Bank branches off from the poor

(John McCann/M&G)

(John McCann/M&G)

COMMENT

Customers stand outside the locked doors of the Standard Bank branch in Brixton, Johannesburg. Inside, bank officials and a trusted security guard, familiar to those who have needed help at the ATMs, pack files into a trolley. The guard crosses his arms to signal “closed for good”.

Outside, a man in overalls raises his hands in frustration.
This has been the branch for older people from Coronationville, Newclare, Wynberg, even Newlands, he says. “I don’t know what we’ll do.” Others walk away, shaking their heads.

Standard Bank’s media relations representative Ross Linstrom said its branch closure poster could not be displayed because of “unresolved landlord concerns”. Instead, it displayed a poster of a young man in an agricultural setting casting a satisfied look at his mobile phone, and stating that “This branches ATM’s has been decommissioned” (sic). The poster refers customers to “alternative ATMs” at the bank’s Fordsburg and Dragon City branches.

The poster nudges Brixton customers: “You have the courage to bank differently, it’s at your fingertips. Download the Standard Bank App now!” And then it apologises for “any inconvenience caused”.

The Standard Bank ATMs closest to Brixton are on the University of Johannesburg’s Kingsway campus and in the Campus Square mall in the Mellville/Auckland Park area.

Standard Bank’s Linstrom said there was no deliberate intention to deflect Brixton’s working-class customers from the slightly more upmarket and student-oriented Campus Square. He also said the bank sent SMSes to “relationship and non-relationship customers” warning them of the pending closure of branches.

Standard Bank is proud of its branch in the Chinese wholesale mall Dragon City, the bank’s first Mandarin-speaking facility. Reference to it on the poster suggests the bank is aware its Brixton customers include small and informal traders — Brixton retailers display a fair share of Chinese merchandise.

After I searched Standard Bank’s website in vain for a list of planned branch closures, the bank e-mailed me the list for Gauteng. Of the 91 branches shutting down countrywide, 49 are in Gauteng.

The list provides a mixed picture. Most closures are in upmarket areas. For Johannesburg they include Hyde Park, Dainfern, Parkview, Norwood and Melrose Arch. Not all customers of these branches are middle class. But the majority may, when in need of cash, absorb the surcharge for using the ATMs of other banks, or they may drive to the nearest Standard Bank ATM.

One branch that closed near a deprived area was in Cosmo Mall on Malibongwe Drive. The list refers to Cresta, Nicolway and Sandton as the closest alternatives. Closures on the East Rand include centres in Daveyton and KwaThema.

Standard Bank, as Linstrom explained, based its decision to close branches on “changing needs” and the “rapid adoption of digital banking options” by its customers. “One-time customer visits to the bank’s branches declined on average by 20% and multiple customer visits [are] down by about 25%.” The bank deems its new digital “banking delivery model” more affordable and accessible.

But in its decisions on which services to close, could Standard Bank not analyse a finer grain of individual branch and ATM use? On any day, the Brixton branch in the Protea Centre was busy, with queues made up of all age groups, families, and workers in overalls. Many customers entered from High Street where the centre is flanked by small and informal businesses.

Protea Centre plays an important role in the lives of people who live in Brixton, Mayfair West, Jan Hofmeyer and Fietas. In mall management terms, with the presence of several banks, this is a “community centre”, though with a relatively low life standard measure.

The centre has managed a delicate balance. It is that rare kind of mall that is frequented by a mixture of classes and provides a certain dignity to low-income people. Here customers, rather than brands, set the scene. Protea Centre survived the launch of Campus Square, which saw several anchor tenants relocate there almost two decades ago.

In socioeconomic and demographic terms, Brixton is a microcosm of Johannesburg. In the 2011 census, 42% of households in the suburb earned less than R4 000 a month. If anything, this trend has intensified as landlords build rooms in their yards, often renting these out to entire families.

Though exploited in the rental market, these households have the advantage of a relatively good location. Braamfontein and Johannesburg’s central business district can be reached by foot if need be. But, even if such households own a smartphone, the cost of data is often out of reach.

Standard Bank’s spatial decisions on which branches to close contrasts with those of the Post Office. In 2015, the post office in Campus Square was closed, but the one in Protea Centre, where shops are smaller and rents lower, remained open.

Many of the Protea Centre customers use the post office to collect their social grants, renew their car licences and bank. A parking garage provides convenience for post office customers from Auckland Park and beyond.

What then is Standard Bank’s vision for low-income households, small and informal businesses and the cash economy?

For those needing to deposit irregular wages or income from informal trade, the taxi fare to Fordsburg or Campus Square is felt.

Some of these customers will inevitably switch to FNB, Capitec, the post office or to Pick n Pay’s Go Banking service, or to storing banknotes under their mattresses.

In the past five years, Standard Bank expanded its Protea Centre branch. It incorporated adjacent shop space for an entirely new layout with a triple inquiry desk, more tellers and additional ATMs.

According to a Moneyweb article on March 8 this year, “The branch is dead — long live the branch”, Standard Bank was reducing the floor space of its branches and gradually closing them in the period in which the Protea Centre branch expansion took place.

The Brixton branch upgrade seemed to signal a responsiveness to local realities, and to the opportunity to recruit more customers from lower-income brackets. This aligned with requirements to improve poorer people’s access to banks and to comply with the overall transformative obligations in our Constitution. Does Standard Bank’s current digital banking drive not turn much of this on its head?

In its March 2019 announcement of the country-wide branch closures, Standard Bank mentioned that 1 200 employees would lose their jobs, indicating there would be attempts to reskill or reabsorb some of them. But the bank seemed silent on the implications of closures for its downward reach to poorer people. With branch closures in places such as Brixton, Standard Bank will probably be ridding itself not only of employees but, unwittingly perhaps, of those small customers from whom it has never made much money.

For the person in the street — and assuming they have access to the internet — Standard Bank’s website provides a letter from its chief executive, Sim Tshabalala. This assures the public of Standard Bank’s careful and reflective approach, its mindfulness of how it treats is customers and of the direct and indirect effects of “every decision”, not just for the Standard Bank group, “but for the communities in which we operate”.

Standard Bank’s Linstrom reminds me that Tshabalala is also on record stating that “for Standard Bank, transformation is a legal and moral duty, and a business imperative. We are committed to transformation by the aspirations and values expressed in our Constitution; by the legal force of its equality clause; and in terms of precisely detailed legislation including the Broad-based Black Economic Empowerment Act, the Employment Equity Act and the Labour Relations Act.

“Transformation is also in our commercial interest. Extreme inequality creates risks to the quality of our politics, to the strength of our institutions and to the stability of our society. These risks worsen the business environment and our country risk ratings which, in turn, damage our prospects for faster and more inclusive growth in South Africa and throughout the continent. Our interest in the profitability of our group and in the well-being of our fellow South Africans compels us to transform.”

In navigating constitutional and business imperatives in a context of inequality and, therefore, uneven digitalisation, and in a drive towards inclusive growth, Standard Bank would do well to monitor the effect of its branch closures more closely. It will also do well to reach out to its inconvenienced customers, especially those who will continue, by choice or need, to transact in the cash economy.

Marie Huchzermeyer teaches in the School of Architecture and Planning at the University of the Witwatersrand. These are her own views

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