Standard Bank South Africa’s inclusive banking strategy continues to yield strong results, with the bank building on its experience and successes in driving financial inclusion. In the past year, close to a million new accounts have been opened in the market segment with incomes under R8000/month.
In August alone, over 2 million transactions were conducted at Standard Bank AccessPoints (spaza shops providing banking services in underrepresented areas). This month, Standard Bank South Africa is introducing a new savings product, called AccessSave, to continue meeting the needs of its ever-increasing customer base in the lower end of the market.
“Standard Bank’s approach in this end of the market has always been to view the needs of our customers holistically”, says Leon Barnard, head of Inclusive Banking at Standard Bank South Africa. “We recognised early on the need to adopt game-changing business models. Rather than just amending channels through which banking is provided, or narrowly focusing on products offered, we have created an entire ‘ecosystem’ to provide banking to people in ways that are relevant and accessible.”
The new savings account, AccessSave, adds a further layer to the holistic offering. No monthly management fee is charged, no minimum opening deposit is needed, nor is a minimum balance required. It will directly meet an identified need of customers – to have a safe place to store and grow their money, without worrying that it is being eroded by fees and charges.
“A unique feature of the account is that it rewards customers with a competitive interest rate from their first deposit, no matter how small this is,” says Mr Barnard. “We also allow customers to set a savings target, and reward them with a further bonus interest rate when the target is reached.” A seven day notice period for withdrawals means that savings can be protected – another unique feature among similar products. “The account will encourage savings by making it both rewarding, and easy. Depositing funds at an AccessPoint in the customer’s community or at any of our ATMs is free,” Mr Barnard says.
Standard Bank’s key success in the lower end of the market is a proven model of providing basic banking services to people in their communities, which is unrivalled in South Africa. Through the AccessPoint model, Standard Bank partners with existing local retailers running spaza shops in townships and other traditionally underrepresented areas, to provide banking services such as cash deposits, withdrawals and money transfers in these shops. There are currently over 7 000 of these AccessPoints across the country.
“This year alone, over 12 million banking transactions were conducted at AccessPoints,” Mr Barnard says. “At a time when other financial service providers may be re-evaluating their delivery channels to the lower end of the market, it is clear that the AccessPoint model continues to be highly successful, and we expect to grow and build on this success.”
The AccessAccount launched earlier this year has also seen phenomenal results. “Standard Bank is opening over 140 000 of these accounts every month,” Mr Barnard says. “The success is a result of a range of factors. One is the fact that accounts are opened without needing to go into a branch – our local sales agents are able to open accounts on mobile devices, in under ten minutes, in the communities that customers live in. Another is the fact that this account has no monthly fees and a highly transparent pricing structure, directly meeting customer needs for affordability and clarity on what they are being charged for.
“And finally, the accounts allow for customers to bank and transact at AccessPoints within communities, through cellphone banking which they are automatically registered for, as well as in the traditional banking system of branch and ATMs.”
Standard Bank believes the holistic approach to banking the lower-end of the market is bearing results, not just for the bank, but for the broader goal of driving sustainable financial inclusion. “Financial institutions in the country are working hard to increase the proportion of people with access to formal bank accounts and other financial services,” says Mr Barnard. “Being able to do this correctly is not only key to improving social and economic progress, but is critical for the achievement of long-term sustainability and business growth.”