Standard Chartered Bank has decided to pull out of the local online banking sector, meaning the eventual death of 20Twenty, the local Internet bank that survived the demise of its original parent.
The local subsidiary of the British-owned global banking group originally bought 20Twenty two years ago for about R10 million from the curators of the defunct Saambou bank that went belly up 18 months before that.
However, a loyal customer base, representing about 40 000 account-holders, actively supported the retention of 20Twenty, despite it only having one product at the time. The bank was seen as an alternative to the staid major commercial banks.
"This is a very bad move by Standard Chartered. They will lose a lot of goodwill in the market. Many of these account-holders were extremely young and loyal, and they represent the decision-makers of tomorrow," says Alan Levin, chairman of the Internet Society of SA and 20Twenty account-holder.
Standard Chartered SA corporate affairs manager Lauren Callie says 20Twenty ceased to exist as a separate operating entity earlier this year and had been absorbed into the bank's consumer division.
"We took a review of our operations here and have come to the decision to play to our strengths. In this case it means the mortgage market. For instance, Standard Chartered is the largest mortgage lender in Asia (not counting Japan)," she says.
Callie says one of the options is to sell the online service to another financial services firm.
She says about 100 staff will be affected and will be given the option of severance packages above the statutory requirements, or possible redeployment locally and abroad.
"We really appreciate the loyalty of our customer base and we will let them know as soon as possible about the outcome," she says.
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