The end is in sight for endless banking queues, writes Charlene Smith
The bank client of the future will hardly ever go into his or her bank. Indeed, today already the way to save on frustrations and bank charges is to bank electronically.
Increasingly we are moving toward a cashless society with petrol cards, debit cards and a range of banking opportunities through retail outlets, making the need to carry money less necessary.
A frustrating “technical” glitch with this writer’s ATM card saw R1 000 deducted from my account, but not released to my pocket, until I drew this to the attention of the top people at Standard Bank, whose ATM it was, and NBS, where my account lay.
NBS still deducted bank charges when it said it would not, but managing director Bob Maxwell ensured that the telephone banking section of NBS contacted me. Within a week I had the relevant pin codes and was happily paying bills by phone, and after another week I received a neat letter detailing my payments – much better than writing out cheques and mailing them, or the frustrations of drawing cash from an ATM.
Electronic banking still accounts for only a fraction of retail banking in South Africa, but banks are pushing to increase those ratios.
Everything from insurance to car loans and mortgages can now be secured by phone, and for true efficiency it is faster to pay bills, check on the status of your account and transfer funds by telephone, Beltel or the Internet. By the year 2000 technology will be sufficiently advanced to enable us to do our banking via television sets.
Few employees nowadays receive cash or cheques for wages or salaries. Most get paid directly into bank accounts and, particularly among low-income earners, this is seeing rapid growth in ATM-related banking.
Standard Bank reveals that less than 5% of people who buy cars do so by phone. While only about 10 000 clients have so far used its new Accessline to obtain mortgages, Standard expects this figure to rise dramatically over time.
Almost all insurance policies are now contracted, and claims made, over the telephone. Call centres offering 24-hour, seven-days-a-week services, for everything from advice on buying a car to insurance claims to vehicle repairs, are becoming huge business in South Africa.
Township and mid-town banking has becoming increasingly perilous, so banks targeting township-dwelling clientele have increased ATMs in those areas and in CBDs.
Standard is rapidly working on debit cards, which it sees as being a R15-million-a-year market. Debit cards will enable consumers to key in their pin at a retail outlet and have the cost of an item automatically deducted off their account. These cards are already available for use at many petrol stations and some supermarkets.
First National Bank (FNB)seems to be ahead in debit card applications, however, with 650 000 FNB smartcards issued for use in retail purchases. FNB says it is currently the cheapest transaction vehicle on the market.
Gerald Kitchen, general manager of Nedcor’s card division, said it has two consumer- targeted debit cards, the NedCheque and a garage card. NedCheque was launched in 1989 and aimed at the top section of the market, but now the bank is investigating ways to bring it into wider use.
The card debits purchases direct from the cheque account, and enables ATM withdrawals. Because it is either Visa or MasterCard branded, it can be used at more than 12-million outlets worldwide.
The garage card, similar to other petrol cards, can be used to pay for petrol and oil, spares and car services for clients who hold cheque accounts.
Standard is aiming debit cards over the long term to its E-plan users who tend to be either low-income or first-time bank users. E-plan is one of the fastest growing areas of Standard’s retail business, as more and more people shun the risks of carrying cash.
Noel Robb of Standard’s retail division said that although many people were illiterate, rates of numeracy were higher: “If people can use a telephone, they can use an ATM. We find that after the third time of being shown how to use an ATM most people, even if illiterate, are competent users.”
Standard also has a basic life-insurance policy for all E-plan users.
Brand marketing manager of Nedcor’s People’s Bank, Jock Elliot, said the bank offers services to formally employed, regular income earners, many of whom earn less than R3 000 a month, “who have previously required but not had access to full banking services”.
They also focus on electronic banking, as well as mortgages and small loans. They not only have all the usual banking accounts, but a group savings product, which stokvels make use of and an Advantage retail shopping card, a smart-type credit card which allows for debit banking.
Standard has introduced what it calls a micro-market strategy of cluster banking. In the Johannesburg CBD, for example, it has transformed four branches: the Marshall Street and Fox Street branches have become agencies; the Library Gardens branch, close to taxi ranks and bus depots, has become a state-of-the-art electronic centre manned by a core staff component to assist novice ATM users; and the Commissioner Street branch has become a full service branch.
Standard says the new system enables the bank “to become more focused on dealing with clients while saving costs in terms of staffing”. So far Standard has 41 micro-markets in metropolitan areas.
Robb says it found there was a “huge number of customers visiting branches who did not need to, especially people with small businesses. Time spent in queues is dead time.
“Many people bank daily, not just to make withdrawals or deposits, but to check on the status of their accounts. So we now have an SMME [small and medium enterprise] voicemail product, because we found that a huge proportion conduct their business by cellphone. We also have a plastic card that allows them to withdraw and deposit at ATMs as companies.”
Standard says this reduces the need for cash and prepares customers for smart-card usage. In recent months it has developed a database to assist clients – mainly young upwardly mobile people who are computer literate – who wish to do their banking by Internet, where you can do anything from check your balance to pay your bills or apply for a mortgage.
While only about 14 000 of Standard’s 3,5-million clients use the Internet, it is a market the bank believes will grow in importance as more people have access to the Net at work.
FNB says Internet banking is a relatively small but fast-growing area of banking, and its VideoBank service through Beltel has about 20 000 clients. FNB’s Internet clients tend to be students or high-income professionals. Internet banking costs consist of a monthly rate of R10 and R2 per transaction thereafter – making it cheaper than an average of R5 for an ATM transaction.
FNB has also developed “priority suites” for high net-worth customers: “It is a step away from private banking as it is known internationally, but it ensures these clients get priority and more personalised service.”
Nedbank says its high-income clients do get personal banking, with a personal relationship manager ensuring the client never need set foot in a branch. Says Tim Fearnhead, national executive of Nedbank Private Bank : “These clients have come to expect a full range of financial services, including asset management, estate planning and tax services. We believe that in three years’ time a greater expectation will be placed by our clients on superior investment performance and product innovation.