Investments made by banks to beef up their digital capabilities and offer clients cost-effective services appear to be paying off.
Detailed figures disclosed in the financial results of four of the five largest banks in the country show e-migration is fast gaining traction.
Nedbank, which is aiming to create a “more agile, competitive and digital” bank, reported a 68% increase in value of transactions facilitated via its app suite to R18.6bn during the six months ended 30 June 2017. According to the bank, transactions were driven by an increase in the number “digitally active and enabled clients”, achieved in part through its nationwide network of intelligent depositor ATMs and 303 new digitally focused branches.
It has identified a number of cost-saving initiatives in its retail and business banking unit. It expects to derive around 30% of the cost savings through revenue opportunities from data-driven intelligence, new digital technologies and innovation integration.
Standard Bank, too, reported good progress. Mobile transactions across its domestic personal and business banking unit rose 55% to almost 500m transactions over the same period while its ATM and teller volumes fell by 5% and 15% respectively. It recorded 100m digital transactions across its rest of Africa business, up 47% from the previous corresponding period.
The bank is currently focusing on enhancing its digital capabilities, reskilling staff and revising its branch formats in a bid to meet changing client expectations and improving client experience.
FirstRand reported a 7% increase in fee and commission income growth at subsidiary FNB, partly driven by strong transaction volume growth in the banks digital and electronic channels, for the financial year ended 30 June 2017.
Transactions
FNB reported a 68% increase in transactions via its banking app to just under 100m. Mobile transactions recorded by the bank rose 20% to 43.8m while Internet banking transactions ticked up 7% to almost 215m.
Capitec, voted South Africa’s best digital bank in the 2017 SITEisfaction survey, reported 220 753 cellphone and Internet banking transactions over the six months ended 31 August 2017, up 39% year-on-year. It also reported a marked increase at self-service terminals from 116 to 2 899, with overall self-service transactions — which include cellphone and Internet banking, self-service terminals and dual note recyclers — increasing 43%. In an analyst presentation, it said 71% of all possible transactions were done on self-help devices with clients banking via the remote app or phone saving a combined R165m.
In general, banks charge clients different fees for services rendered across different channels, with branch fees being the highest and digital fees being the lowest or in some cases nonexistent. It is widely expected that banks’ continued investment in enhancing their digital capabilities will lead to a more efficient provision of services and lower transaction fees for clients.
Barclays Africa Group did not disclose transaction volumes across its channels during the six months ended 30 June 2017. It did, however, note an 11% increase in amortisation of intangible assets as a result of investment in digital, data and automation capabilities. It also reported a 6% increase in South African banking costs to R14.4bn, part of which relates to continued investment in digital channels.
- This article was originally published on Moneyweb and is used here with permission