Technological, Organizational and Environmental Framework for Digital Transformation in South African Financial Service Providers

Abstract

This paper addresses technological, organizational and environmental contexts as experienced within South African Financial Service Providers, with respect to digital transformation. Although digital transformation is well studied, the research problem is that literature inadequately addresses how these three contexts manifest and play a role as financial service providers transform to digital business. Informed by interpretivist philosophy stance and case study strategy, this paper shows how digital transformation is enabled or inhibited by contextual influences. The paper argues that digital transformation ought to manifest cognizant of the context in which the financial service provider finds itself. To this point, the paper conceptualises a framework that may help in the digital business transformation.

Modelling Digital Transformation Within the Financial Sector

“…Digital transformation is considered the step beyond digitalization (Reis & Melao, 2023) representing a paradigm shift (Fernandez-Vidal, Perotti, Gonzalez, & Gasco, 2022) because it covers a wide range of activities, including the changing of business operations, products, and processes (Modiba & Kekwaletswe, 2020). Diener and Spacek (2021) have pointed out that in practice, a deeper understanding of the relationship between technological and organizational culture, as well as institutional change within certain rules and regulations, is required for digital transformation.…”

“…Digital transformation is considered a driving factor that offers a solution to the challenges faced by the banks with impacts broad and varied in the financial sector, and banks are confronted to change their methods and business models to adopt a customer-centric approach to remain competitive (Diener & Spacek, 2021). In the digital economy, both innovation and transformation are essential for generating value (Modiba & Kekwaletswe, 2020). Therefore, FSPs are constantly requiring overhauls of all company functions, including products, processes, and company structure to meet increased customer demands.…”

Prospects for Digital Transformation in Rural South Africa's Small and Medium-Sized Enterprises

“…The authors recognized the contextual nature of the discourse surrounding digital transformation globally and the fact that a system that works in the Western world might not produce the desired results in Africa. Tremendous progress has been made in terms of enterprise digitization in Europe, North America, and Asia over the last two decades [8], however, in developing nations, notably in South Africa, the South African government's efforts to make the country more digital have not yielded major dividends. In order to salvage the situation, Modiba & Kekwaletswe [8] further submit that small firms are trying on their own to experiment with available opportunities that exist in their domains.…”

“…Tremendous progress has been made in terms of enterprise digitization in Europe, North America, and Asia over the last two decades [8], however, in developing nations, notably in South Africa, the South African government's efforts to make the country more digital have not yielded major dividends. In order to salvage the situation, Modiba & Kekwaletswe [8] further submit that small firms are trying on their own to experiment with available opportunities that exist in their domains. Moreover, the issue of size is often considered whenever matters pertaining to small and medium-sized businesses are being discussed, the size standards for defining small and medium-sized enterprises in the South African context is analysed below.…”