Get more Mail & Guardian
Subscribe or Login

Covid-19 accelerates Capitec’s move to digital banking

The Covid-19 pandemic has speeded up digitalisation in the banking sector faster than might have otherwise happened. 

Capitec Bank, which posted its earnings on Thursday, reported that the number of clients using digital channels had increased by 22% to 8.9 million over six months to end August 2021. 

In an interview with the Mail & Guardian, Capitec chief executive Gerrie Fourie said there had been a material move to digital from May 2020 as the bank grappled with strict  lockdown regulations in response to the pandemic, but a move from cash to card transactions had already started in 2016-17.

“It has been an uphill battle. We have really started moving people from cash to card and from branch to digital. I think we have been very successful in it and I think Covid-19 has helped,” Fourie said.

“What is interesting is every time we have taken people to the app it just gives us more time in the branches to sell better and spend quality time with our clients. We see branches as a critical part of our business.”

The Financial Times recently reported that Virgin Money in the United Kingdom is to close almost a fifth of its 162 branches and thousands of bank branches have closed as Covid-19 accelerates the shift to digital banking.

Fourie said Capitec did not have similar plans for such a large move from physical branches. 

“In the last three years we’ve closed about 10 branches and it was more of a retail move. When we’re closing branches it is not about digital, it is about whether it is [the branch] making sense,” he said.

A number of South African banks have closed branches since the onset of the pandemic, including Absa, which has shut 13 branches or kiosks, Nedbank (48), and TymeBank (28), according to technology publication Mybroadband

In its results, Capitec reported a 15% increase to 16.8-million in the number of its active clients in the six months ended August. Fourie said the challenge now was “how do we optimise that client [base] so that their salary comes in with us”.

“Currently we have six million people with salaries paid into our bank account. Those are the people that really make a difference,” he said. 

A recent banks analysis report by audit firm PwC said South Africa’s Big Four banks — Absa, FirstRand, Nedbank and Standard Bank — were counting on digital innovations to keep them relevant to customers in the face of rising competition from new entrants in the financial sector, as well as mobile phone network operators and retailers.

For example, TymeBank, which does not have physical branches, has partnered with grocery retailer Pick n Pay to host  a national network of self-service kiosks in its outlets.

Asked if Capitec had similar plans, Fourie said: “For me, it’s about who understands their clients the best and who will deliver on their client needs. Tyme has partnered with Pick n Pay but it’s only because their kiosk is there and they do the SmartShopper [loyalty programme] through them.”

He said Capitec preferred an organic type of growth. “We don’t have an acquisition team that goes out there trying to acquire companies. The focus is growing organically and if there is opportunity then we will evaluate it. If it makes sense to us.”

Former African Bank boss Basani Maluleke has recently moved to Capitec. 

“I think she’s an excellent individual with very strong skills. South Africa’s got a skills shortage so we see it as an opportunity to bring her skills into the Capitec organisation and the move will form part of succession planning,” Fourie said.

“If we see somebody smart out in the market and we believe there is an opportunity we appoint those people, because we’re still growing. We’re looking to appoint 300 people in the next couple of months. It’s just part of the whole process.” 

Anathi Madubela is an Adamela Trust business reporter at the Mail & Guardian.

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Anathi Madubela
Anathi Madubela is a business journalist with a keen interest in the retail sector.

Related stories


If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here


Subscribers only

Fears of violence persist a year after the murder of...

The court battle to stop coal mining in rural KwaZulu-Natal has heightened the sense of danger among environmental activists

Data shows EFF has lower negative sentiment online among voters...

The EFF has a stronger online presence than the ANC and Democratic Alliance

More top stories

Phoenix activist takes on Durban’s politically connected in November polls

Independent candidates look set to play a greater role in the metro municipality after 1 November

Libyan town clings to memory of Gaddafi, 10 years on

Rebels killed Muammar Gaddafi in his hometown of Sirte on 20 October 2011, months into the Nato-backed rebellion that ended his four-decade rule

Fishing subsidies in the W. Cape: ‘Illegal fishing is our...

Fishers claim they are forced into illegal trawling because subsidies only benefit big vessels

press releases

Loading latest Press Releases…