In a move that will ratchet up the intensity of competition in the banking industry, FNB has launched a new retail banking offering designed to win market share and stem the advances of a raft of newcomers and ambitious incumbents looking to dominate the middle-class market.
The launch of the Aspire offering comes as traditional competitors such as FNB, Absa, Nedbank and Standard Bank, note the arrival of the likes of TymeBank and an ambitious Capitec from the lower segments, as well as going elbow-to-elbow for market share at the higher-income segments with the likes of Discovery Bank.
“We are constantly refreshing our solutions and service models to align with the step change in customers’ needs while upping the ante on our competitive advantage,” says Raj Makanjee, CEO of FNB Retail.
FNB unveiled the launch of the Aspire product offering on Monday along with a raft of changes to its segmented product offering as part of its annual pricing and rewards review which kicks in changes from July 1.
Aspire is a transactional banking offering with a monthly account fee of R99 that can have a credit facility attached. It comes with a savings account, global account (forex) and a tax-free savings account.
The product is using explicit price reductions — spouses and partners will receive a 50% discount if they open a bank account — with more rewards linked to ebucks to attract and retain clients in the middle-income segment.
FNB estimates the target market for the new proposition to be about 3.5-million consumers that earn R180,000-R450,000 per annum.
This is done through cash back rewards (in the form of ebucks) for spending at Shoprite and Checkers, Clicks, Engen and Intercape. In addition, through FNB Connect, clients will receive complementary voice and data bundles and can also have their monthly account fee rebated should clients maintain a minimum balance in their savings or current account.
Should clients use an FNB Save or Insure product with the bundle, they can enjoy short-term rewards such as a smoothie or vouchers towards new shoes.
The offering may provide the first indication of where the intensity of new competitors such as TymeBank and Bank Zero find their feet, as well as where the battle with older competitors with Capitec is being most felt.
The bundled value offering and rewards draws on the data analysed through FNB’s banking platform and aims to offset the lower cost vanilla offerings of competitors with a more integrated offering using rewards, discounts and incentives.
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