Home Banking Leveraging Disruptive Technologies to Drive Financial Inclusion within the Banking Sector

Leveraging Disruptive Technologies to Drive Financial Inclusion within the Banking Sector

by internationalbanker

By Ciko Thomas, Group Managing Executive of Retail and Business Banking, Nedbank 




Globally, disruptive technologies—such as artificial intelligence (AI), internet of things IoT), robotics process automation (RPA), blockchain and virtual reality (VR)—are changing the nature of the economy, society and consumer behaviour as well as jobs and industries such as banking; they are creating new value for both banks and clients. South Africa is no exception. With consumers’ needs and demands changing as their exposure to different technologies increases, banks no longer have the luxury of waiting for clients to bring their needs to the branch. To stay relevant, “traditional” banking-industry leaders have been adopting new technologies at a more rapid pace, working to integrate banking services into consumers’ daily lives while solving their needs before they realise they have them—all while leveraging the huge volumes of banking data  for their benefit and convenience.

Despite rapid progress in the banking industry, financial inclusion remains a challenge, with approximately 11 million South Africans stated as being unbanked or underbanked. According to the World Economic Forum (WEF), the perceived high banking fees and the amount of paperwork required by banks for applications—including slow response times—are some of the key reasons why a significant portion of the population remains unbanked. One of the biggest challenges for banks is lowering the costs of serving clients without compromising service, while at the same time making banking more accessible. Acceleration of digital solutions enabled by disruptive technologies gives banks the opportunity to expand their reach to more clients than ever before. The combination of data, mobile devices, and internet speed and reach has fuelled banks to edge towards demonetising mostly transactional accounts, introducing zero-based monthly fee accounts, therefore driving inclusivity and defending against new, mostly digital competitors. Bringing more people into the financial system is not just a strategic imperative for banks but rather part of a shared goal that will lead to a boost in economic growth in the long run, create new market opportunities and ease the unemployment and poverty burden on the economy.

This disruption has had a real impact on Nedbank’s approach to business, putting clients first with a true commitment to client-centricity. At the core of our retail and business banking strategy is the desire to deliver delightful client experiences through digital transformation. This has shaped the bank’s way of working, starting with the customer in mind and delivering products with better client benefits that are matched to the experience expectations of new and existing clients. To bring this to life, Nedbank has placed strategic emphasis on a Digital First & First in Digital philosophy, meaning that we would like our clients to opt for their first touch-point with the bank to be the digital-leveraging capabilities we have built to enable them to do so with ease and convenience, which will, in turn, make us “First in Digital”. This philosophy will allow us to win two battles: the battle for client and the battle for efficiency, supported by core capabilities that we are continuously building as a bank at a fast pace.

This is a bold ambition that we have set for ourselves, and it will enable us to cater to a broad range of client segments and create specialised industries and ecosystems in which we then operate. Our intended outcome is to deliver a difference that matters to clients, all the time.

Nedbank has made significant moves toward driving financial inclusion through the launch of three zero monthly feeaccounts: the Pay As You Use (PAYU), Unlocked.Me student and MobiMoney. MobiMoney is a mobile-based, zero-monthly-fee account that anyone with a valid South African identity number can open anywhere in seconds. Through this solution, Nedbank is creating a first banking home for many South Africans, directly addressing the key concerns relating to financial inclusion using USSD (Unstructured Supplementary Service Data) capability and saving clients time and money through a quick and frictionless mobile onboarding journey. Clients are also able to transact and buy value-added services such as airtime, electricity and pay DSTv, to name a few. Clients can withdraw money at any Nedbank ATM (automated teller machine), and we are now expanding the capability to do so at retailers. We have seen pleasing uptake of MobiMoney, with more than 100,000 mobile accounts opened since launch in August 2018. This offering will also enable bulk and seamless payments for corporates with huge numbers of casual-labour staff, who currently don’t have bank accounts, as payments will go through their mobile numbers into their mobile accounts.

This is what some of our clients have had to say about MobiMoney: 

“The person who has come up with MobiMoney is from a poor community who knows our challenges.” 
“I like that you can buy airtime and electricity for free.” 

With most banks providing zero-fee basic transactional banking, the next key step toward driving and entrenching financial inclusion is fostering a savings culture. In the South African context, a trust-driven, community-based savings initiative called Stokvel is a quintessential part of many consumers’ lives, with members of a Stokvel contributing an agreed amount regularly in return for receiving a lump-sum payment at a given interval. Currently, the National Stokvel Association of South Africa (NASASA) estimates that the Stokvel economy is worth R49 billion, with more than 800,000 Stokvel groups. Nedbank’s recently launched digital stokvel proposition taps into this, enabling better money management for stokvel groups as well as providing essential value-added services, including funeral, stationery and grocery benefits. Stokvel members can open their stokvel accounts in minutes using any USSD-enabled phone given our enhanced digital onboarding process.

“I feel a lot safer knowing this product was designed for stokvels, so we know the amount of people that could access the money.”

In addition to this, Nedbank has partnered with Ecobank to enable a safe, cross-border remittance solution that allows documented people living and working in South Africa to instantly transfer money to any one of the 33 countries in Africa in which Ecobank operates, without the need to visit a branch to sign up or make transfers.

To stand out and be competitive goes beyond just being innovative. Banks need to ensure that they are solving real client problems and pain-points, understanding underserved segments and identifying unmet needs. Becoming design-led is a strategic priority for businesses globally. It is increasingly being used as a strategic tool to differentiate products and services and strengthen existing brands in an increasingly competitive world in which most solutions are easily replicable. In line with Nedbank’s ethos focused on being financial experts who do good and give clients back the gift of time, we’re obsessed about the social and commercial impacts of the solutions we have created in the market.

