More than half of Africa’s adult population still lacks access to the formal financial system. Even among those with bank accounts, many rely on family and friends, or informal micro-lenders, when they need credit, and consider personal or business insurance an unaffordable luxury.
But innovative technological solutions are beginning to close the gap. The World Bank’s 2018 Findex for sub-Saharan Africa showed that 34% of adults had made or received digital payments in the past year, while 21% had a mobile money account – accounting for almost half the total active mobile money accounts in the world.
Standard Bank continues to partner with fintech companies to provide safe and secure digital solutions in a responsible manner. Our intention is to be a truly digital as well as a truly human group. Digital solutions enable us to meet human needs and to further human aspirations, in a cost-effective and sustainable manner.
Our digital wallets and apps enable our customers to transact efficiently, safely and conveniently, while Business Online provides convenient digital banking for small businesses. Uptake continues to grow. In our African countries of operation outside South Africa, 92% of all transactions conducted in 2019 were digital. Digital transaction volumes increased year on year by 18%, while in-person transactions (including at branches) declined by 10%. In South Africa, 99% of transactions are conducted digitally.
We also launched solutions to improve convenience for our clients. In South Africa, for example:
Samsung Pay enables our customers to transact securely with their phones and other digital devices at contactless-enabled merchants and traditional point of sale devices, with technology that mimics the magnetic stripe on a bank card. Between the launch in late 2018 and December 2019, over 37 000 customers had digitised their cards and almost 500 000 transactions had been concluded.
We’ve partnered with Cape Town based technology company iiDENTIFii to enable new customers to open accounts remotely, using biometric digital identity verification. Customers can open an account in under 60 seconds, from wherever they are, with no need to visit a branch. All they need is a mobile phone (Android or iOS) and an official identity document. They validate their identity document (ID) by taking a selfie, verify their address, and provide additional information such as their source of income. iiDENTIFii matches the data from the selfie and the ID document with a facial biometric at an issuing authority or government department. The technology is safe and secure, and iiDENTIFii has been verified as legally compliant by ENSAfrica. Customers can use the iiDENTIFii process to open a MyMo or Shyft account and are able to transact the same day.
Our customers can purchase Apple, Samsung and Huawei smartphone devices through the bank. Devices can be financed over 24 months using an extended payment facility on Standard Bank credit card accounts. The facility is offered at an interest rate of 11% per annum. Benefits include a 10% discount on handsets, free voice and data to the value of a customer’s monthly account fees, 1MB of data for every R20 swipe, UCount points and up to 2GB of free data.
In Zambia, Stanbic launched digital lending in June 2019, cutting the application process for new loans from up to five days to less than a minute, eliminating the paperwork previously required, and significantly reducing costs. The service was initially launched for existing lenders seeking top-up loans. We are gradually extending it to new borrowers.
South Africans, including those without formal bank accounts, are becoming comfortable with digital banking services. The use of mobile phone-based money transfer services continues to expand, enabling cash to be transferred conveniently and economically. In 2019, use of Standard Bank’s Instant Money transaction volumes grew by 18% year on year, while transactional values saw a 22% increase year on year. Average user transaction values have grown by 4% year on year with an average value of R753. The service is particularly in demand at month-end, during long weekends, school breaks and holiday periods.
Standard Bank offers the Instant Money transfer service at more than 6 500 access points across South Africa. Average charges are between R9.95 and R12.50 per transaction, with no fee to the beneficiary.
Businesses are also using the service to reduce payment costs and speed up turnaround times. Instant Money for Businesses shows annual growth of over 100%. Bulk Instant Money allows businesses of any size to disburse funds through the Instant Money platform to any person in real time. Recipients don’t need a bank account and can collect their funds at a date and time of their convenience.
As our clients move increasingly toward digital channels and away from the use of branch-based services, we need to adjust accordingly.
In line with changing customer behaviour, we closed 90 branches in South Africa in 2019. Many of the impacted employees were successfully redeployed to other roles in the bank. 920 opted for voluntary retrenchment. Fewer than 100 employees were formally retrenched
We currently have 528 branches in South Africa, and are investing in the development of 244 of our most used branches, to better meet our customers’ needs. We continue to work with our clients to raise awareness of alternative options to branch services, while acknowledging that some people prefer to use a physical branch for certain banking requirements.