![[Botswana] FNB reaps benefits of digital transition](FNB Botswana.jpg)
[Botswana] FNB reaps benefits of digital transition
In a bid to improve convenience and expedite service delivery to its customers, First National Bank in Botswana has invested heavily in technology in its latest strategy to drive users to digital channels including online banking and the lender’s smartphone app.
Although many people still regard physical branch infrastructure as a way into “financial inclusion”, it’s not a “point of dependency” but rather a place of first contact, FNB Business chief information officer Peter Alkema. “We quickly move them onto our digital platforms after becoming customers.”He said FNB has seen a “dramatic” increase in the use of its app and its mobile banking services in the past year.
Total internet, mobile and app transaction volumes have risen by 15percent over 2015. The number of customers using the FNB banking app rose by 85percent in the same period. The bank’s eWallet is also proving popular..
Alkema said fewer customers are using branches to deposit cash, with four times as much cash being deposited at automated terminals than in branches. However, despite the growing move to digital channels and payment methods, the use of cash in South Africa continues to increase at a rate of about 10percent /year.
Meanwhile, Alkema has warned that telecommunications operators, which are keen to expand into financial services, may be underestimating what is required of them to build a serious retail presence.MTN Group, in particular, has aggressively hired new top executives with extensive experience in the financial services sector.
They include incoming CEO Rob Shuter, ex-Nedbank, incoming chief financial officer Ralph Mupita from Old Mutual and vice-president of strategy and mergers & acquisitions Stephen van Coller from Absa, signaling that financial services is a key future focus area for the company. “Those companies must go the Discovery route of putting down big money and building a big team to build a retail bank,” said Alkema. “It’s not an overnight thing. [Discovery CEO] Adrian Gore understands this. When you see the telcos putting serious cash reserves aside, then [we’ll know they’re serious].”
Still, the telcos are well positioned to enter financial services, Alkema said. “Airtime has become a geographically independent store of value. In Africa, people buy airtime for people in other countries — it’s become a cross-border remittance. So, telcos already have a pseudo digital currency.
They are already sitting on a digital store of value, which is that data and voice capability. When they can figure out new and innovative business models around that, it will be hugely interesting. “Alkema said telecoms operators need to find innovative business models that are not simply an add-on to their telco capabilities but a full banking offering.
“They need to get out there and say there are building a retail bank, exactly like Discovery has done. “The problem is the market is already competitive, in an economy that is depressed, making it difficult for new players to break in.“The only market share available is the market share you can take away from existing banks,” said Alkema. And that will be a tall order given that local banks have a “strong foothold” and are “innovative”. Also, the regulatory environment is “tough”, making it difficult for new players to enter the market successfully.
