The number of customers using the First National Bank (FNB) app has increased almost 29% over the past year, growing from 1.4 million in June last year, to just over 1.8 million in June 2017.
This is according to the bank's parent company FirstRand's financial results for the year ended 30 June 2017.
Meanwhile, the volume of financial transactions on the app has significantly increased, growing by 68% from 59 million in June last year, to just under 100 million in June this year.
"All of our digital channels are pumping and essentially the growth in digital platforms is unbelievably exciting," FNB CEO Jacques Celliers told ITWeb in an interview.
"FNB over the years has been fortunate that we have been able to get tech-savvy customers and tech-savvy staff. Because invariably if your client set is not open to [technology] then you struggle; no matter how much innovation you throw at them, they are just going to resist it."
Similarly, he says if staff are unwilling or scared, they are also going to resist it.
"In the early days of online banking, we couldn't advertise it in the branch because the staff felt it was a risk to their careers. But over the years, we have got ourselves into a client set that pushes us hard and we have a staff set that adopt, adapt and change."
Adoption and adaptation
Celliers says these days, the bank is seeing adoption and the adaptation of all forms of digital technology boosting the business.
"We have always been good in the middle market, but the top end of the market where the cost basis lay, is where it was harder to change behaviours of people. Businesses had to change their behaviours, as did wealthier customers. So what we have been delighted with is the pace at which digitalisation has been adopted and has penetrated into all of the client sets," he says.
Over the past year, Internet banking has remained fairly stable, with transactions on the bank's online platform growing by 7%. Transaction volumes for mobile banking were up 20% year-on-year. The bank added 320 000 new customers during the year and now has 7.8 million customers.
Celliers has seen a big change from "the old days" when only the tech-savvy early adopters used online and mobile banking and everyone else went to a branch.
"Now even in our branch you work on tech. We have tried to make sure we help people that are vulnerable and don't know how to do it themselves. In the branch environment, if you don't have your own device you can use our device, if you don't have WiFi, we offer free WiFi. So we made sure our environments can accommodate and facilitate all our customers, young and old; scared and not scared.
"Actually, the game now is not about trying to find a cooler way to put a button on a Web site or the app, it's about getting people comfortable to press the button."
Celliers believes a lot of banks globally are struggling to get their entire client base to switch to online platforms.
"Where we have been delighted [with the progress] is that we are able to 'gamify' through eBucks and through bank propositions integrated into your capabilities, to make sure we get penetration much deeper into our client sets than what our competitors would do. And that is where we are rushing hard."
"Internally, we talk about the e-race and we want to win the e-race. This is not just about having an app, the e-race is about how you convert your load that is currently happening through old manual processes into a digital experience. Then we could start reducing the old capacity and infrastructure and we live on a more efficient platform in the future."
Recent innovations
"The classic thing about banking is that you can keep yourself busy for the next 20 years, 100 years with innovating, advancing e-strategies, digitising, using big data platforms, etc."
And FNB has definitely been busy, launching a number of key innovations during 2016-2017. This includes bringing augmented reality to the app and launching its nav>> platform for home loans and vehicle management.
Nav>> Car was launched in April and the number of customers loading their vehicles onto Nav>> Car has already risen to over 50 000. This enables automated payment of car licences, offers values of vehicles, and enables payment of traffic fines, among other functionalities. Nav>> Home was launched in October 2016 and allows users to research property information and apply for home loans on the app.
A year ago, FNB launched its own branded smartphones, the ConeXis A1 and X1, which are manufactured in China by ZTE. This along with the bank's mobile virtual network operator (MVNO), FNB Connect, which launched in June 2015. FNB Connect now has over 520 000 active mobile subscribers, up from about 400 000 a year ago.
The bank also started offering instant life cover via its digital platforms and the insurance offering is something the bank sees as having "enormous potential to contribute materially to the bank's performance in coming years". The insurance business, FNB Life, already has over 3.2 million active policies and it was only launched in April.
Leveraging data
"The most powerful thing about a primary bank account, especially if you can then have a digital channel on it, is that while Amazon has to beg you to come back to their Web site, I don't have to beg people to come to my Web site. They come to check their balance because it's their money, and it's that eyeball that you get for free that you then have to do something with," he says.
Celliers notes the second thing is being able to use the data inside customers' bank accounts to predict what they need next, and then being able to make it happen.
"How does a bank ever make money? It's financing activities or investing activities. So how do I know if you want to buy a car or a house, how do I predict you want to do it before you have done it? How do I then help you do it without having to wait for the loan application to come to me?
"We know who your relationships are with, we know where you pay, what you do, what time of day or month. We know you have fallen pregnant before you tell your partner because you went to the gynaecologist and we know which gynaecologist that is. Or we know you go to the dodgy casino every night, or we know you are at church every Sunday. So the behaviour in a bank account, as a consequence of that transactional behaviour, gives us so much big data and we are investing heavily in that," he adds.
"I'm in the pipe that touches the fridge to Woolworths so can I have a shot at making the transaction happen, can I help finance the thing? How do I connect home, connect car?"
He says this is part of the reason FNB got involved in telecoms with FNB Connect "because what happens before the bank account is talk and search" and the bank wanted to be able to make that happen as well.
Celliers says FNB has always been about helpfulness but now it is taking it to a different level.
"That is our purpose and we know that today's tool is analytics and data and you can do so much more than the old way of just answering the phone on time. So the way we look at data and tech is about exponential helpfulness."
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