Bank Zero co-founder Michael Jordaan points to slow, but solid progress

 ·20 Jul 2022

Michael Jordaan, co-founder of app-only bank Bank Zero says that it is progressing “slowly, but solidly”, following its launch in August 2021.

Speaking to Michael Avery at the BusinessTech Online FinTech Conference 2022, Jordaan said that the bank is not yet aggressively advertising its services, as it continues to fine-tune its product set. “We listen to our customers as they give us feedback,” he said.

“What’s encouraging us is that we are getting very active customers, they stay with us, the average balance is higher than we thought, the average transaction size is also much higher.”

Jordaan said the biggest success to date is the signing up of business accounts.

The banking veteran said that only once Bank Zero is entirely happy with its offering, having listened to its budding customer base, and ironing out any bugs, will it launch more aggressively.

Cash-in for business accounts at retailers is a new feature that the bank is working on, said Jordaan. Currently, Bank Zero customers must receive money via electronic transfers from another account, making it difficult for customers or small businesses that often deal in cash.

In the medium term, it is working on an Apple Pay solution. “We are also looking at approval to do cross-border payments,” said Jordaan. Bank Zero has claimed that it only needs 100,000 customers to break even.

Jordaan also briefly spoke about the success of the local fintech industry. “South Africans like technology, we are a nation that quickly adapts technology in general, and we like it if there is a solution that makes our lives easier – if we can make a plan – it’s in our nature,” he said.

He pointed to two demographic aspects in the country:

Firstly, a very price competitive market – consumers who are under a pressure financially. “So anything that brings a solution that is less costly, has a likelihood of success.

The other segment of the country’s consumer base is less concerned about price, and more about convenience – “which technology can answer to”, said Jordaan.

The banking lead said that if you can bring into market a product that is both cheaper and convenient than the existing way of doing things, South Africans have a way of responding very well to it.

Jordaan said that while the Fintech industry in South Africa is advanced, “we are significantly, materially lagging behind in most government services. Anyone who has recently had to go to Home Affairs for passport renewal will know what I am talking about.”

He said that there are a host of government services that could and should be automated, including driver’s licenses and vehicle license discs.

Jordaan also touched on the potential of cryptocurrency, despite its recent press. He pointed out that many central banks are monitoring and testing digital currencies. ” I am a believer in decentralised finance and also about autonomous organisations – I think it (crypto) could challenge our existing model of doing business.

Jordaan said that while NFTs can be seen as a bit of a joke among some – there are many serious applications within the space that serve as proof of ownership whether ID, passport, or title to a property. “NFTs may yet become the most exciting application of blockchains.”

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