Nedbank’s multibillion-rand IT refresh programme has seen it gain a healthy return on investment, with the big-four bank seeing an upswing in digitally-active customers.
The bank says its ongoing digital transformation strategy, called Managed Evolution, helped to increase the number of retail clients taking to its online platforms.
The R9 billion initiative, introduced several years ago, seeks to build a modern technology platform for the bank and its clients.
This has seen its Money App garner 13% year-on-year growth in transaction volumes, with active customers hitting the three million mark.
The bank says its investment in artificial intelligence (AI)-based services, generative AI, cloud computing, open banking and chatbots led to its USSD, web and mobile apps growing steadily over the last few years.
Chipo Mushwana, executive of emerging innovation and payments at Nedbank Group, told ITWeb that thedigital payments market is a catalyst for South Africa’s economic growth, as the country rapidly moves towards a truly digital economy.
According to Mushwana, factors that contributed to the uptake in the bank’s digital channels include the increase in digitalisation of local businesses, SA’s growing e-commerce sector, the high risks associated with cash and consumers’ evolving preference for digital payments.
While there are still several barriers to consumers relying solely on digital channels for transacting, the local payments landscape is going through a period of rapid and exciting change, as more consumers recognise the value and convenience of digital channels, she points out.
“We've spent the last couple of years modernising our tech stack. This includes our services in the cloud and we've spent billions, like any other bank has. It's really paid off in terms of cost savings, cost to serve and in terms of our ability to distribute products and services.
“Our app online users are up 16% from end of July last year. We've grown our app clients from 559 000 customers who were online in 2018, to now, years later we have over three million customers using the Nedbank Money app.
“This speaks to the investment we've made in our technology and our investment in driving the right digital behaviour. On the banking app alone, we sell about 90 000 products every month, with value-added services being the fastest growing on the platform.”
Mushwana points out SA has come a long way since the era of paying with cheques, to a slew of digital payment options now driving the digital economy – including contactless payments, card-not-present transactions, crypto-currency, EFT, biometrics, PayShap and using wearables to transact.
“This digital evolution keeps getting more seamless. When you look at all the industrial revolutions and all the different industries that were disrupted by technology, financial services was one of the last to transform.
“But in that, what we are seeing is that everybody wants to participate in financial services – telecoms operators, retailers… You've got different industries that traditionally were not involved in financial services, now being involved in it, and what that does is, it just opens up the pie. I say when it comes to payments: the bigger the pie, the better for everybody else.
“Payments, effectively, are the heart and soul of how value is exchanged, not just between individuals, but also between businesses, and that is the heartbeat of every economy. They are the backbone of job creation, the backbone of goods moving, the backbone of distribution industries of supply chain, etc.”
Horizons of innovation
According to Mushwana, Nedbank's payment strategy is premised on leveraging technology to drive the business agenda and the bank’s imperatives, but most importantly, it seeks to service South African customers’ evolving needs.
“We think about innovation across three horizons – firstly, creating a micro innovation within the payment sphere selected by the consumer, and we then drive the right engagement towards digital platforms by making them aware of their convenience.
“The second horizon entails combining a bit of the old (traditional), with some of the new innovations, and we bring them together from an innovation perspective. The third horizon is focused on completely new technologies that we may not have seen, nor tried yet.
“Horizon one and two are very easy to implement because of the nature of technologies, which are easy for people to understand.”
The third horizon, she notes, ensures Nedbank’s innovation and tech teams always stay at the cusp of emerging technologies that are launching across the globe, ensuring continuous innovation and the introduction of emerging services that speak to the local context.
Nedbank's Avo app (SuperShop) has also seen ongoing growth, and now has almost three million customers, as SA’s e-commerce sector continues on an upward trajectory.
A super app, also described as a digital mall, is a mobile application that provides umbrella services – a trend that gained momentum in the past three years, accelerated by more people taking to online channels as a result of the COVID-19 pandemic.
Since its launch in 2020, the Avo app has connected South Africans to over 25 000 businesses registered on the app, with a suite of new services added to the platform monthly.
Avo Solar, launched in August 2023, has processed over 100 residential installations, of which the majority are being financed by Nedbank.
“We are enjoying north of 28% year-on-year growth in terms of revenue on the Avo app. We've increased our categories over the years; it's not called a super app for nothing. You can buy a car, solar, groceries and takeaways on the app. It's a super-giant mall for all intents and purposes,” she concludes.
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