Financial services group Sasfin has deployed millions of rands in capital to drive its new digital banking services targeted at SMEs.
In 2020, the group, which says it offers “beyond banking” services, announced a R750 million war chest from FMO, the Dutch Development Bank, to take its digital banking business to the next level and grow its SME lending offerings for underserved businesses.
Sasfin is a bank-controlling company that provides a range of financial products and services for business and ‘wealth’ clients. Its financial products and services focus on the needs of entrepreneurs, corporates, institutions and high net-worth individuals.
In an e-mail interview with ITWeb, Sandile Shabalala, Sasfin chief executive of business and commercial banking, said while the growth of SA’s SME sector has often been cited as a potential panacea to the country’s economic woes, these small businesses typically struggle to access a full suite of user-friendly business banking products.
As an answer to this challenge, the financial institution has introduced the Beyond Banking Digital Platform and is developing a digital foreign exchange platform.
“These platforms complement the relationship banking model which is targeting the SME segment.The Beyond Banking Digital Platform offers convenience through online/mobile general banking services and other value-added services, such as Accounting Lite, Xero and payroll services.”
The digital foreign exchange platform will offer online/mobile general forex banking services, including trading, he notes.
“We are looking to deploy more investment and resources in the further development and enhancement of our digital platforms, as we expand our customer acquisition strategies with additional focus on primary banking and acquiring businesses with more complex digital banking requirements,” explains Shabalala.
The company adds that its significant investment in digital capabilities has enabled it to transform the way it works, resulting in its business segment growing to a total of 2 471 clients and a 75% year-on-year growth.
In its December 2021 interim results, Sasfin reported 100% profit growth, addsShabalala.
Speeding up loan processes
In 2020, Sasfin also obtained a R390 million funding line, as well as a $35 million (circa R600 million) loan guarantee facility (Nasira) from the FMO to provide loans to women, youth, migrant and COVID-19-impacted businesses.
This has helped it continue to develop its lending capabilities in Asset Finance and Sasfin Capital, which together with Nasira, ensure the financial services group is well-placed to fund businesses that are critical to the growth of SA’s economy.
According to Shabalala, the key challenges facing financial institutions in today’s digital economy include meeting and exceeding customer expectations, competing with non-banks and fintech firms, leveraging big data and data security, and sluggish lending processes for SMEs.
Shabalala, who was launch CEO of digital-only bank TymeBank, is resolute in his drive to change this status quo, noting he has already identified ways and means for Sasfin to expand its business banking offerings for this underserved but vitally important segment of the economy.
Sasfin is creating more capabilities within the frontline businesses to leverage data more deeply to improve its revenue opportunities, while becoming more proactive in understanding and meeting customer requirements, it says.
“SMEs need solutions that create value via streamlined customer service interfaces, and with a single point of contact. Having access to this level of understanding, banks will take a weight off an entrepreneur’s mind, while giving them access to a range of financial products and services that will help them sustain and grow their operations.
“When it comes to accessing funding, SMEs need relevant products with simple processes that are completed with as few touchpoints as possible, so that they can get quick decisions that empower them to make the best choices for their business,” he points out.
McKinsey research found that slow bank lending processes, such as an insistence on hard-copy documentation and branch visits, was behind SMEs’ slow uptake of the COVID-19 loan guarantee scheme.
These slow processes, Shabalala comments, are typical of many applications and transactions in South African banking, leading to a significant barrier to accessing much-needed finance.
“These factors are at play in SMEs’ everyday operations, and not just in the context of the COVID-19 loan guarantee scheme. When your working day is consumed with keeping your business alive, you don’t have time to fill in forms, get documents certified, or stand in long queues during banks’ limited operating hours.”
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