Backed by a sound regulatory and legal framework, the Western Cape financial and business sector is sophisticated and developed, providing a full range of services in commerce, insurance, retail and merchant banking, investment, mortgage lending and more. In fact, 74% of economic activity in the Western Cape is in services-related industries.
Cape Town is a top location in South Africa for global business services delivery. This is partly thanks to the city’s large and varied talent pool, superior infrastructure and good quality of life, as well as strong data-protection laws.
Many private investment and asset management services, as well as law firms, insurance brokers and other service companies, have based themselves in Cape Town and surrounds, with the city emerging as a significant financial services hub.
The finance, business, real estate and business services sector accounts for more than a third (34.6%) of the value added into the Western Cape economy, with the banking and services sector providing a gateway to the rest of Africa.
A number of insurance firms and financial advisory firms have their headquarters in Cape Town and Stellenbosch, and many global law firms have a presence in Cape Town.
Major centres such as Cape Town, Stellenbosch and George offer a sophisticated, First World living and working environment, and the Western Cape has a solid talent pool of qualified, experienced finance and business professionals.
Cape Town’s international outlook promotes innovation, and the talent pool is boosted by a number of world-class universities and multinational organisations.
Many foreign banks and investment institutions have set up South African operations, providing a launch pad into the rest of Africa.
The four key players in South Africa’s banking sector are First National Bank, Absa, Standard Bank and Nedbank – as well as Stellenbosch-based Capitec, which has opened the market to many previously excluded from the formal banking and financial sector.
All these institutions have offices in the province and nationally, and offer extensive services.
A number of top investment and financial advisors, such as Allan Gray, PwC, PSG Group and Investec, are based in the province, and there is a big presence of insurance companies, including Momentum, Metropolitan, Santam, Sanlam and Old Mutual.
The Western Cape has a fast-growing business process outsourcing (BPO) sector – global and regional companies that have set up BPO operations in the province range from technology, communications and financial services companies to legal and healthcare concerns.
Key reasons for this include the availability of staff with good English language skills and high empathy, cultural affinity with clients in the United Kingdom, Australia and – increasingly – the United States, and the province’s world-class infrastructure and enabling environment.
Cape Town is also in the same time zone as Europe, which is convenient for clients in that working hours overlap.
Other plus factors include high contact centre standards, growing capacity to provide next-generation digital services, significantly lower cost of operations than those in countries such as the UK and Australia, and government support in areas of skills development and infrastructure incentives.
South Africa was named as the “Offshoring Destination of the Year” at the 2018 Global Sourcing Association awards ceremony.
As a sophisticated financial and business centre, Cape Town provides the ideal entry to the financial and business markets of the rest of Africa.
Its fast-growing business process outsourcing sector and the relative affordability of doing business in the city add further to its appeal as a financial hub.
Growth in the finance, business and business services sector is consistent and will be further stimulated by the increasing percentage of South Africans with access to banking services and the growing middle class, as well as mobile and internet banking.
Financial institutions and agencies in the Western Cape are financially assisting small, medium and micro-enterprises, with a vast proportion of the labour force employed by small businesses. The province aims to drive investment and support in this sector.
The main agencies and funding support machines are:
- Small Enterprise Finance Agency
- Small Enterprise Development Agency
- South Africa Black Entrepreneurs Forum
- National Empowerment Fund
- Industrial Development Corporation
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