Home Banking The Digital Imperative for Banking in the New Normal By Ciko Thomas, Group Managing Executive, Retail & Business Banking (RBB)

The Digital Imperative for Banking in the New Normal By Ciko Thomas, Group Managing Executive, Retail & Business Banking (RBB)

by Prashant

By Ciko Thomas, Group Managing Executive, Retail & Business Banking (RBB)

As the world reels from the shock of the COVID-19 pandemic and scrambles to implement life-saving measures and regulations to curb the spread, individuals, communities and businesses are desperately trying to absorb and deal with the impacts of the virus.

The businesses that are likely to survive this challenging period and contribute meaningfully to long-term economic recovery are those that are emerging with solutions that address consumers’ most acute needs and that have previously built a solid foundation of digital capabilities that can now be leveraged to make life simpler for clients.

For banks, there is an opportunity to leverage their mature digital-transformation journeys to emerge stronger, despite the likely margin squeezes and higher credit impairments. In this new environment, digital readiness will play a significant role in achieving differentiation and competitive advantage

“Digital technologies are doing for society and business what the steam engine did for horsepower. Proof of our innovation horsepower is the velocity of delivery of digital innovations commercialised in recent times.”
Fred Swanepoel, Nedbank’s Chief Technology Officer

Leveraging digital for banking and lifestyle enablement

Access to digital banking has become increasingly essential in South Africa in recent years. The pandemic has demonstrated the varying maturity levels of the digital-transformation journeys of the different banking role players in the country and highlighted the importance of end-to-end digital fulfilment and servicing, particularly in light of the restrictions currently in place. As a bank that aspires to lead digital banking across Africa, Nedbank has made a monumental effort over the past few years to provide clients with digital access to a range of products, services and solutions. We have deliberately accelerated our digital transformation, building innovative, market-leading digital capabilities, solutions and services that enable the aspirations of our clients.

For most organisations, the hard-hitting reality of COVID-19, especially with the imposed lockdown conditions, has increased the importance of being able to adapt quickly with new business models, converging disruptive technologies and digital solutions to meet the evolving needs of clients. As the “new normal” sets in, agility, creativity, relevance and speed to market become increasingly important, as does the ability to tap into existing digital capabilities to expand offerings or even repurpose them.

This crisis has created the real test of multi-channel strategies, seamless integration and ready availability of products and services across different digital channels and platforms. Banks are being tested on their ability to meet clients’ needs through digital platforms with end-to-end fulfilment and to deliver and manage client relationships digitally, without compromising service or client satisfaction. There is also an urgent need for banks to demonstrate their ability to create agile content in quick reaction to the daily changes taking place in society and, in so doing, build their brands in humble, relatable and sensitive ways.

At Nedbank, one of our key focus points during the crisis has been on leveraging digital to fulfil our social mission, which is to provide authentic money strategies that help people to manage their money better. And at the same time, to make those Nedbank products and services readily available across all channels, to enable people to achieve the money outcomes they need.

AVO is Nedbank’s bespoke e-commerce platform

With this objective in mind, one of our first responses to COVID-19 was to launch a digital portal (https://together.nedbank.co.za/) to help clients manage the impacts of the crisis on their lives and finances. The portal focuses on providing real-time solutions for clients, including explanations and access details for Nedbank’s various debt-relief programmes. Such debt relief was one of the most pressing immediate needs identified by our clients. Within a few days and by leveraging the onboarding capabilities that we have built over the years, we were able to digitise the debt-relief application process and make it easily available across our digital channels, such as the Nedbank Money App, online banking, USSD (Unstructured Supplementary Service Data) and our website at www.nedbank.co.za. The digitisation of these application processes not only provided a sense of comfort for our clients but also served to reduce significantly the pressure on our contact-centre staff and consultants, many of whom were now operating remotely and being inundated with client requests.

In addition, we assisted clients in managing their day-to-day lifestyle requirements through solutions such as HeyNed, a virtual personal assistant accessed from the Nedbank Money App, which gives every client the ability to order and pay for essential goods and services and have them delivered to his or her doorstep. Before the COVID-19 crisis, the HeyNed service did not include the ability to order food and many other household goods. However, as part of our response to the lockdown situation, we repurposed the platform capabilities to ensure HeyNed addressed the key pain points of a society in isolation. Additionally, HeyNed has become an invaluable lockdown resource for many families, providing access to information and services such as educational materials for homeschooling, recipes and ideas for entertaining family activities.