“Investing in design at a strategic level has helped us reimagine and refocus on what solutions we choose to build to serve our customers and help them see money differently,” says Ray Naicker, Nedbank’s chief digital officer.

We launched a proprietary client-centred design approach combining human-centred design principles and digital innovation to deliver easy-to-use, market-leading solutions to clients. This was done by establishing a world-class centre of excellence for design, embedding it within business through hosting an industry-first design week, which launched the different design capabilities across the retail business. This will help us be digitally impactful in how we deliver outcomes for clients, as we use a client-centred design approach, iterative prototyping with client testing, and evolved measurement and feedback processes that allow for real-time analytics and feedback from clients. To date, more than 60 priority initiatives have been taken through the client-centred design approach, and we are scaling fast.

“We have invested heavily in our client-centred design capability to help us build world-class digital products that help us win in the market,” says Ray Naicker, Nedbank’s chief digital officer. “We have also embedded a new world of work principles which are agile, faster and more connected called nWOW, and this is part of the driving force that will help us rapidly adjust and evolve our business approach.”

The nWOW philosophy revolves around the spinning up” of multi-disciplinary teams, which are then mandated to deliver a solution to market end-to-end within 12 – 16 weeks, from ideation to commercialisation. The multi-disciplinary teams, called squads, operate as fully empowered, autonomous entities and get to pitch their ideas to a panel, a similar concept to what you’d see on Dragons’ Den. Pitches are prioritised and resources allocated to those ideas that are commercially viable, will delight clients through solving critical pain-points and will help us create differentiation in the market.

“I have been encouraged and excited by the cultural shift our new ways of work is driving. It is known that ‘culture eats strategy for breakfast’. I have witnessed a significant cultural shift esp amongst our leadership and squad members where digital transformation has become a mindset rather than an activity. In our case, culture and strategy are sharing a meal says Lizzy Mogale, Retail and Business Banking Strategy Executive

We have landed various solutions using the nWOW philosophy and design processes, including the successful launch of the Nedbank Money App with extended in-app services to include innovative transactional capabilities such as Pay Me, Balance Peek and QR (quick response)-code-based payments via Scan to Pay. Further digital enhancements to the bank’s service offering include self-service features such as changing ATM and card limits, soft blocks on cards, profile maintenance, asset-finance settlement requests and eFica, which allows customers to open a transactional bank account via the app. Nedbank has also enabled a range of value-added services (VAS) including Prepaid Data and Airtime, Lotto and Electricity. Additionally, clients have benefited from easier access to the Nedbank Greenbacks loyalty programme, being enabled to view their Greenback balances as well as make low-value redemptions on the app. We also added chat capability, enabling clients to connect directly to a banker when assistance is required. On average, Nedbank has released a service each week since the launch of the app, bearing testament to its fast-paced execution. Our app NedbankMoneyTM received one of the highest ratings in both iOS and Android stores amongst South African banking apps.

The bank has also externalised and entrenched itself into clients’ lifestyles. This was done through digital solutions such as HeyNed, a digital concierge service that gives Nedbank Money App users a 24/7 personal assistant in their pockets—another market first.

“I will gladly continue to pay my subscription fee for the convenience of having someone source cleaning services for me and taking that administrative burden from me and saving me so much time! I will recommend HeyNed any day!” said one of the clients who had just experienced HeyNed.

Nedbank has also created a platform specifically for youth, which is anchored on three pillars: banking, lifestyle and potential called Unlocked.Me. Youth gain access to exclusive deals and trends, from fashion and new-to-market gadgets to exciting travel deals through the platform at preferential prices. The potential pillar is specifically designed to assist youth in unlocking their career potential through job-readiness courses, mentoring and advice from those who have climbed the ladder. The banking aspect gives students access to zero-fee accounts for simple, everyday banking; they are onboarded digitally through the app. Our Marketplace API (application programming interface) offering is designed to connect into various online marketplaces and stores, giving consumers seamless access to credit without having to leave the platform from which the sale originated. One of our flagship projects is the Unsecured Lending Marketplace API, a digital-credit ecosystem enabling third-parties to tap into our ecosystem, driving loans fulfilment at the points of purchase for e-commerce players.

“Great to see a bank opening up for developers”

Attracting and retaining the best talent remains a critical part of a company’s success. They are integral to heightened client-satisfaction levels, and we at Nedbank have ensured that both our people and our practices are ready to meet the challenges and opportunities of the future. We have identified various key initiatives that will transform our employees to be “future fit”, including empowering employees with decision rights to enable quick turnaround responses to clients as well as ensure greater autonomy for decision-making and creating an agile execution-based culture. We are also cultivating a digitally led learning culture internally through the enabling of digital learning platforms and creating a learning environment supporting multi-skill opportunities, as well as entrenching new behaviours and a mindset amongst our staff to build a world-class, front-line cadre. Examples of these include the launch of Robotics and Coding academies within the bank.

For the Nedbank team, our goal is to be the money experts who do good, which we achieve through simplifying, humanising and digitising our offerings to the market, so as to boldly help the continent to see money differently and to improve financial health and quality of life. This is achieved through the delivery of market-leading experiences and service excellence, which make a real difference to clients. Nedbank’s staff have already seen their client-centric strategy take shape, with strong results from the 2018 South African Customer Satisfaction Index (SA-csi) industry survey.

Nedbank’s Retail Net Promoter Score (NPS), a measure of client satisfaction and loyalty, increased by 11-percentage points, the most improved NPS of all the banks, a testament to the impact our journey to date has had on clients.

“I have no doubt that the wave and pace of change we are witnessing is not going to slow down with time. The pace at which we respond to this change determines whether we win or not, as a bank. I am confident that Nedbank is on the right path to winning.” Ciko Thomas, Group Managing Executive of Retail and Business Banking, Nedbank

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