South Africa’s First National Bank (FNB) has reported a
jump in transaction growth through mobile banking and, according to
the lender, the channel is making affordable banking accessible to
all. Line Wiid, CEO for FNB Smart Solutions, tells Meghna Mukerjee
how inclusion continues to be a key priority for FNB.
Go deeper with GlobalData
South
Africa-based First National Bank (FNB) has reported a 150% surge in
transaction growth for its mobile banking service for December 2011
compared to the previous 12 month period.
Since the launch of its mobile
banking application on 20 July 2011, FNB – a subsidiary of South
Africa’s second-largest bank by market value FirstRand – has
reported over ZAR1.5bn ($195.1m) in transactions.
With the South African market
increasingly taking to mobile banking, FNB is trying to reach out
to new customers across the region, and cellphone banking in
particular has enabled the lender to start “addressing the subject
of making affordable banking accessible to all”, according to
FNB.
Line Wiid, CEO for FNB Smart
Solutions, tells RBI: “It is evident from the increasing
number of South Africans choosing to bank via their cellphones – of
the 4m cellphone banking customers we have, 72% are from the
mainstream market, that is customers earning up to ZAR100,000 per
annum – there is a growing level of acceptance and trust.”
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By GlobalDataAccording to Wiid, the high cost of
physical infrastructure and vast distances with remote, difficult
to reach areas in South Africa have enabled FNB to centre its
approach to banking on individual customers and their “needs,
lifestyle and aspirations”.
“We do not see one mass or have a
one-size-fits-all approach on how we make financial services
available to the previously unbanked as well as the under-banked,”
says Wiid.
“We operate on the premise that our
customers are diverse with different needs and behaviour and
therefore we offer our customers solutions that are affordable and
easy to use to suit their banking requirements.
“We have an organisational culture
to find innovative solutions to business problems that add value to
our customers – to make banking more accessible, affordable and
easy to use,” she says.
In January, South Africa-based bank
Capitec announced significant branch refurbishment and expansion
plans aiming to appeal to all segments of the market, including the
mass market as well as entry-level customers.
FNB already has a low cost branch
network – FNB EasyPlan – targeted at the mass market segment.
“FNB EasyPlan is a low-cost,
paper-less and cashless network of branches located in high density
areas such as taxi ranks, shopping centres, with some situated in
rural areas. We currently have 151 EasyPlan branches,” says
Wiid.
EasyPlan branches are restricted to
selling four products – Easy Account, Easy Loan, Easy Funeral Cover
and Easy Invest.
“We have taken away the frills and
made the product simple and easy to understand for customers. We
have created a welcoming environment at our branches – there are no
revolving doors, no bank tellers,” says Wiid.
“We hire bank consultants that
speak the languages of the community we operate in, educate
customers on our products and we hold no cash in the branch, making
the cost of running a branch much lower than regular branches and
in turn giving our customers affordable banking.”
FNB EasyPlan branches have ATMs
with a ‘real time cash-deposit-facility’ – ATM Advance – that
enables customers to deposit cash in order to pay their bills.
“These ATMs do not require cards to
deposit cash; cash can be deposited in the customer’s bank account
or any other FNB account. With these ATMs customers pay lower bank
charges compared to doing ‘over- the-counter-deposits’ in a
branch,” explains Wiid.
FNB has taken several other steps
to reach the unbanked and under-banked.
It was the first bank to introduce
mini ATMs to the South African market in 2003, as part of its
strategy to grow its footprint and address financial inclusion by
being present in remote areas of South Africa. There are currently
1,144 mini ATMs, with 100 more to be rolled out over the course of
2012.
“Mini ATMs allow customers to use
the devices in the same way they would use a normal ATM and select
a type of transaction,” says Wiid.
Cellphone banking and FNB’s eWallet
also allow the lender to make banking “more accessible to as many
South Africans as possible”, especially those who previously had no
access to banking.
Through FNB’s Pay2Cell service,
customers can transfer money into another FNB account – without the
need of a bank account number – by using a cellphone number, and
the recipient does not need to have a bank account to access the
cash.
In 2011, FNB’s eWallet has been
introduced to markets outside South Africa such as Botswana,
Lesotho, Zambia and Swaziland, and the bank’s next step in 2012 is
to enable the eWallets to have further cross-border
functionality.
FNB also offers customers temporary
loans through various channels, including mobile banking, that are
“no frills, no fuss and no surprises” loans with immediate access
to cash.
Banking mainstream customers have
two key elements in designing solutions, according Wiid.
“Firstly, it is the complexity in
the designing of easy to understand products and solutions and
secondly, in educating the customers on how to effectively manage
their finances.”
“Over the past six years, FNB has
run extensive financial literacy programmes. This included
face-to-face radio programmes and electronic education
campaigns.”
FNB reaches 17m people with its ‘Be
financially Smart’ literacy programmes and, according to Wiid, the
concept financial inclusion is evolving.
“To us, it is more than creating access to affordable banking.
It is about helping South Africans become financially independent
and empowered to play a role in building a sustainable growing
economy,” says Wiid.
