South African Banking: Data Privacy and Customer Profiling

David Barkhuisen, Esri South Africa’s senior geospatial consultant for data. The South African banking industry has long been dominated by a small group of well-established brands. But this has changed significantly in recent years, as several challenger brands have made strong strides in this space. Increasingly, retailers, insurers and telecoms companies – most backed by big banks – are expanding into the financial services space. As the market becomes more crowded, advantage increasingly lies not in what banks “sell”, but in how deeply they understand their customers. According to PwC research, the product itself is less of a differentiator; instead, personalised experiences tailored to individual customer needs are the primary value proposition and competitive battleground. For Esri South Africa’s senior geospatial consultant for data, David Barkhuisen, geospatial data and analytics allow banks to better quantify where opportunities lie, target specific demographics and deliver a more personalised experience. “As so many aspects of modern banking go digital, some might argue that geography is becoming irrelevant, but it actually makes understanding geography even more valuable,” he says. Banks sit on a massive amount of data that can easily be enriched by making it spatial. “Often, banks have this data but don't even realise it’s spatial, like home loan data and transaction history. All of this shows where customers live, work and spend, which the bank can use to offer customers benefits that make sense in their world.” Perhaps one of the best examples of where this can add value is loyalty and rewards programmes, he adds. For example, a bank might launch a new loyalty programme and sign up a popular restaurant group as a rewards partner. The partnership allows customers to earn cashback or points at hundreds of outlets across the country. But this restaurant group has only a handful of stores outside the Western Cape, which means banking customers in Johannesburg or Durban can’t really benefit from the partnership. “If customers aren’t earning points, the value of the loyalty and rewards programme diminishes. This is why it’s important to know where your customers are so you can choose partners strategically. You could lose an entire province's worth of loyalty customers simply because your partner doesn’t operate in a certain area.” Location data also adds value as more banks consolidate their ATM and branch footprints. Standard Bank recently reported that withdrawal values at its physical locations plummeted by 70% between 2020 and 2025. This has prompted a widespread roll-out of cashless branches. “While this shift in customer behaviour tells a story about how customers are transacting, it’s likely that there are some branches where withdrawal rates remain steady. If the bank isn’t using geospatial data to understand customer behaviour, there’s a chance that it could decide to go cashless in a community where customers still favour cash.” Geospatial data gives banks something that regular banking data often lacks: context. It doesn’t just show what a customer did, but shows where it happened, says Barkhuisen. By connecting transactions to a location, banks can identify patterns and target customers more strategically, he adds. “This additional layer of insight can reveal where customers might be underserved and what services are convenient and relevant in different locations. This helps banks make better decisions in a market where the little differences in customer experience separate one brand from another.”