Disruption to financial services will be like Uber, says FNB CEO

The number of people downloading the FNB app has increased by 65% and parent company FirstRand noted in its results statements on Thursday that it needs to “right size” its physical infrastructure, but FNB CEO Jacques Celliers doesn’t foresee job losses looming.
He told Fin24 on Thursday, following the release of FirstRand’s annual results to end June that human interaction will always be part of banking and 80% of sales by the bank are still done in a physical environment while staff are reconfiguring their skills set to adapt to digital changes.
He likened the disruption in the financial services sector to ride hailing app Uber, which works off a digital platform but still requires human beings to drive the vehicles.

FNB, which represents FirstRand’s retail and commercial segment grew its pre-tax profits by 15% to R21.4 billion, with strong growth in SA. Total customer numbers also increased to 8 million.

The company has become renowned for its digital innovation with rewards system eBucks and eWallet service, with almost one million monthly transactions on the mobile money provider to the total of R21bn in 2017/2018.

But FNB has to look over its shoulder as several new banks plan to launch this year, with a focus on digital innovations - Discovery Bank, Thyme Digital and Bank Zero, run by former FNB CEO Michael Jordaan.
Celliers who said they “recognise the disruption in the sector” downplayed the looming competition saying they take inspiration from domestic competition.
He however believes that the new entrants to the market will find it hard to catch up to FNB, established in 1838 as it has significant data and a record of logins and interactions with millions of customers which it will use to innovate further.
Advisory and audit firm PricewaterhouseCoopers said in a report in March that the “Big 4’’  banks will need to strike a balance between managing costs and investing in the digital race, with the launch of the new banks with a digital focus.

Vocal clients 

Following the data breach at financial services company Liberty Holdings in June, with a third party holding clients’ personal details as a form of blackmail, Celliers said they take cybercrime very seriously.

“Cybercrime is a daily occurrence, I think we are always on the front foot in that regard,” he said.

Asked about frequent complaints on social media about FNB systems being “offline”, Celliers said that data shows that the bank has performed well compared to other institutions and there is stability on their platforms.

He added that clients “expect a lot from us” and many are “quite vocal” on social media, while FNB understands their frustrations when systems are down.

The market welcomed FirstRand’s results and the share price traded up 3.3% to R66.96 at 15:00 on the JSE.

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