Standard Bank FD Arno Daehnke discusses African countries' buzz, innovation and work ethic.
As Standard Bank financial director, and part of the core C-suite at the African banking giant, Dr Arno Daehnke is a well-known figure in South African and regional financial circles. In May this year, he took home the “Moving into Africa” prize at the annual CFO Awards event. From his days in the group’s Treasury and Capital Management function, to his now three years in the FD role, Arno has built up a reputation as a “finance guy” who brings a rigorous scientific approach to both the books and strategy; he is, after all, a doctorate-holding seismologist by training.
Arno sees Lots of parallels between the scientific and finance fields. “Critical thinking is important for both. It forms the basis of how we analyse problems. And both require smart use of data too.
“In finance, we use data to analyse all our decision-making. We are transitioning from descriptive (i.e. ‘what happened’) and diagnostic (i.e. ‘why did it happen’) analytics, to predictive (‘what will happen’) and prescriptive (‘how can we make it happen’) analytics. As we have access to more and more computing power, and we can use technology like machine learning or artificial intelligence, there is more and more opportunity to get that rigour of data and analysis well established, and to use that to drive the strategy of the company on that basis.”
When pressed, Arno has said his colleagues would describe him as fair, forward-thinking, meticulous, and scrupulous.
Into Africa
“In 2019 Sim [CEO Sim Tshabalala] and I are going to nearly all of the countries in which Standard Bank group operates. That’s 21 countries. We are on the road basically every two weeks.”
But rather than a chore, Arno speaks fondly and energetically about this time with the regional operations. “I was recently in Malawi. Last week I was in Botswana and eSwatini, and before that Kenya, Ghana, Uganda, Mozambique and Nigeria.”
He won’t be drawn into naming a favourite, saying: “All the cities and countries are very special and all are completely unique. One cannot make the mistake of assuming they will be similar. They are all their own spaces.”
Arno draws a little different learning from each region. “The buzz and energy in Nigeria is unbelievable. The pace of how things move, and how hard-working people in Nigeria are. I have also really enjoyed seeing the innovation which is happening in Kenya. It is very apparent how innovative the Kenya fintech and mobile operators are. That’s why it is called Silicon Savannah. I think that is quite apt.”
Compare that with Zimbabwe, he says. “That country and its people are really suffering at the moment, living in tremendous hardship with limited electricity, fuel shortages, currency shortages, a hyper-inflation environment, so you realise how well we actually have it in South Africa. We do tend to complain a lot as South Africans about our various challenges that we are facing in our own country, but if you see what some of our neighbours are going through, we should be very grateful.”
Cultivating a culture of innovation
Although he doesn’t like to compare the countries, Arno admits that he thinks South Africans would do well to heed the example of Kenya when it comes to innovation and entrepreneurship.
“Sometimes I think us South Africans we can learn a lot from the approach to innovation in Kenya and other African countries. Safaricom completely changed the mobile payment game, for the whole of the country.”
Conversely Mpesa-like services have never managed to gain solid ground and critical mass in South Africa. He also thinks we need to open up to innovation in terms of things like power provision.
“In Kenya, they have something called M-Kopa which is a solution for providing green energy. It is very cost efficient, and through this, even those totally off-grid can get enjoy access to electricity in an affordable manner.”
What’s holding back South Africans? Arno thinks the stakes are high and we are risk averse. “Innovation is premised on the fact that you must fail fast and cheap, right? Our young people must have a mindset to try things, to experiment. If it doesn't work, move on. But without that curious mindset, one cannot innovate.”
It’s a mindset he wants to see embraced in the group too. “Yes, in banking it is a different thing to think about failing or making mistakes, because sometimes the financial consequences are very severe. You can imagine if you have lent to someone and you haven't done all of your due diligence, or if you put in a new IT system which isn't thoroughly tested and you make no payments or the wrong payments. You can imagine what the impact on our clients would be. But at the same time, we must have an environment where people can try things. That's a key factor for innovation.”
Riding the regulation tides
In terms of the regulator's role, Arno is positive but offers constructive guidance. He says, he believes our regulator is progressive, pointing to the work the Reserve Bank has been enabling in terms of testing blockchain technology. “The SARB does encourage innovation. For example, with blockchain they are on the forefront of the regulators globally. I must congratulate them on that. They also have a fintech innovation unit.”
The benefits of being bookish
Finally, we asked him, what reading is on his bedside table right now? Like Arno himself, his reading choices are broad and challenging.
“I don’t favour a specific genre. I will read whatever comes my way, and piques my interest. I do like history, though, so I read about historical conflict, especially the first and second world wars. I also read a lot on business transformation and digital transformation. I find that the Economist is a great source, as are research articles from the top consulting firms – specifically focusing on the impact of the Fourth Industrial Revolution.”
However, he adds that he enjoys fiction as well. “I think it is important to read fiction in order to understand humanity, how people think, and how people live their lives. After all, as Archbishop Desmond Tutu said: ‘All of our humanity is dependent upon recognising the humanity in others’.”
Arno doesn’t limit himself to intellectual pursuits, however, and he also enjoys kiteboarding, mountain biking and skiing – activities that stimulate all the senses and help him to de-stress.
