Digital Technologies and the Cross-Border Expansion of South African Banks

Abstract

This chapter explores the role of Information and Communication Technologies (ICTs) in the international development of South African banks. It is argued that South African banks derive important advantages from the use of ICTs in their expansion into neighbouring countries. Using Dunning’s (1989, 1988) eclectic approach as a mechanism with which to assess the evidence supporting this argument, ICT is explored both as an ownership specific capacity, as a locational specific factor influencing the geographical pattern of international expansion, and as a facilitator of the internalization of cross-border banking networks. Through an investigation of the significance of digital technologies in the cross-border expansion of South African banks, including case studies of Stanbic and ABSA, this chapter highlights the opportunities and challenges confronting such organizations. In so doing, the chapter will contribute to the understanding of intra-African foreign direct investment in the banking sector and the emerging digital economy in developing countries.