Transformed financial services = healthy society, says Paul Hanratty

The second edition of the Sanlam Gauge has seen participation grow three-fold, from 3,154 companies in 2021 to 10,366 in 2022.

The financial services sector has shown good progress, with above-average results across the scorecard. While there is much to celebrate, there’s also much to be done. Comparative research over the past 10 years reveals a steep decline in contribution level scores across all companies from 2011 to 2022. It’s fair to say SA Inc is not as transformed as it says it is. 

This year’s report ranked the financial services sector third, behind agriculture and construction. Every sector is allocated a BBBEE contributor level according to criteria specific to its BBBEE sector code. Financial services scored 88%, which takes its contribution level to 4. 

Overall I am pleased with the progress our sector is showing year on year.

Lerato Ratsoma, MD of Empowerdex, commended the sector for above-average achievements across the board.

Presenting the results at the 2022 Sanlam Gauge conference, she said the industry’s score of 81% for ownership is much higher than average. The sector’s 61% for management and control is above average. Ratsoma suggested the focus on employment equity is particularly commendable and something for other industries to emulate. 

Our other focus is on financial inclusion - bringing more people into the net who were previously excluded. Our partnership with MTN has allowed us to reach people at scale. We already have 14-million policies, with an average premium of R4

Skills development scored 75%, but it needs to be noted that financial services skills development includes AIC spend (African, Indian, Coloured) and upskilling black leaders in mid to senior management roles. This makes maintaining 75% a more impressive feat.

Enterprise and Supplier Development (ESD) is at 70%, also above average. This is a particular focus area for Sanlam. At every level of our organisation we are investing heavily in giving SMMEs access to the finance, market and skills they need to thrive. 

Overall, the sector’s transformation journey is progressing robustly, albeit not as fast as we would collectively wish. 

The journey of deliberate transformation is not quick or easy, but we mustn’t overlook the progress we’ve made. For us at Sanlam, it’s all about continuing that progress. We’ve had some major highlights this year, including creating SA’s largest black-owned asset manager.

Asset managers are one of the most significant providers of capital, so this speaks to our broader commitment to the economy. 

Our other focus is on financial inclusion — bringing more people into the net who were previously excluded. Our partnership with MTN has allowed us to reach people at scale. We already have 14-million policies, with an average premium of R4. 

Ultimately, scorecards are important, but they’re not everything. SA has one of the best relative capital markets in the world thanks to its life insurance businesses.

It’s about building something sustainable of value. If we can increase the number of people who benefit from financial services, it will allow for a well-functioning economy that has a direct affect on the general health of society. 

I agree with my peer Pumla Ncapayi, CEO of the Financial Sector Transformation Council, that the financial services sector needs more emphasis on qualitative monitoring and measurement. We need more collaboration between our regulatory bodies, sector councils and general business. 

While we have a way to go, I believe the collective will is there to move the needle and make a difference. Our sector is hugely influential.

The Sanlam Gauge has shown us where we are at. Now it’s up to us to determine where we will go next.

** Paul Hanratty is CEO of Sanlam

• This article was paid for by Sanlam.