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There will always be competitors in the banking sector, but challenges can also be opportunities, says Capitec's CEO Gerrie Fourie.
Fourie was speaking shortly after the release of Capitec's results for the year ended February. Both headline earnings per share and total dividend per share were up by 19% respectively at R45.77 per share and R17.50 per share. Headline earnings were up by 19% to R5.3bn.
Fourie said he is often asked for reaction to the new "disruptor" entrants to SA's banking sector, like Discovery Bank, Bank Zero and TymeBank.
Fourie believes Capitec's ability to remain agile and adapt to new clients, new markets and new technology, will ensure its competitive advantage going forward.
He pointed out that the new entrants focus on smart phone banking, yet only 55% of the SA market uses the type of phone that can download an app.
At the same time, he hinted that Capitec plans to launch some new benefits in the digital space as well as in their branches soon.
According to Fourie, going forward, Capitec will continue to focus on the four fundamentals on which it has built the bank over the past 19 years, namely affordability, accessibility, simplicity and service.
"Accessibility has changed from when we started the bank. Then there was nothing like an app or smart phones. It was more about keeping branches open for longer. Now it is more about convenience and self-help," he said.
According to Capitec, this was driven by strong client growth, a move to digital banking and solid credit performance. Capitec has in fact won the annual Consulta SA Customer Satisfaction Index (SA-csi) for banking.
Its active client base grew by 15% to 11.4 million clients during the financial year.
About 5.2 million of Capitec's about 11.4 million clients use the bank's app and digital offerings. Of these, about 3 million indicated that they also visit branches.
The rest - about 6.6 million – only visits branches. To Fourie this indicates that clients still want the personal interaction of visiting a branch.
Capitec signs up on average 14 000 new credit card clients every month. Fourie said this product was launched about 18 months ago. Due to the risk profile requirements to qualify, only about 10% of applications are approved. The majority of Capitec clients still only use debit cards.
Asked about Capitec's funeral plan, Fourie said the bank saw an opportunity in the market.
At financial year end more than 360 000 of these policies were active.
"It is a very competitive market, but people are not getting the best prices and best benefits, in our view. In line with clients' needs we allow them to name up to 21 beneficiaries, for instance. There is also not a waiting period when they transfer from another insurer," he explained.
He said only about 20% of the funeral policies are issued online, which was an indication that customers still preferred visiting a branch to sign up and wanted personal interaction in terms of understanding what they were signing up for.
This is further evidence for Fourie of how important Capitec's branch network remains to best serve clients.
