South African retail banking has the potential to become fully digital in just five years if banks provide easy-to-use, secure channels, and make human assistance accessible when needed.
This was one of the key findings of a report titled: The Future of Retail Banking in South Africa. It highlighted that two-thirds of South Africans expect the country’s banks to make a full transition to digital banking within five years, and was released at an event held in Sandton, Boston Consulting Group (BCG) in partnership with Discovery Bank.
Differing from other reports of this nature, it looks at the future of digitisation and retail banking from a customer and not a banking perspective. The report analyses the views of 1 000 South Africans from all walks of life and 400 businesses and experts from across the globe to understand what customers expect, where banks need to potentially catch up and how it can be done.
The report states that South Africans are further ahead of the technology curve than their banks. The vast majority – more than 86 percent – of South Africans across income bands, prefer conducting banking digitally, and that more than 50 percent of customers over the age of 60 years are comfortable using a fully digital bank.
Hylton Kallner, the CEO of Discovery Bank, said, “The availability of automatic teller machines, where a customer has access to 10 banks through one ATM, is one example of how servicing has evolved. When you make the leap from a physical bank to one that is completely digital, you’re literally in the palm of the client’s hand.”
“Clients are no longer limited by “business hours” or geography and joining a bank or opening an account is no longer dependent on where banks are situated. In fact, we have seen that nearly 50% of accounts are opened after business hours or over weekends. With 30 to 40 taps on a mobile device, technology enables the entire process within minutes and without the need to visit a branch,” he added.
“With the increased level of sophistication embedded in modern banking apps, we find that clients access their accounts almost every day to monitor activity, to manage money and to make payments. Call centres, enabled with video conferencing and other live chat technology, are becoming the human interface of banks as we use technology to deliver strong banking capabilities on the front end and create complete servicing models in a virtual environment,” Kallner said.
Lineshree Moodley, the interim country manager and vice-president at Visa SSA, said “When we look at what customers are doing on e-commerce, we see some key categories with groceries at the top followed by fashion retailers, hobbies, DIY. Those are the things consumers are starting to spend on from the e-commerce perspective. In South Africa we have certainly seen a lot of traction in online food delivery for groceries,” Moodley said.
She said from their perspective, it was a matter of how seamless experiences were being built for customers.
“We have seen through our research that customers want convenience, stability, reliability and over and above that, security. I think those are the things that contributed to the explosion that we saw in e-commerce as well as contactless payments.”
Moodley saidfrom a banking perspective, there was a need to think about the experiences that could be facilitated for the customer and the ease of use in terms of the channels that they were using.
BUSINESS REPORT