Competition in the banking sector is fierce. There are new players, some of which bear little resemblance to established institutions, and there’s pressure to offer user-friendly, unique services. And there are only so many customers, and banks, both neo and legacy, have to expand the breadth of their offerings and offer more value and services.
Financial institutions now need to make their presence felt on different platforms, find new ways to connect with customers, and mine customer data so they can develop personalised products. This, at least in theory, will improve customer retention.
According to McKinsey, financial institutions need to remake themselves, and those that successfully manage this transition will become more profitable and see faster growth by tapping into a value creation opportunity of up to $20 trillion.
But innovation can be hindered by legacy technologies. Older banks may have on-prem, complex and interdependent systems, while newer ones will start using the cloud from the beginning.
Jolandé Duvenage is the “chief imagineer”, or CEO, of FNB nav», a collection of tools to help customers make financial decisions. She says bright ideas will be of little use if there’s no execution. “Today, you will only win people’s hearts and convince them to give their time, resources or data to you if you deliver real innovation.”
Big brother or big mother?
“When you have access to somebody’s data, you need to pick your role: do you want to be big brother or big mother?” Duvenage asked in an interview with Stuff magazine in 2024. Available on the FNB app, the platform was described as a “financial GPS” in the early days because it was intended to help customers make the most of their money, but has now expanded to include Home, Car, Wellness, Care, Energy, Marketplace, Earth and its newest addition, Graduate.
Nedbank, meanwhile, has its Avo superapp where users can shop, pay for goods and services and access financial products in one place.
“Nobody comes into the bank and says, with a big smile on their face, that they need a home loan,” says Duvenage. The process of securing a home loan – and everything else that goes into finding and buying a house and making the big move – often causes a considerable amount of angst. With nav», FNB is trying to simplify the process by offering advice and support.
Today, yo u will only win people’s hearts and convince them to give their time, resources or data to you if you deliver real innovation.
Jolandé Duvenage, FNB
While a home loan is a core service at the bank, it’s trying to solve problems in the ecosystem around the process of buying a new house, she says.
Spoilt for choice
Nicol Russel, one of the co-founders of FinWise, a personal finance management platform, says customers are spoilt for choice because it’s now so simple for them to open and close accounts and compare offerings. She says banks are having to work much harder to earn their customers’ loyalty.
Where fees and pricing used to be the primary consideration, now customers are thinking about user experience, and are moving their accounts to institutions where they can get the most value. This is driving banks to partner with fintechs. “If a bank is going to take a year or two to develop a new feature or offering, but there’s already a startup that exists that provides this service, it makes sense for them to team up and tap into the leaner structure and faster innovation cycles that are synonymous with startups,” she says.
Duvenage says corporates are “now realising they can’t be islands in the ocean. There is incredible power in partnerships.” She adds that nav» Money is the core of the platform and grew its user base by 22% during the 2024 calendar year. “If we can take a customer’s transactional data and play it back to them, offering insights around where they spent the most money, we are empowering them to manage their money differently and make changes to improve their financial future,” she says. “And if they don’t have the discipline to put back that product they can’t afford, they can set up alerts or triggers using nav» to make sure they don’t blow their budget.”
Duvenage believes if someone grew up in a family that wasn’t having money conversations around the dinner table, they might not know what to think about when buying or selling a vehicle, or that there are hidden costs when buying a new home. The platform has a coaching section, which breaks financial advice into bite-sized chunks; it also has mini quizzes after each section.
Design thinking in action
FNB uses design thinking to solve problems and conducts customer and market research to understand their needs, behaviours, and pain points. Duvenage says the process is broken down into five steps: empathise, define, ideate, prototype and test. Once it has the ideas, staff build wireframe diagrams to demonstrate the proposed solution so that it can test this with customers and refine the offering. This allows it to see the customer in context, and try to solve the types of problems they’re having, she says.
If a bank is going to take a year or two to develop a new feature or offering, but there’s already a startup that exists that provides this service, it makes sense for them to team up and tap into the leaner structure and faster innovation cycles that are synonymous with startups.
Nicol Russel, FinWise
It’s not enough to know that your customer wants to save money, you also need to know what they want to save for. If you’re dealing with a single mom who wants to put money away for her child’s education, the bank can develop solutions that are better suited to this specific need. In this example, the bank could match appropriate savings products and services to this goal by making sure she can access extra funds in January when new stationery and school fees can put strain on her budget.
Most brands will tell you that they are customer-centric, but few actually are, says Duvenage. “Unfortunately, when everyone is claiming to be customer-centric and most aren’t, the true meaning of customer centricity fizzles out. I believe that organisations will have to become customer obsessed in the future, leveraging data and becoming more scientific around how they build and deliver the experiences their customers really want.”
* Article first published on brainstorm.itweb.co.za
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