Nedbank’s multibillion-rand IT refresh programme has seen it gain a healthy return on investment, with the big-four bank seeing an upswing in digitally-active customers.
The bank says its ongoing digital transformation strategy, called Managed Evolution, helped to increase the number of retail clients taking to its online platforms.
The R9 billion initiative, introduced several years ago, seeks to build a modern technology platform for the bank and its clients.
This has seen its Money App garner 13% year-on-year growth in transaction volumes, with active customers hitting the three million mark.
The bank says its investment in artificial intelligence (AI)-based services, generative AI, cloud computing, open banking and chatbots led to its USSD, web and mobile apps growing steadily over the last few years.
Chipo Mushwana, executive of emerging innovation and payments at Nedbank , told ITWeb that the growth in popularity of digital channels and payments is indicative of the role that South Africa’s digital payments market is increasingly playing as a catalyst for economic growth and driver of its rapidly evolving digital economy.
According to Mushwana, factors that contributed to the uptake in the bank’s digital channels include the increase in digitalisation of local businesses, SA’s growing e-commerce sector, the high risks associated with cash and consumers’ evolving preference for digital payments.
While there are still several barriers to consumers relying solely on digital channels for transacting, the local payments landscape is going through a period of rapid and exciting change, as more consumers recognise the value and convenience of digital channels, she points out.
“Nedbank has invested heavily into modernising its tech stack over the past few years, including a significant focus on services in the cloud, where we have spent billions of rand. This intensive focus has paid off handsomely in terms of overall cost savings, costs to serve and in enhancing our ability to distribute our products and services,” noted Mushwana.
“Usage of our Nedbank Money app has increased by 16% from the end of July last year, and we've grown the number of registered Money App users from 559 000 in 2018 to more than three million today.”
“We see this growth as validation of the investment we've made, not just into our technology, but also in driving the right digital behaviours amongst our clients. On the Money app alone, we sell about 90 000 products every month, with value-added services (VAS) the fastest growing product set on the platform.”
Mushwana points out SA has come a long way since the era of paying with cheques, to a slew of digital payment options now driving the digital economy – including contactless payments, card-not-present transactions, crypto-currency, EFT, biometrics, PayShap and using wearables to transact.
“We've come a long way, and this digital evolution continues to become more seamless. When you look back at the industrial revolutions throughout history, and the different industries that have been disrupted by technology, financial services was one of the last to transform; but it is now leapfrogging most other industries in its digital advancement.
“Today, everybody wants to participate in, or partner with, financial services. From telecoms operators to retailers, various industries that traditionally were not involved in financial services are now embracing it and expanding what it can do. In effect, this wide-scale adoption is ‘opening up the financial services pie,’ and when it comes to payments, the bigger the pie, the better for everybody involved, especially consumers.
“Payments, are the heart and soul of how value is exchanged, not just between individuals, but also between businesses, and that is the heartbeat of every economy.”
Horizons of innovation
According to Mushwana, Nedbank's payment strategy is premised on leveraging technology to drive the business agenda and the bank’s imperatives, but most importantly, it seeks to service South African customers’ evolving needs.
She points out that innovation is key to this approach and, in this regard, the bank takes a three-pronged approach.
“We think about innovation across three horizons – firstly, creating a micro innovation within the payment sphere selected by the consumer, and we then drive the right engagement towards digital platforms by making them aware of their convenience.
“The second horizon entails combining a bit of the old (traditional), with some of the new innovations, and we bring them together from an innovation perspective. The third horizon is focused on completely new technologies that we may not have seen, nor tried yet.
“Horizon one and two are very easy to implement because of the nature of technologies, which are easy for people to understand.”
The third horizon, she notes, ensures Nedbank’s innovation and tech teams always stay at the cusp of emerging technologies that are launching across the globe, ensuring continuous innovation and the introduction of emerging services that speak to the local context.
The Nedbank Avo SuperApp has also seen ongoing growth, and now has almost three million customers, as SA’s e-commerce sector continues on an upward trajectory.
A super app, also described as a digital mall, is a mobile application that provides umbrella services – a trend that gained momentum in the past three years, accelerated by more people taking to online channels as a result of the COVID-19 pandemic.
Since its launch in 2020, the Avo app has connected South Africans to over 25 000 businesses registered on the platform, with a suite of new services added to the platform constantly.
Avo Solar, launched in August 2023, has processed over 100 residential installations, of which the majority have been financed by Nedbank.
“Less than five years since the launch of Avo, the platform is enjoying more than 28% year-on-year growth in terms of revenues. We've also increased the number of shopping categories available on the app. Today, you can shop for appliances, technology, groceries and takeaways, get a solar PV installation at your home, and even buy a car. It's not called a SuperApp for nothing,” she concludes.
Share