South African banks are quickly adopting innovation to drive value and customer retention.
Historically, banks have led in implementing technology-enabled solutions, as seen with the rise in ATMs, call centres and mobile banking, but they have been slow to adopt next generation technology; this is all changing with the growth and evolution of mobile payments.
“Consumers are no longer afraid of technology and often demand it, sparking new innovations. In order to offer value to our customers, we need to change the way that we do banking by growing with technology and finding opportunities to offer intuitive products that change the way that our customers bank,” says Vuyo Mpako, Head of Innovation and Channel Design at Standard Bank.
With the changing landscape and the pressures of keeping up with technology, banks are looking to tap into capabilities and creativity outside of their own environment. This has given the rise to collaborative efforts that see institutions working together with financial technology firms (fintech) to create customer-centric, technology-enabled solutions. This new model allows institutions to provide much needed funding to start-ups in exchange for an increased customer value proposition.
“Giving our customers choice and convenience is paramount to our business strategy. There is no time to be reticent and banks need to embrace the fact that there will be a significant increase in the use of technology. One way to stay close to evolution is through partnerships and collaboration,” adds Mpako. “Standard Bank has introduced a dedicated space that will foster and create a culture of collaborative and open innovation.”
According to Mpako: “The advent of smart devices and hundreds of intuitive apps have also changed the local and global payment environment. We’re seeing an increasing shift from a reliance on hard cash and cards to proximity-based and remote payments.”
Proximity-based technology requires the user to be present for payment by using QR codes and Near Field Communication (NFC). This year saw Standard Bank launching exciting innovations that use these technologies, such as SnapScan, Tap & Go and MasterPass. SnapScan turns your smartphone into a payment device by allowing the consumer to scan a QR code. Since launch, over 12 000 merchants have signed up to have SnapScan as a payment method and over 70 000 South Africans are currently using this product.
Standard Bank’s “Tap and Go” uses Near Field Communication (NFC) that enables Standard Bank cardholders to make payments via the ‘tap and go’ method, rather than swiping or inserting cards.
Standard Bank also teamed up with MasterCard to launch MasterPass, an online payment effort that allows the user to store their card information and shipping details securely on one app. The user is then able to make secure online transactions without having to enter all their details at the online checkout stage.
Remote payments are bridging the gap between proximity-based technology and traditional payment methods. Remote payments refer to any type of banking enabler such as WAP, SMS and apps, and it plays a big role in the lives of South Africans. According to the World Wide Worx Mobility 2014 Research, there was a growth in three channels that are facilitated by the cell phone – USSD (26% in 2012, 32% in 2013), internet banking on cell phone (11% in 2012, 12% in 2013), and apps (1% in 2012, 9% in 2013). “This is still a growth area for us as it enables our customers to bank at their convenience,” says Mpako.
This year, Standard Bank rolled out their new banking app for smart devices as well as InstantMoney, which is a money transfer service that is accessible to all consumers, regardless of the bank they use as well as the unbanked market.
“We are also working on optimising our internet banking site to incorporate a Responsive Design. A part of being a truly customer-centric bank is that we strive to make banking convenient to all our customers.
“2014 has been a big year for banks in terms of innovation and offering value to their customers. To the consumer, it translated into convenience and choice. All these advances within the banking industry are slowly meeting consumer demands and perhaps moving us closer to becoming a cashless society,” Mpako says.