means our local CFOs also deal with some unique country-specific challenges”

Zimbabwe-born and trained Makoni has been with Deloitte for two years, after an initial career at EY. At the beginning of September 2011 he joined the banking team of the strategy and innovation department. “Specific examples of challenges faced by financial institutions in developing countries is the rise of non-traditional competitors like mobile network operators that are become increasingly active participants in the finance space,” he says. “Locally, CFOs are also grappling with the slow growth of the economy, the strongly fluctuating rand and a high amount of non-performing loans caused by consumers having less disposable income.” Emerging markets also have a unique challenge of a large unbanked population, which presents an opportunity for banks to tap into this market.

One of the results of the local struggles is that South African companies are eyeing opportunities elsewhere on the continent. “The banks are struggling to grow locally, which explains the move into Africa. Banks like FNB, Nedbank, Absa… are all focusing on expanding into the continent.” Consulting and audit firms like Deloitte are also leading the way north from their Johannesburg offices, says Makoni. “We have recently created Deloitte Africa. All of the so-called Big 4 firms are now focusing a lot of resources on Sub-Saharan Africa, which presents exciting opportunities. There is stiff competition, but we’re all working towards the same goal and the bigger the pie, the more opportunities for everyone.”

According to Makoni innovation is playing a key role in the banking industry, especially during these times of low growth. “The differentiating factor between competitors is innovation. Many banking products are very similar, however FNB was recently recognized as the most innovative bank in the world in 2012, so it is possible to do things differently. That is why innovation is definitely on top of the agendas of boards, CEOs and CFOs at the moment.”


The temptation to copy successful products from competitors is always there, admits Makoni. “Copying of concepts definitely occurs, which means any early mover advantage does not last long. That makes continuous innovation crucial – there is often limited time to relax.” CFOs are still known as the most risk adverse executives and Makoni has noticed they sometimes need to be reminded that innovation should not be put on the backburner. “But banks are definitely investing a lot towards innovation, because for them it is simply not optional. Going forward, innovation is going to be a key differentiator amongst banks. We’re seeing the same in short term insurance, which has almost become a commodity. They have to reduce costs to stay competitive – and again innovation is key.” There is also lot of convergence occurring between the insurers, banks, retailers and mobile network operators as a result innovation.


Makoni says his own main competency is transformation of the finance functions. “An example is a project I worked on with the main aim of optimising the supporting processes of a large bank’s Group Finance function. Reporting times weren’t at desired levels and there was insufficient and timely access to information. CFOs definitely get frustrated when such things are not operating optimally, especially under the current economic climate where companies are struggling to grow their revenues and are continuously looking for cost cutting options. Especially for banks, which are facing increasing regulatory requirements which are adding to their cost of doing business.”

According to Makoni young Chartered Accountants should not try to be ‘everything to everyone’ if they want to be successful. “I would say: choose your sweet spot, something you really enjoy doing. Get famous for something, get known for it. I think the market tends to reward specialists more than generalists.”

If you also would like to share your ideas with the CFO community and you want to be part of the leading CFO South Africa Community, you are most welcome to get in touch with CFO SA. Please contact Jurriën Morsch at [email protected]

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