FNB app transaction volumes now surpass online banking

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First National Bank CEO Jacques Celliers.
First National Bank CEO Jacques Celliers.

First National Bank (FNB) is seeing accelerated adoption of its mobile banking app and growth in the usage of its digital channels.

FNB told ITWeb its banking app had over 2.8 million active users in SA by the end of December 2018, a 12% increase on the 2.5 million active app users the bank had at the end of June 2018.

The bank has added around a million app users since June 2017 when it had just over 1.8 million. Overall, the bank has 8.2 million customers in SA, so around a third of those clients use the app.

Financial transactions on the FNB app also grew by 52% year-on-year and have now surpassed the transaction volumes on online banking. This is according to the unaudited interim results, for the six months ended 31 December 2018, of FNB's parent company FirstRand.

"The growth rates of the FNB app have been growing stronger than online for quite some time. But obviously now it's surpassed transaction volumes, however not on values," FNB CEO Jacques Celliers told ITWeb in an interview.

"I think there is still a bit of a habit to use online to do large value payments, but from a volume perspective, certainly the app has become very convenient, and all of the little transactions on a day-to-day basis are definitely more app-based. Just the efficiency and convenience of it in your pocket the whole time, I think that's a brilliant thing."

However, he notes FNB does not believe the different channels should compete with each other.

"A long time ago, the distribution models were almost like you had to choose whether you wanted to have an online relationship, or you wanted to have a physical relationship. Nowadays, our channels all support each other.

"Sometimes the customer wants to come in and talk to us, sometimes they sit at home on the Internet, sometimes they use the app and sometimes they call us. So, the experience that people have on these multiple interfaces is something we've been working on for a long time," Celliers explains.

However, he says mobile is now seeing regular interaction from customers who tend to use the app multiple times a day.

"Those multiple interactions allow us an opportunity to build data around the customer's context and offer them contextual offers. For example, if someone is stuck overseas and they are short of money and they log in to see their balance, then we can see there is no money in the credit card and we can somehow make a plan. Maybe we didn't know that they were overseas until we saw their login from a different country."

FNB says sales of products and services via its various digital platforms in both assisted and unassisted environments have also seen a strong take-up from customers.

Its eWallet volumes grew to over 20 million transactions, with value increasing more than 25% to over R12 billion for the six months to December. The period also saw the introduction of eWallet eXtra, a mobile-only bank account which offers advanced functionality, with over half a billion rand in funds transacted already.

App security

Celliers says the uptick in the penetration of the app also has something to do with the app becoming an important security measure. In FNB online banking you are now often prompted to open the app to verify transactions or changes as an extra security measure.

"It's another form of authentication and approval process. A lot of that is going to be done through the app or cellphone banking on USSD, but mostly the app, for security purposes. It is going to become almost like you won't be able to operate your bank account if you are not registered with the app," he says.

"We also want to get rid of any forms of e-mailing or SMSing customers; all the old formats of communications which have over time become the ones used by fraudsters. So that in future when you get messages in any form, you'll know that if it doesn't go into the app, you know you can just ignore it because it's probably fake.

"That is where we are going, so this whole security world I think is going to force almost a 100% penetration into the app platform."

However, Celliers acknowledges there are currently still customers without the app.

"It's a bit of a journey, but I think the value proposition is huge, especially for those that are scared of technology. More and more we say 'the solution for your fear lies in the technology'. People are scared to use online banking; meanwhile, all of our security features are built into online. I can't protect you when you walk around with cash but I can protect you if your data and your payments are electronic."

"Fortunately, over the last two decades, we have built up a tech-savvy client base so our customers actually want more of this stuff. There might be a few customers that might take a little bit longer, but I think the pace of this migration and adoption is incredible."

He says the bank is moving from its previous digital phase to a platform phase, where all interactions will in future happen on the FNB platform.

Payment innovations

As of last week, FNB customers now have the option to use Samsung Pay to make contactless payments at almost any payment terminal in SA.

In terms of Samsung Pay's adoption by customers, Celliers says it's still "early days" and "not off the charts yet".

"We just love payments and all of the innovation around payments, so whether it's Apple Pay or Samsung Pay or whatever, we will keep on participating in these things.

"When you think about these payment innovations, we ultimately see a customer wanting to leave their money with us, but once we have someone's primary bank relationship, we obviously then have to satisfy the different forms that they would want to use to access their money.

"We have to go with the waves of payment innovations because it's not as if one of them is going to win this game."

Last week, Standard Bank reported massive gains in its digital banking platforms, saying its digital channels now eclipse its traditional platforms.

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