Bank makes IT work

Capitec Bank is using IT to offer clients real-time services at a cost less than an Mzansi account, the government benchmark for low-cost banking. The approach is gaining the bank about 1 000 new accounts a day, it says.

"It doesn`t help to come into banking offering the same as everybody else, you have to offer something different," says Carl Fischer, the bank`s CE for marketing and corporate affairs. He says the bank, licensed in 2001, does this by using IT to cut costs, eliminate the branch back-office and keep its operations paperless and real-time.

"We have 70 people to administer 300 branches," he says. "Our IT [setup] allows us to provide a service that is quick, accessible and simple. It also gives us a competitive advantage on speed of service and cost. Our technology platform allows consultants to focus on client needs, not admin or on assessing the client`s security or risk profile."

The bank opened its 300th branch in Alexandra, Johannesburg, last week. Bank chairman Michiel le Roux says Capitec is probably the most computerised bank in the world. This assists in realising the institution`s four core values: accessibility, affordability, simplicity and service, he says. The bank plans to open a further 45 branches by February 2008 and bring up the number of ATMs to 700. It had 407 deployed this February.

Although the bank`s current focus is on the working-class, it plans to expand its services to the middle-class through the Internet.

Le Roux says the bank believes in "instant gratification". It takes about 10 minutes to open an account or apply for a loan - and when the client leaves the bank, his or her new debit card or loan is already active, he explains.

The 10-minute window includes a credit check, and the verification required by the Reserve Bank and Financial Intelligence Centre Act. Employees capture the data and take photos of applicants, all of which are transmitted to Capitec`s Stellenbosch head office. The client does not fill in any forms, Le Roux adds.

Fischer says IT makes up roughly 15% of the R800 000 to R1 million it costs to open a branch. That includes cameras, biometrics, scanners and printers. "All of this provides us a largely admin-free branch. The consultant is the interface between the client and our technology, which takes the paper away, because it is about verification.

He admits the bank is "hyper-dependent" on connectivity. "If the links are down, we effectively can`t operate," he says, but adds this happens rarely. "Broadband is not an issue for us, even though biometrics and photographs are demanding in terms of data weight."

By year-end, the bank will also have 100 mobile branches that allow it to take real-time non-cash banking to its customers in their workplace. Fischer says they arrange access to workspaces where the bank has 50 to 100 clients. "The bulk of people who need to use banks cannot get to them during banking hours. So we use technology to get to them."

Fischer says the mobile branch uses the same biometrics and cameras as fixed branches and gains real-time connectivity via 3G.

Biometrics is currently largely used to verify the consultant`s identity. However, in the next few months it will also be rolled-out to clients to lessen the reliance on cards and PINs, says Fischer.

"With cards and PINs, the client always runs a risk. But, including biometrics makes it absolutely foolproof. There is no way to fraudulently transact," he says.

The bank is also keen to reduce the amount of cash clients carry. For that reason the bank is rolling out 100 additional balance card readers at selected retailers, to encourage e-payment.

Capitec will move to smart technology in line with the industry. "Credit card fraud is very high," he says. "The banks don`t talk about it too loudly, but it is big, very big."

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