For the third time in the past three years of its existence, South African online bank 20twenty is set to get a new owner. Standard Chartered announced in an e-mail to its clients on Tuesday that it plans to sell the online banking business.
Dale Williams, the head of consumer banking at Standard Chartered, said in the e-mail that “we have had to make some tough decisions to achieve our growth strategy in South Africa. As a consequence we are considering the future of our 4-in-One account (20one account), Juice card and online banking facilities.”
In 2003, after 20twenty was placed in curatorship with previous owner Saambou, it was bought by Standard Chartered, which relaunched the online bank in 2004 and integrated it into its consumer banking operations earlier this year.
Standard Chartered is one of the United Kingdom’s leading banks in the developing world and has operations in more than 50 markets worldwide.
An angry Deon Wiggett, who has been a customer with 20twenty for four-and-a-half years, told the Mail & Guardian Online that this latest news is “very unsettling”.
“In the beginning, it sounded so good, their 21st-century take on banking. But, more importantly, in January this year they said they are still completely committed to their ideals of offering a whole different way of banking. I don’t believe that any more.
“I gave them the benefit of the doubt with the whole Saambou situation, but now it just looks as if they [Standard Chartered] don’t care any more because this was their way of getting into banking in South Africa.”
In the e-mail, Williams said: “Our preferred option would be to transfer it to a like-minded financial-services provider. We understand that this may cause uncertainty, but we’re committed to minimising any possible inconvenience.
“Our personal loan customers are unaffected by this change and we will continue to offer our services as normal. Our home-loans customers, apart from those who use online banking, will remain unaffected.”
Chris Low, CEO of Standard Chartered South Africa, told the M&G Online on Wednesday that “after a lengthy review of our consumer banking business, we have concluded that we need to play to our strengths by focusing on those products in which we can leverage our international expertise, such as mortgages.
“We are the number-one foreign lender of mortgages in Asia (excluding Japan), and we aim to position mortgages as our flagship product underpinning our strategic growth strategy in South Africa.
“We are pleased with the momentum of the product thus far (SmartMove) having doubled the book in the last three months. Some tough decisions have had to be made to achieve these ambitions, which include the decision to no longer offer online banking services.
“Our customers and staff remain our priority. For this reason we are committed to minimising disruption to customers by providing an online banking alternative with a reputable financial institution. Our customers will be the first to be informed of the details around the alternatives available to them — in the meantime, their accounts will remain unchanged, transactional facilities unaffected and our contact centre is still available 24 hours per day, seven days a week.”
Low said Standard Chartered is committed to assisting its customers throughout the process.
“Regrettably, staff will be impacted by these changes,” he said, “and in this respect we will be following a fair and transparent process. Staff will be offered a severance package which well exceeds statutory minimums with the inclusion of a performance bonus.
“In order to further minimise the impact on our staff, we will endeavour to redeploy skills to other core areas of the local business, as well as internationally, where we have a presence in over 50 countries worldwide.”