Sustainable Digital Transformation Strategies for Financial Inclusion by South African Banks

Abstract

South African banks are using digital transformation to create financial products and services aimed at enhancing financial inclusion for underserved populations. The long- term performance and impact of digital transformation for enhancing financial inclusion requires the integration of sustainability into the strategy. The purpose of this qualitative study is to explore sustainable digital transformation strategies that can be employed by South African banks for financial inclusion. Deductive thematic analysis was applied to analyse qualitative data collected using semi-structured interviews. The study used the theoretical model Strategic Alignment Model (SAM) to help explore how to integrate digital transformation strategy, sustainability and financial inclusion objectives. The findings highlighted that the digital solutions implemented for financial inclusion by banks must be aligned to the sustainability factors, namely (1) economic, which states that solutions must be cost-effective and affordable for underserved communities; (2) environmental, where financial solutions must be implemented through digital, which promotes paperless solutions; and (3) social, where targeted underserved communities must be included in the design of the digital solution aimed at meeting their needs. This study contributes to the ongoing research on sustainability digital transformation specifically for the banking sector. It also contributes to research on strategic alignment and the use of the Strategic Alignment Model (SAM) for aligning business and technology strategies. The implications of this study suggest that banks must ensure strategic alignment between digital transformation initiatives, sustainability factors and business objectives for financial inclusion to ensure long-term effects for the underserved populations.