Buoyed by the ever-increasing number of digitally-active customers, big-four bank First National Bank (FNB) is looking to tap into the opportunities presented by emerging technologies such as the metaverse and blockchain.
So said Jacques Celliers, CEO of FNB, yesterday in a video call with ITWeb after the bank posted a strong set of financial results for the financial year ended 30 June.
According to FNB, during the period, digitally-active customers increased from 6.09 million to 6.48 million, while digital logins totalled 1.6 billion.
With the number of tech-savvy customers on the rise, Celliers said the big-four bank is making its application programming interface (API) ready for technologies like the metaverse, with the hope of introducing them in the near future.
Dubbed the next evolution of social connection, a “metaverse” is a virtual reality space where users in different parts of the globe can interact with each other and with virtual beings in a computer-generated environment.
According to a paper by ResearchGate, the metaverse issue, which is expected to create a global market of $8 trillion in the next decade, is a particular market for the banking sector to watch closely.
Thrilling innovations
With the metaverse growing by the day, Celliers noted FNB is paying particular attention to the “exciting” technology.
“It’s an interesting space; digital interactions are going to require us to participate in the new emerging technologies,” he said.
Globally, banks such as JPMorgan, HSBC, Standard Chartered and Caixa have started dabbling in the metaverse.
For example, HSBC has since March had a plot of land on The Sandbox. JP Morgan has also acquired a commercial space in the virtual mall Metajuku on Decentraland.
“With the metaverse, our expectation is that we will be in there to facilitate transactions on one end, and also to finance transactions on the other end. So we are excited about what that means,” Celliers said.
“At the moment, we are obviously hard at work to double-check if we have the right API layers and architecture for us to be able to participate in the metaverse if that opportunity arises. When the opportunity arises, most financial institutions will be challenged to respond appropriately.”
Blockchain is another emerging technology which FNB is looking to exploit if the number of use cases becomes attractive, Celliers added.
“Blockchain is not a new concept; as you know, most innovative-driven businesses around the world have fiddled with blockchain and we have a good team on it, who knows what it is about,” he said.
“We are excited about its potential but the use case leverage of it is still in its infancy. For example, we are working on a number of innovations – whether it’s in the trade world or title deeds for properties.
“But it’s still early days for us to execute blockchain technology at scale. We also participate in the reserve bank activities on blockchain, digital coins and so forth. So we are alive to the opportunities, but we just don’t yet have anything that is activated at scale.”
According to Celliers, the bank is still taking a cautious approach to crypto-currencies.
This, as the South African Reserve Bank’s Prudential Authority in August issued a guidance notice to the big banks to start working with crypto players.
The guidance notice followed some local big banks, including FNB, shutting down the accounts of crypto-currency exchanges, largely fearful of the potential risks they present.
In November 2019, FNB announced it was closing down crypto-related bank accounts, much to the anger of local digital currency players.
The bank notified the crypto-currency exchanges that it will close their accounts in 2020, citing the risks the digital currencies present.
“Our customers are involved in the world of crypto-currency. It’s not a topic that our customers are not engaged with,” Celliers said.
“We are still going through a review of what the regulator’s notice was in terms of all our obligations and their obligations. So it’s still early days for us; and we haven’t changed any of our views just yet; but it’s pleasing to know that from a regulatory perspective, they are starting to create space for innovation. Like all innovations, when they are new, there will an uncertainty.
“From a crypto asset perspective or an investment point of view, we don’t have it [crypto-currency] yet as a formal asset class that we can advise our customers on. We have to make sure that whatever we take to our customers suits our risk appetite; so there is still a journey for us to travel.”
Steady does it
In its results, FNB says it remains committed to investing in the digital platform to facilitate customers’ migration to safer and more efficient channels.
According to the bank, the platform evolution and strategy to increase customer adoption of digital interfaces is yielding results as it continues to experience significant volume and activity growth.
“Our efforts to protect our customers from fraud continue to be an integral part of our platform innovations, and we are pleased to report positive outcomes in this regard. Our scalable platform offers customers the opportunity to manage their financial needs, securely, 24/7 and ensures customers can engage with us on their preferred device interface, either unassisted on their own devices or assisted by us in our branches, call centres, service suites or secure chat.
“Our retail segment made significant progress in its strategy to offer inclusive and personalised financial services to customers and their families. Our efforts are supported by unassisted money management tools like nav» Money on the FNB App, which is now used by over 2.9 million customers.”
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