FNB Wealth and Investment is targeting “millions” of new clients in the next three to five years by making the range of investment products it offers more easily accessible to its 9-million retail banking clients, a move it says will help “democratise savings”.
Sizwe Nxedlana, CEO of FNB Wealth and Investments and Ashburton Investments — the asset manager that like FNB, is a subsidiary of FirstRand — says the plan will involve making “best of breed” investment products to help its clients meet their financial goals. Those products will include Ashburton Investments’ own funds as well as exchange-traded products and other offerings from third-party providers, which will be integrated into its retail banking offering via a single digital platform.
“We’ve got 9-million clients give or take. We’ve got this massive white space to grow into just by cross-selling into our own client base,” Nxedlana told Business Day in an interview. “If we can say in five years’ time that there’s a couple of million clients that not only bank and save with us but now invest with us, that for me I could describe as having contributed quite a lot to the democratisation of savings.”
Traditional banks are scrambling to become more integrated financial services providers that offer client solutions that go beyond loans and savings as they face an avalanche of competition from new entrants ranging from mobile phone operators to more nimble digital-only operators such as TymeBank.
MTN and Sanlam recently announced a $100m fintech joint venture to roll out insurance and savings products across Africa, while Standard Bank unveiled a revised strategy aimed at getting its different units to work more closely together as it seeks to become a digital platform bank.
The rush to digitalise has also been spurred on by the Covid-19 pandemic, which has forced customers and lenders to embrace more frequent and in-depth online interaction at a time when lockdowns and social distancing have become the norm across the world.
FNB recently launched its Shares Zero investment account as the digitalisation wave, coupled with growing interest in investment in both local and international markets by a younger generation of clients, has spurred a 41% increase in share trade values over the past year. The Shares Zero investment account has no monthly account fees and zero brokerage fees when buying any FNB or Ashburton exchange-traded products. Brokerage fees for third party products are capped at 25 basis points with no monthly account fee.
While Nxedlana was reluctant to disclose too many details on existing client number of the Wealth and Investments division he leads ahead of FNB’s results on September 16, he reiterated that he sees the unit attracting “millions” of new clients in the next few years.
“We think we are well positioned to increase cross-sell or penetration of investment management products, next to our deposit products, into our [retail banking] client base and that would result in millions of clients, millions of South Africans starting to invest,” he said. “To the extent that FNB keeps growing clients and we keep growing into that client base we’re essentially getting two bites at the cherry.”
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