In the ever-changing economic landscape of South Africa, where interest rates have been steadily increasing and inflation levels remain uncertain, the collective sigh of relief when interest rates were not hiked at the end of July was almost audible. Unfortunately, this momentary respite might be short-lived as the Reserve Bank Governor has hinted that the peak of short-term interest rates may not yet have been reached.

By Vanesha Palani, executive: transactional, forex and investment products at Nedbank

Irrespective of which way rates and inflation trend in the coming months, the pressure on consumers is likely to remain for the foreseeable future. The dark shadow of load shedding continues to hang over the country, fuel prices remain volatile and, while food inflation seems to be slowing, the price we’re all paying at the tills for our baskets of groceries continues to rise every week.

As the pressure on consumers continues to mount due to all these factors, banks are faced with a profound opportunity to step up and play a crucial role in supporting their customers through highly personalised services and solutions and a commitment to creating real value.

This concept of value creation extends far beyond the mere provision of affordable fees. While it’s important that banking customers have access to affordable fees, true value is defined by the ability of banks to empower their customers, helping them to understand that money well managed can make a real difference to them, and proactively transforming every transaction, interaction, and touchpoint into tangible benefits that enhance their lives.

Achieving this ability to constantly add meaningful value requires that banks don’t view value creation as a secondary function. Rather, creating value needs to be at the heart of what they do and central to their strategies and plans. Value creation needs to be part of every bank’s DNA.

Equally important is the fact that the value-creation strategy needs to be actionable. It doesn’t help to tell cash-strapped customers that their bank has a strategy to add value to their lives. They need to experience that value through every encounter and interaction with their bank. And that requires banks to take a practical approach to delivering on their value commitments. At Nedbank, we believe that delivery on a value-creation promise requires an approach built on four key cornerstones:

* Don’t tell clients what to do, partner with them for value accumulation – Customers need more than financial advice; they require a genuine partnership with their banks to navigate their financial journeys successfully. A mere recommendation to budget or save is insufficient. Banks must become proactive partners in value creation, offering practical, implementable support tailored to each customer’s unique needs and aspirations. Whether it is managing debt, building savings, or making informed investments, banks should stand side by side with their customers, empowering them to take meaningful strides towards financial wellbeing.

* Truly understand your customers – Personalisation is the key to value creation in banking. While it makes sense from a logistical and administrative perspective to categorise your customers into various life stages or income bands, to add real value, it’s imperative to go beyond income-band-based banking services. Irrespective of whether two people fall into the same income bracket or age group, their lives, challenges, needs and expectations will differ. It’s necessary to dig deeper into people’s lives and unlock real insights to inform the solutions and services you provide to them. Uncovering their individual needs, aspirations, and pain points allows banks to deliver solutions that genuinely resonate. By leveraging data analytics and customer insights, banks can develop personalised services that adapt to each customer’s evolving financial requirements, fostering lasting trust and loyalty and delivering value throughout their lifetimes.

* Make value the foundation for products and solutions – The traditional approach of offering standardised banking products no longer suffices. The true foundation of every product and service should be rooted in value creation. To achieve this, banks must evolve towards customised, insights-driven solutions. Tailoring offerings to address specific financial challenges enables banks to add real value to their customers’ lives, meeting their expectations and generating satisfaction. By embracing value-driven product design, banks can differentiate themselves in a competitive market and deepen their customer relationships.

* Make rewards inclusive and meaningful – Loyalty programs and customer rewards have become commonplace in the financial services industry. However, the true impact of rewards lies in their ability to add tangible value to customers’ lives. Instead of focusing solely on accumulating points, banks should create rewards that align with customers’ financial objectives and lifestyle preferences. Offering flexibility in redeeming rewards, whether for lifestyle benefits or wealth-building opportunities, empowers customers to maximise the value they derive.

Ultimately, it doesn’t matter how any given bank adds value to its customers, what matters is that it does so by placing value creation at the heart of its operations to elevate its offerings beyond basic financial transactions. Through genuine partnerships, deep customer understanding, value-centric product design, and meaningful rewards, banks can become catalysts for financial empowerment and be at the forefront of positive, value-driven change in the lives of their clients.