HeyNed is a virtual personal assistant accessed from the Nedbank Money App

The crisis has also created challenges for many South Africans in terms of accessing essential services such as healthcare, medical essentials, fulfilment and delivery of over-the-counter scripts and home-repair services. In response, Nedbank brought forward the launch of its beta version of AVO, another example of market-leading digital innovation delivered through unique user experience. AVO is Nedbank’s bespoke e-commerce platform with a difference: a one-stop lockdown companion. In addition to meeting client needs for the aforementioned essential services, it also offers a range of digital home-entertainment services with vouchers for music, gaming and video on demand. The effectiveness of this innovative online platform lies in the agility it provides through strategic partnerships with service providers.

Then, clients can leverage the Nedbank Money App to complete the vast majority of their day-to-day transactions and access a range of Nedbank solutions, including many that are very attractively priced. Clients struggling to meet financial obligations can also access customised offers for personal loans, overdrafts and credit cards, the quick processing of which is enabled using advanced analytics and artificial intelligence. In fact, Nedbank clients who are app users can access more than 80 digitised services ranging from the ability to freeze or unfreeze cards, dispute debit orders and change limits on cards to completing most of the activities that they would otherwise have needed to visit a branch to accomplish.

We also remain cognisant of the needs of our data-sensitive clients and those with limited device memory, and, in response, we launched a streamlined version of the Nedbank Money App called Money App Lite, which has a smaller installation size (1.8 MB), uses less space and includes all essential banking and security features, including biometric security authentication.

Our Managed Evolution journey, which focuses on core-banking system rationalisation, standardisation and simplification, has also enabled end-to-end digital onboarding across our digital channels, including internet banking, self-service kiosks and staff-assisted branches. This affords clients the opportunity to use the channels of their choice to take up the banking solutions they need. Through this programme, we have built digital capabilities such as eFica, digital signature, customer 360 (MDM master data management), single-view credit engine, credit pre-approval, to name a few.

A Nedbank client self onboarding kiosk

A further impact of the restriction of movement is that it has significantly limited the ability for consumers to send money to people who are financially dependent on them. The Nedbank MobiMoney account solves this challenge. This digital wallet with transactional capabilities allows clients to open an account quickly using the USSD and then be able to send or receive money directly using mobile-phone numbers.

Our dedicated youth banking and lifestyle offering, Unlocked.Me, has also come into its own during this time. The platform helps young people to realise their potential through access to jobs, mentors and coaches as well as online courses. During the lockdown, we have seen huge volumes of students visiting the platform to get help to write their CVs (curriculum vitae), access entrepreneurial ideas and explore online courses.

Enabling business survival and recovery

The impacts of COVID-19 and the lockdown response have also been severely felt by businesses. Small businesses, in particular, need platforms to receive information and connect with other businesses. Nedbank’s SimplyBiz® platform helps them to connect with like-minded entrepreneurs, share advice, access business tools and financial solutions, and it matches them with mentors and coaches to help them deal with the challenges of COVID-19.

Another resource that we launched in the past few weeks is BackaBusiness. This innovative crowdfunding platform gives small-business owners the capability to crowdfund their COVID-19 cash-flow needs by offering future-dated, discounted vouchers for goods and services that can be used later in the year in exchange for immediate funding. In the next few weeks, we will also be launching MoneyTracker, a financial-planning and management tool. This integrated solution enables clients to categorise, manage and monitor their spending online and on the App.

The digital-payments imperative

Nedbank has been actively driving the adoption of contactless payments, anticipating a surge in digital-payments adoption levels in South Africa and Africa after COVID19. There is more diversity within the world of digital payments than meets the eye. If we define digital payments as those in which the payer initiates the payment electronically (cashless), then the category includes channels such as mobile payments, mobile wallets, debit/credit cards and e-commerce, all offered by Nedbank to both merchants and individual clients across various channels.

Over the past year, we have been actively providing solutions into new frontier markets that are composed of predominantly informal and micro-, small- and medium-sized enterprises. Due to the nature of this market in South Africa, and the diversity that exists, we have gone to great lengths to ensure that we drive the adoption of cost-effective, simple payment mechanisms. We are also aware of the income pressures in this environment and the need to rethink our business model as a bank to ensure that we enable and promote financial inclusion and the growth of enterprises. Therefore, we have been challenged, in redefining our current solutions, to meet ever-changing customer needs, such as the collection of donations and peer-to-peer payment mechanisms through the rollout of our MobiMoney wallet offering.

