Absa treading the digital path

Absa will launch its first banking application early next year and has laid out its vision of using innovation as a weapon to grow and defend market share.

The banking application is currently being tested by about 100 staff before its launch in the first quarter of next year‚ said Adrian Vermooten‚ head of digital banking at Absa.

Vermooten and the head of the consumer banking unit‚ Simon Just‚ met the media in Cape Town to brief them on Absa’s innovations. These innovations include the launch of a new transactional banking product‚ targeted at entry level career graduates and professionals‚ called Potentiate.

Absa estimated that up to 250‚000 of its 12 million customers can potentially be migrated to Potentiate. The bank is planning to target the more than 150‚000 graduates entering the job market annually.

Potentiate has a first-to-market Titanium MasterCard embedded with the tap-and-go payment technology that allows a customer to pay for low-value transactions‚ and an LCD display providing a one-time PIN for added security when shopping on-line.

Just said that this is merely the start of a “five-year journey” by Absa to introduce innovations and ensure the Barclays-owned group is not left behind by rivals‚ some of whom where first to market with banking applications.

Absa said it will announce at the end of the month (November) a strategic partnership with an unnamed organisation to introduce “a South African first” in mobile payment acceptance technology.

It said that the “game changing” technology will create new opportunities in the payments acceptance space and “is set to fundamentally change the way that merchants in the commercial and enterprise segments make payments.”

Heated competition

Just said that Absa has never felt pressurised to follow rivals despite perceptions that it has been a laggard in introducing a banking application.

Rather‚ he said that Absa has been quietly implementing an integrated digital strategy that includes mobile and online banking and introducing a new generation of ATMs with enhanced cash acceptance and security features.

“Throughout 2013 we will begin to roll out a lot of value-added products. For us it’s a five-year journey and Absa is starting to convey we are bringing value and choice‚” said Just.

Absa’s innovation strategy proves the war for customers among the big banks has gone beyond them claiming the supremacy of their products or of their customer service. The banks are embracing the increasing convergence between mobile and banking technology to innovate.

First National Bank (FNB) was first to market with its banking application in July last year (2011). It has also since introduced other digital and mobile banking products‚ and has a three-year pipeline of more innovations‚ according to FNB CEO, Michael Jordaan.

Standard Bank and Nedbank have also launched banking applications. Like FNB‚ Standard Bank is now also selling smart phones.

Just said that Absa is investing in mobile payment solutions which bankers see as the future for banking. Insiders say that Absa is working with Barclays to extend the Pingit international mobile money transfer service recently launched in Kenya.

Vermooten said further that Absa will build a new payment ecosystem in partnership with local mobile phone companies to ensure customers will be gradually migrated to payment technologies such as the tap-and-go method.

Just admitted that rivals could easily launch their own version of innovations, but he believes differentiation is key so that customers can see value which will make it harder for rivals to poach them.

Vermooten said that Absa is also revamping its over 8‚500 ATMs in a three-year programme, costing more than R450 million.

More than 1‚000 ATMs have been installed and Absa is also installing units to provide three-month bank-stamped statements, amongst other services.

Absa is also migrating customers to digital channels such as mobile and online banking. The bank has more than four-million mobile bank customers.

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Absa treading the digital path