As more South Africans familiarise themselves with the Internet and the many advantages offered by online transacting, First National Bank (FNB) says it has experienced strong demand for its online banking service.
"Internet banking achieved significant growth in customer numbers, volumes and values during the past year, with a total of 375 000 private customers registered at 30 June 2005. Transactions to the value of R112.7 billion were processed during the year compared to 2004`s R78.9 billion, an increase of 43%," says Chris Kotze, CEO of FNB Online.
Across all client segments, Kotze says FNB has a total of around 450 000 customers using some form of online banking whether via Internet-type-connectivity, such as Business Internet Solutions and Internet Banking or via host-to-host connectivity. "At current growth rates this number should reach 500 000 early in 2006," he notes.
Kotze says the high growth rates can be attributed to a number of factors including the increasing acceptance of technology and the Internet by a large portion of the banking population. According to www.internetworldstats.com, some five million South Africans use the Internet regularly in 2005, a growth of 37% year on year from 2004. "Furthermore, the cost of connectivity has come down substantially while the availability of more broadband services - such as ADSL, 3G and iBurst - has improved access and speed with the capability to provide more online services and value adds," he explains.
With the nature of the Internet as a particularly effective channel for banking services, Kotze says it has proven to be a particularly successful example of eBusiness in the South African market. "Our online banking service has been very well received, as it is easy to use and yet offers probably the most secure online banking solution available in this or any market, with unique features that are not available to any other bank," he says.
These features include the Digitag device which generates a random code for third party verification and the inContact SMS service which reports on every transaction made on an FNB account.
Kotze also points out that online banking offers lower charges than traditional methods, and thus is favoured by cost-conscious customers. "There is also an increasing appreciation for the convenience of time saving and all-hours access, while there is a growing range of financial services being offered online," he continues.
At the same time, he warns that the increasing usage of online banking has also attracted a heightened focus of criminal activities in various forms. "Scams such as phishing (where criminals attempt to get your banking details by posing to be a credible company), pharming and the 419 con continue to present a challenge for customers and the banks themselves," says Kotze, explaining that banks are responding with increasingly sophisticated access controls, data security mechanisms and consumer education.
"Despite these attempts from fraudsters, users generally indicate a high level of satisfaction with online banking security and this form of payment continues to compare well from a payment risk perspective with cash and cheques," he concludes.
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