Why banking can’t be free: Capitec CEO

Capitec CEO Gerrie Fourie says that he welcomes new digital entrants into the local market, but believes that a mix between brick and mortar, and digital is still the future of banking.

On Thursday, Capitec published audited financial statements for the year ended 28 February 2019, showing strong growth in headline earnings and customer growth.

Fourie said that its client base has grown by 15% over the past year, to 11.4 million people. On average, it said that 127,000 clients join the bank each month, with 500,000 new clients added in January and February alone.

South Africa’s banking sector is set for a major disruption in 2019 with the entry of three new players.

Patrice Motsepe’s TymeBank officially launched in the middle of February, Discovery Bank is in a soft launch phase and will be fully operational in July, and former FNB CEO Michael Jordaan’s Bank Zero is is in beta testing and is on track to launch in the second half of 2019.

On new digital-only competitors, Fourie said it’s good for the country, however the South African market in general still needs and wants to interact with people – especially on more complex financial matters. 

“Capitec believes in an omni-channel strategy that consists of a combination of digital banking, a strong branch network with superior service, and the ability to communicate with clients to help them manage their banking better.

“We still have over 6 million clients visiting our branches every month,” he said.

“We believe the real solution is a combination of digital, branch and very personalised communication, informing and adding value to a particular client. People want that personal contact.”

Through the launch of digital only banks, a perception has been pushed that banking can be free, said Fourie.

“Banking can’t be free. Banking is all about trust, regulation, cyber security, ATMs, infrastructure. You can’t do it for free.”

Commenting on the year ahead, Fourie said that Capitec will focus on business efficiencies and expanding its digital products and capabilities.

Digital banking client growth (monthly average)

Read: Capitec is adding 127,000 new customers every month

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Why banking can’t be free: Capitec CEO