SA’s newest digital bank, Bank Zero, has confirmed it will officially launch to the public before the end of this year, with backing from seven investors, who are also co-founders.
In an e-mail interview with ITWeb, CEO Yatin Narsai said the branchless bank was initially aiming to launch earlier this year, but due to the upheaval caused by the COVID-19 crisis, the launch was postponed to take place before the year winds up.
The bank, which is entirely app-driven, started its closed beta testing phase late last year, when it introduced its card go-live and rigorous health-checks, such as simulated card attacks, card fraud detection and retailer readiness among a small group of citizens.
After recently rolling out end-to-end live beta testing, the bank says it is on course to join fellow competitors TymeBank and Discovery Bank, which have both ignited a financial revolution in SA, triggering a price war among financial institutions.
“Bank Zero’s general public operations are on track and will happen before the end of 2020,” says Narsai.
“Notwithstanding the severe conditions brought by COVID-19, we managed to retain our full value proposition. Our integrated core banking platform operating across six payment rails provides an end-to-end view of money and other powerful innovations. It also caters for Bank Zero’s unique card patent which has been live for some time now.”
The local retail banking industry is set for more shake-up as SA sees the rise of digital banks.
TymeBank, which bills itself as SA's first digital-only bank, controlled by billionaire Patrice Motsepe's African Rainbow Capital, launched to the South African public in 2018. During the same time, insurer Discovery unveiled what it describes as the “world's first behavioural bank”, starting its operations from March.
This week, fintech player Bettr announced it will officially launch its digital-only banking service in 2021, after undergoing a few years of testing.
Bank Zero, which received its licence one year after the first two entrants, is co-founded by its seven investors, including former First National Bank CEO Michael Jordaan, who is chairman, and banking innovator, Narsai.
The five other, unnamed investors are actively involved in daily operational management of the bank, without earning salaries, notes Narsai.
“The Bank Zero team believes its investors must have skin in the game and the bank is over 45% black-owned and 20% female-owned.”
Segment-agnostic approach
Described as “a unique and fresh approach to banking”, Bank Zero promises added security and transparency, as well as a fresh take on banking.
The bank says it does not have entry-level accounts, but offers a "segment-agnostic" approach, which provides customers with access to all features, such as low banking fees, free rogue debit order protection and seamless integration with Xero accounting software for business clients.
Its patented card technology ensures the 16-digit card number no longer needs to change each time a card is replaced, meaning card details for digital services (such as Netflix or Uber) don't have to be reset.
“Our capital and cost-efficiencies remain core strengths. Customers will benefit significantly by way of much-needed features and pay lower fees. This is urgently needed with households and businesses facing financial stress – savings from exorbitant bank fees will bring huge relief,” continues Narsai.
Discovery Bank, which had reached over 200 000 clients by July, capitalises on the insurer’s already existing client base, while TymeBank, which is two million customers strong, has premised its growth strategy on its partnership with over 800 Pick n Pay and Boxer stores nation-wide.
Bank Zero has drawn much public attention by offering its customers an opportunity to become shareholders of the bank, through holding specific cash investment products.
Commenting on the intensifying competition in SA’s digital banking space in an earlier interview with ITWeb, Arthur Goldstuck, head of World Wide Worx and chairman of Sasfin Bank’s Digital Advisory Council, said the increasing competition is healthy for the financial services sector and is also good for local consumers.
“Bank Zero clearly wants to get the platform working smoothly before it goes live. It has the greatest potential for total digital banking, as it is built on the principle of removing all manual intervention.
“In any market, at any time, there is room for new competition. If one ever said there was no room for more competition, regardless of the product or sector, it would be like calling a halt to all innovation and entrepreneurship,” noted Goldstuck.
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