Capitec chief executive officer, Gerrie Fourie, says that the bank now has 14.5 million customers – an increase of 600,000 new customers since last reporting.
Fourie told What’s Next in Fintech host Aki Anastasiou that the bank has seen some changes to customers’ banking behaviour during the Covid-19 pandemic and nationwide lockdown, but there was also suprisingly little change among certain demographics.
The biggest swings were seen in the high-income bracket, where there was a major shift to embrace digital banking and online communication. However, in the low-income bracket, cash remained king.
“At lower-income levels, there was no real change or swing (in behaviour), because they are very cash-dependent. We expected a big cash reduction, but it was actually very small,” Fourie said.
This posed an interesting challenge for Capitec and other banking groups, he said – how to get lower-income groups to be less cash-dependent.
Fourie said that digital banking was the path forward for banks, and that fintechs would play a big role in this. But despite early claims that fintech companies would be the ‘great disruptors’ that would topple the legacy banks, there is a different view now.
“It’s more of a partnership now,” Fourie said. “Fintechs are important going forward, but it’s a partnership approach (with legacy banks) to optimise the client experience.”
The reason fintechs have struggled to topple or overtake banks comes down to two major hurdles, the Capitec chief said: security and volumes.
“We’re sitting with 14.5 million clients, and that is a large volume to handle, and a lot of security to handle,” he said. “The moment you are working with a fintech, those are the two questions that always come in.”
Fourie said that the way forward is a ‘platform’ approach, where different fintechs can plug in or plug out – which allows for flexibility in delivering different services.
“You’re going to use fintech company A, who has the best client solution today – then a year from now somebody else is coming with a better solution. You need the flexibility to be able to switch in and out.”
The banking chief said that while the Covid-19 pandemic has disrupted businesses and trade, and forced the company to adapt to a new way of working, it is still pushing ahead with its digital and fintech projects.
The acquisition of Mercantile bank will help the group move into SME banking, where Fourie says the banks sees huge opportunity, while the retail banking side will see a focus on client financial education and assisting customers to understand their finances.