Capitec funnelled part of its earmarked R1.4 billion investment in strategic projects into bolstering its digital services, as the bank eyes moving its clients to cashless transactions.
This emerged yesterday when the bank announced its financial results, reporting 15% growth despite the tough economic climate.
During the 2023 financial year, Capitec’s headline earnings grew by 15% to R9.7 billion, with the retail bank and insurance business’s profit increasing by 12% to R9.3 billion. Although from a smaller base, the business bank’s profits surged by 124% to R389 million, it says.
The bank invested approximately R1.4 billion in strategic projects during the 2023 financial year. This included building and launching Capitec Business, the formation of an insurance business after being granted a long-term insurance licence, the launch of mobile virtual network operator Capitec Connect, expansion of value-added services, and the continuous improvement of its data and technology infrastructure and cloud services.
According to the bank, of the total investment, approximately 70% was accounted for as operating expenses.
During the year, it launched integrations with several digital payment solutions, such as Apple Pay, Samsung Pay and Google Pay, with zero transaction fees for local card purchases.
Capitec adds it introduced its own secure online payment solution tool, Capitec Pay, which protects users from screen scraping.
It says client adoption of these digital solutions has exceeded expectations.
“Our long-term strategy is to move clients away from cash transacting. The Live Better programme rewards clients for using our products and for paying with their debit and credit cards instead of cash,” says Gerrie Fourie, CEO of Capitec.
“This motivates positive banking behaviour and provides rich data, based on which we can offer our clients better solutions and more value. We also bring clients value-added services and world-class digital payment solutions.
“Capitec Connect is growing well, with over 500 000 active SIM cards, and is disrupting the prepaid market with low-cost data that never expires. We’ve also introduced conversational banking on WhatsApp and Facebook Messenger.”
The bank says its strong performance in the 2023 financial year is a testament to its resilience, agility and commitment to clients.
Capitec says it made substantial investments in technology and views it as integral to its objective of providing clients with an ecosystem of products and services that address their financial needs.
The bank is migrating to Amazon Web Services and building its ability to engage clients across multiple channels “in a seamless way with the services offered by global leaders like Salesforce or LivePerson”.
By focusing on a culture of innovation, the right data strategy and cloud technology, and client insights, the bank is well-positioned to continue its upward trajectory in the years to come, it notes.
Fourie concludes: “We are determined to be at the forefront of South Africa's growth story, leveraging our expertise and resources to build a stronger, more prosperous future for our company and the communities we serve.
“We have evolved over the past 22 years from a lender, to a bank, to a financial services company, and with advanced data and technology, we believe we are well-positioned to leverage our client base and make the most of our opportunities for clients and all stakeholders.”
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