Local banks score massive digital gains

Read time 3min 30sec
All the big banks in SA are witnessing continued growth in digital adoption by customers.
All the big banks in SA are witnessing continued growth in digital adoption by customers.

South Africans have embraced digital banking channels, with the major banks processing hundreds of billions of rands through the platforms during the past financial year.

In a statement issued yesterday, First National Bank (FNB) said in the 12 months to June 2018, South African consumers processed approximately R105 billion worth of payments through FNB's digital channels, which include its app, online and cellphone banking.

The bank says consumers made an average of R8.7 billion worth of digital payments each month over the period.

"An efficient digital payments ecosystem is fundamental to building a compelling digital banking offering. We believe our digital banking offering provides superior value when you look at cost, convenience, security and incentives such as rewards," says Raj Makanjee, CEO of FNB Retail.

FNB recently revealed its overall digital migration journey saw a significant boost in the previous financial year, with payments on its app growing by 63%.

The bank notes that over the years, its eBucks rewards programme has been a key incentive for customers to migrate to its digital banking platforms. The bank has disbursed more than R10 billion worth of eBucks over the course of the programme.

"We are excited by future opportunities to consistently improve the delivery of transactional, lending, investments and insurance solutions to our business. On payments specifically, we are increasingly offering more support to merchants to adequately support the payments evolution that's currently being pioneered by consumers," Makanjee adds.

In its 2018 interim results, Standard Bank says customers are increasingly adopting and transacting on digital platforms as well as non-cash, digital products, such as Instant Money and SnapScan.

It adds that customers continued to indicate their preference for digital, rather than physical channels, with the number of active mobile banking users growing by 7%, and the number of transactions performed on this channel growing strongly by 58%.

In the Africa region, Standard Bank says the number of transactions performed by customers on digital platforms far outstripped the number performed in physical channels.

It points out that approximately 24 million transactions were performed on mobile banking, up from approximately 11 million in 1H17. On the other hand, transactions performed in physical channels declined by 8%.

Absa, in its interim financial results for the reporting period ended 30 June 2018, says it increased digitisation of acquisition channels such as in-app account opening, virtual and other digital capabilities such as WhatsApp banking.

During the period, Absa says in the rest of Africa region, its efficiency was supported by continued growth in digital adoption by customers across a number of channels, including iATM (withdrawal and deposits), mobile banking, point of sale and Internet banking. Transactional volumes from mobile and Internet banking grew by 15%, the bank notes.

Capitec, in its financial results published this week, says it has one million activated banking app clients.

The bank, which mainly serves lower-income users, says more than 3.7 million clients used unstructured supplementary service data (USSD) to transact, and there was a 71% increase in clients using its banking app over the past year.

It adds that self-service banking transactions include the banking app, Internet banking, USSD (mostly used by clients who do not have smartphones), in-branch self-service terminals and dual note recyclers (DNRs).

According to Capitec, 74% of all possible transactions were performed by clients on self-service banking channels in 2018, compared to 62% in 2017. Transaction volumes for in-branch self-service terminals increased by 491%, and by 124% for DNRs in the current year.

Meanwhile, in Q3 2018, Nedbank says its Nedbank Money app reached more than one million downloads, with 42 services added since launch. It is targeting over 180 services by 2020.

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