Bank war hots up, goes hi-tech

2012-06-23 10:19

Absa tries to edge ahead of competitors with latest test project

Earlier this year, banks were ­fighting fit.

When three of the country’s ­major banks all launched low-cost entry-level banking products that allowed the customer to bank for as little as R30 per month, in direct competition to FNB’s EasyPlan, a war on pricing broke out.

However, the mode of competition has taken a detour and is now a fight to be the most innovative.

 This means that a tech-savvy ­approach, using platforms like ­social media to improve customer service, is the competitive edge that banks are now seeking, ­primarily to woo a more youthful market.

In March, customers voted Absa the worst bank in South Africa in a MyBroadband Business Tech survey concerning service levels, pricing and convenience among the top five banks. Absa achieved a score of 2.57 out of 5.

FNB came out on top with an average of 4.52 out of 5, closely edging out Capitec Bank at 4.51.

Hoping to make up lost ground, Absa has launched a test project called the “Branch of Tomorrow, Today” at Clearwater Mall, on ­Gauteng’s West Rand.

They hope it will serve as a case study for Absa to develop ­innovative products and processes prior to rolling these across its ­entire branch network.

The bank hopes to create a more interactive environment for customers while promoting and testing new ways of banking. It also wants to cut queues and lower transaction costs and volumes.

This comes after FNB’s April launch of dotFNB, a virtual and cashless bank branch at the ­Nicolway shopping centre in northern Johannesburg.

FNB’s new branch is a virtual ­environment for customers to ­experience online services, offering video-conferencing with financial experts and other interactive mechanisms not available in traditional branches. FNB has also added augmented reality technology to their new branch.

Where does all this virtual technology leave old-style banking?

“While our traditional branches are here to stay, dotFNB is a view of future banking. That traditional way of banking has to be changed,” says Barry de Witt, chief executive of FNB banking channels.

Absa’s new branch, by contrast, has merged technology and traditional banking by keeping to ­Absa’s existing model and adding technological aspects to it.

Absa’s chief executive for retail and business Banking, Bobby ­Malabie, says: “It is tangible evidence of what our customers have said they want.”

The branch has familiar Absa ­decor, but what’s new are table tops that are actually touch-screens that offer information about Absa promotions and specials. Customers can also digitally check their ­eligibility for home loans, vehicle finance and personal loans.

The branch also offers video conferencing, which allows customers to talk to experts in the Absa network.

A large-scale “interactive surface” serves as an information hub in the branch.

The dotFNB store, on the other hand, resembles a smartphone and iPad retail store, but also has bigger touch-screens.
There are no tellers and it has moved away from traditional banking with technology taking centre stage.

It has a conference ­area where customers can Skype with bank experts on their queries and get immediate help.

Absa’s new branch has, by contrast, not gone fully technological.

The branch’s front section ­consists of ATMs and a big touchscreen that tells customers about banking products. This is available even after normal banking hours.

All other services in this branch are only available during banking hours, but cellphone and internet-banking services are also offered at the ATMs.

An area for platinum account holders, the exclusive banking lounge, enables customers to make deposits and withdrawals immediately. Silver and gold Absa account holders have to pay a fee for the services in this lounge.

The branch has also done away with the traditional enquiries ­section and replaced it with a quick service area, where a customer is able to ask any queries, get bank statements and check balances, though cash transactions are not offered here.

Tellers in the new branch are equipped to handle enquiries as well as cash deposits.

Absa’s Test Lab will, for the ­moment, remain available only at Clearwater Mall. The company aims to learn about the banking ­behaviours of its customers – what will prove most useful to them will later be applied to other branches.

“We aim to learn how our ­customers behave and how they are using our products and how they are integrating technology in our banking. Customers want to do this in different ways and that is what we want to learn continuously,” Malabie says.

Now that Absa has risen to the challenge of FNB’s first digital branch, it is probably only a matter of time before other banks do something similar.

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