Big four bank First National Bank (FNB) is open to embracing crypto-currencies like Bitcoin, something it shut the door to last year.
So said FNB CEO Jacques Celliers, yesterday in a telephonic interview with ITWeb, following the bank’s announcement of its financial results for the six months to 31 December 2020.
In November 2019, FNB announced it was closing down crypto-related bank accounts, much to the anger of local digital currency players.
The bank notified the crypto-currency exchanges that it will close accounts for them in 2020, citing the risks the digital currencies present.
However, crypto-currencies are getting a lot of traction after being embraced by large multinational companies such as PayPal, Square, Mastercard and Tesla, among others.
In SA, there is currently no fintech-specific regulation for crypto assets, but crypto assets are also not prohibited.
However, the South African government is making steady progress in its efforts to regulate crypto-currencies.
The South African Reserve Bank recently announced the Intergovernmental Fintech Working Group, a group of South African financial sector regulators, has drafted a policy position paper on crypto assets.
As more and more companies embrace crypto-currencies, Celliers said FNB is not blind to these developments that have seen Bitcoin breaching the $50 000 mark recently.
“We are not naïve to the things that are going on around the world. New innovations are happening and people are investing in different instruments. So whatever instrument that finds itself getting regulated, we will be there. We are no different to the likes of PayPal,” Celliers said.
“In fact, we did the first digital currency globally, which was eBucks, in 2000. So we are all in to this digital future of digital currencies and blockchain, and what we are just waiting for is the regulatory framework to find its way for us to be able to participate.”
He noted that if customers want crypto, FNB will be ready to supply it. “There is no difference to the things that we handle like dollars and pounds in our infrastructure today.”
On why the bank decided to shut down crypto-backed accounts in the first place, Celliers said: “We have an exchange control environment that we have to satisfy. So when we closed the crypto accounts, we were not in a position to satisfy those obligations.”
Branches here to stay
Meanwhile, in its results yesterday, FNB revealed that although its profit went down, it was encouraged by the growth of its digital platforms amid the COVID-19 pandemic.
This as the bank notched up a record six million digitally-active customers.
Commenting on the feat, Celliers said: “We are almost reaching a stage where every customer, as part of the account that they own, also has an interface to that account. It’s just like for every account that one has, there is plastic linked to it.
“We believe this control panel, as an interface to your account, is basically going to become non-negotiable. In the beginning, people were nervous about these digital channels and interfaces.”
He noted that earlier, the bank got a big lift in its digital journey by leveraging technologies such as cellphone banking.
“More recently, with COVID, we saw more and more people adopting our channels. With every technology, you have early adopters and laggards. What we are dealing with at the moment is the remaining customers that would have traditionally not taken up digital channels. All of a sudden, these channels have become meaningful to them.
“We love the fact that the adoption has reached a level where almost 70% of the customers have embraced these channels, and I believe it will be a swift progress to 100% penetration where every customer will use one of our interfaces to control their finances.”
However, Celliers pointed out that even though the digital platforms are performing well, there are no immediate plans to close branches.
“We have a very deliberate strategy to invest in our points of presence. It’s unlike the olden days when we had a few very large branches. Rather think of us now as having a small office that is very nimble for convenience for communities in society.
“Even if you were to come to one of our branches today, let’s say you don’t have a device or you don’t have the know-how on what you want to do, in our branch environment, we now have the digital zones.
“So our branches are very relevant to all these money management activities. There are so many conversations that are needed in financial services and that’s why we say we will keep on investing in our branch footprint.”