Publications
Partners
African Bank believes it will be able to compete with the Big Five banks once its MyWORLD cheque account is launched to consumers early next year.
"[We have] never offered full retail banking services and [have] historically focused on unsecured lending. When the bank launched in April 2016*, part of the strategy was to become a successful retail bank, which offered a variety of financial products and services," says Neil Thompson, the bank’s head of customer value proposition and product design.
The assertion that it will be able to compete with South Africa’s most popular banks is in part based on African Bank’s 1.2 million loan customers, to whom it will market the MyWORLD account. It will also target customers of competitor banks.
Thompson says the design of the MyWORLD account takes into consideration how consumers use their existing accounts.
"For example, husbands and wives share accounts and have credit cards on their spouses’ accounts. We know that children use [a parent’s] card when they need to pay for something and we know that looking after extended family members is deeply entrenched in the South African culture."
MyWORLD promises to remove the risk of sharing login and card PIN details with family members.
Cash in your pocket
This is achieved using pockets. "A pocket is a separate account linked to the primary account," explains Thompson.
The main account holder would be able to designate a family or community member to a pocket, who would then get their own login and PIN. "A parent could, for instance, give their [student] child a pocket and place that child's monthly allowance into the pocket. The parent has full line of sight of the pocket and transactions that the student is paying for."
The account holder, who takes "full responsibility" for all linked pockets, would be able to add additional pockets to the main account and to control to what extent a designated family or community member can do transactions.
Thompson concedes that pockets aren’t unique to African Bank but says the application process ("the account is opened and FICA-ed under the primary account holder") and additional functionality in the pockets will distinguish the bank’s offering. "African Bank allows for the easy addition of users and members to access and use pockets across all of the digital channels."
Along with the focus on the needs of families or communities, a "seamless customer experience across all the channels" – internet banking, an app, cellphone banking and branches – will set African Bank apart, argues Thompson.
"Whether you open a MyWORLD account, an investment account or apply for a loan, you can start your application on any channel, pick up on any channel and complete on any channel."
Similar to a number of new players in the banking space, African Bank sees an opportunity in tackling high fees. "We will provide very transparent pricing, so that our customers will know exactly what value they receive for the fees they are paying. We have spoken about the product being near free, which means it will be low cost and competitive," according to Thompson.
Pricing details will be available at launch.
*African Bank was placed under curatorship in 2014 and subsequently split in two. The "good bank" became the new African Bank, which launched in 2016.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
