Bankers bare (almost) all at First Tuesday

First Tuesday, a monthly gathering of IT players, yesterday hosted representatives of SA`s Big Four in the financial services industry - ABSA, Standard Bank, FirstRand and Nedcor - at Vodaworld.

Chaired by Peter Bruce, editor of the Financial Mail, the panel discussed issues relevant to South African e-commerce and online financial services, and revealed some of their strategies to date and going forward.

Martin Pienaar, Nedbank`s assistant GM for electronic banking, responded to the suggestion that although Nedbank claims to marry technology and banking, it has not been visibly active in this space. Pienaar commented that Nedbank has been focusing on phase one of its electronic banking strategy - e-enabling internal processes, and building on the back-end transaction engine.

Nedbank has also concentrated on enhancing its business-to-consumer offering, Pienaar said, citing its project-enabling merchants that wish to accept online payments. However, he acknowledged that Nedbank believes there is more value to be generated in the business-to-business space. In that respect, the bank would be leveraging off its relationships with OmniLink`s GoZone and the trading hub Miraculum, the joint venture between Nedbank, Old Mutual and Dimension Data.

ABSA`s online banking initiative, Redmouse, was announced in January this year, and by the third quarter, the project, a joint venture between ABSA and Datatec, was canned. Tasso Tsoukalas, ABSA channel marketing GM, explained why the project referred to in the industry as "Deadmouse" failed to see the light of day.

Tsoukalas attributed an estimated return on investment period of five years and an inordinately high Reserve Bank capital requirement as reasons for the project`s demise. "We decided instead to focus on building on the ABSA brand, which itself is a fledgling brand, having only been around for 22 months."

ABSA is comfortable with its decision, Tsoukalas said, and is taking the online financial services sector seriously; it has several initiatives planned to add value to the services currently used by around 150 000 ABSA clients.

Standard Bank company Bluebean.com and the FirstRand e-cash initiative eBucks.com, two relative newcomers using the platform, discussed their offerings. Michael Jordaan, eBucks.com CEO, said the move away from physical money was seeded by the current resurgence of e-currency, the so-called second wave discussed in financial publications.

People trust banks, but they don`t like them.

Michael Jordaan, CEO, eBucks.com

Jordaan believes the failure of similar e-currency-based loyalty programmes stems from consumers` disenchantment with offerings that lacked functionality, and precluded non-credit card holders - qualities he said are firmly entrenched in the eBucks offering.

The issue of threats from global competitors and non-traditional players is strong, all panellists agreed. Jordaan observed: "People trust banks, but they don`t like them." Cellular operators are a prime example of an industry sector that is perfectly poised to step into the financial services provision industry, he said.

"South African consumers are almost irrationally loyal, but banks do need to be aware of the threat."

A lot of people believe our target market is the 25- to 35-year-old group, but they forget about what we call the Silver Surfers - retirees who have discovered the Internet.

Dave Parratt, MD, Bluebean.com

But as Bluebean.com MD Dave Parratt noted, banking sites are second only to porn sites when it comes to stickiness. The primary concern is reaching the right target market - something he says has been achieved by the Bluebean offering. "A lot of people believe our target market is the 25- to 35-year-old group, but they forget about we call the Silver Surfers - retirees who have discovered the Internet."

The panellists also discussed the need for cheaper access to online services, saying that Telkom`s deregulation is key to this goal. Pending legislation on the validity of e-mail correspondence and clarification of authentication standards will also affect the way the market swings. One thing is certain, Parratt noted - the market is too small not to succumb to a shakeout.

Pertinent issues raised by audience members revolved around seemingly excessive service charges, and a significant lack of hands-on training for customers learning to use ATMs and Internet banking in branches. As one audience member commented: "This is a tech audience, and even we struggle to understand [the offerings]."

Related stories:
Another e-procurement hub sees the light of day
eBucks launched, goes live on Monday
Standard Bank spills its Bluebean.com