We also embrace and encourage other payment mechanisms, such as QR (Quick Response) code payments that further reinforce social distancing and address safety concerns linked to card and PIN (personal identification number) payments. We were the first bank in South Africa to provide the ability to scan any QR code directly from a banking app—a solution driven from both the issuing and acquiring sides to enable an active and effective payments ecosystem. We see significant opportunity in this space on the back of recent developments, and as QR code-payments adoption is expected to grow through wider enablement of QR code-payments acceptance.

In addition, we have built a notable e-commerce network and are poised to offer compelling e-commerce payment and acceptance capabilities to our various business clients. This includes a lending API (application programming interface), which can be hosted on various partner sites, allowing clients to access credit facilities at the digital point of sale to finance their goods without leaving the e-commerce platform. This is imperative, and we have been working tirelessly to enable all of our clients with delivery or logistics businesses to meet and benefit from rising demand in this service category during the lockdown.

The velocity of delivering digital solutions during the crisis has set a new standard for us as a bank, and it’s something of which we are proud. This is an outcome we would like to make our new normal.

Digital service with heart

None of the digital innovations implemented by banks and other businesses would be beneficial to clients without remote customer-servicing capabilities. Some time ago, Nedbank launched conversational banking, which gives clients the ability to chat in real-time on our digital platforms to bankers who can help address all of their banking needs directly.

Remote working for staff

Thanks to the robust infrastructure already in place, Nedbank Group Technology was able to immediately initiate and enable the work-from-home protocol for most Nedbank staff, but also for around 80 to 90 percent of the technology teams themselves. Importantly, the execution cadence of the technology teams has not dropped during the COVID-19 pandemic.

Examples of the autonomous enablement within the entire Nedbank Group remote-working context include:

  • Optimised portfolio-prioritisation planning and reviewing: Effective portfolio prioritisation is critical. Without proper management or direction, many organisations will misalign funding toward low-value or troubled initiatives that can pressure the future enterprise outlook. To successfully navigate effective portfolio-prioritisation planning, the best organisations incorporate an unbiased, committed process that aligns strategy, business outcomes and resource availability.
  • Implementation of best practices for remote-working management: Common challenges of remote working include reduced creativity and collaboration between employees, as well as issues with morale. However, Gartner’s research indicates that productivity concerns regarding remote employees have been exaggerated. Employees who work from home often manage their time to leverage the time of day when they feel most productive. Accordingly, Nedbank managers measure performance by outcomes, not hours, for remote workers.
  • Driving value from remote-working tools and technologies: To increase utilisation and improve the effectiveness of remote-working arrangements, cloud-based productivity tools and other employee-facing technologies are being communicated and implemented.
  • Building durable two-way communication channels: Nedbank recognises the need for all organisational leaders to communicate openly and often with those who report to them. Priorities include keeping employees informed, giving context around crisis impacts and responses, and keeping channels of communication in place and in use.
  • Tapping into technology for staff development and wellness: Remote working conditions don’t negate the need for staff development and wellbeing. We continue with personal development for our staff, leveraging online training solutions such as Skype and Microsoft Teams for necessary change management and the provision of licences to self-learning platforms such as LinkedIn Learning. Significant focus is also placed on providing support to all staff and their families, including the launch of our Staff Wellbeing site, promoting the use of our wellbeing-services provider, ICAS (Independent Counselling and Advisory Services), and giving access to a variety of vital services.
Post COVID-19, how leaders and employees behave will change on many levels. It will have to be highly communicative, resulting in more frequent, short and targeted communication. Trust, transparency and empathy will be non-negotiables. Engagements must be focused on outcomes, wellness and more strategic execution of priorities. Organisations have to embrace a virtual society, both internally and externally. This will increase the demand for skilled remote workers and is a game-changer for the future of the workplace in how we recruit, contract, train and measure employees. Millicent Lechaba, Executive Head, RBB HR

Ultimately, the requirements for any financial institution to survive and win in a world of relentless change and ferocious competition have not changed—many of them have simply become more of an urgent imperative on the back of COVID-19. The world has undoubtedly entered a new normal, and finding ways to leverage innovation and drive digital advancement to support our clients and stimulate economic growth are now the keys to unlocking relevance and achieving business sustainability.

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