Investec has launched a new personalised offering called Programmable Banking, which will give targeted business and private clients the ability to customise their banking services .
The new offering is targeted specifically at tech-savvy business owners and IT professionals such as software developers, programmers as well as full-stack and UX engineers to enable them to craft their own banking experience by building bespoke notifications or payment limits for a fully customised digital experience. Programmable Banking clients will be able to use Investec’s application programming interface (API) to access banking data and then define rules using simple code to approve or decline specific transactions for any Investec Visa Card linked to their account.
Investec has been testing the new Programmable Banking functionality in beta phase with about 500 developers for some time but launched the new offering to select SA clients on Tuesday. The new functionality also allows clients to send transactional data in real-time via accounting systems like Sage or Xero and messaging apps like WhatsApp, email or Slack.
“Firstly we are looking at IT professionals as a new [client] segment from a bank perspective ... and the second is we are looking at existing business and individual clients who want a more personalised banking experience,” Devina Maharaj, Investec’s programme head for business online and API banking, told Business Day.
“It’s about moving from a space where as a bank we assume that we know what’s best in terms of product and what our clients need to enabling clients to co-create with us. We want to give you tools to help us develop what banking will look like in the future rather than us assuming we know.”
The move to target IT professionals by allowing them to customise their banking interface also marks a break for Investec’s traditional client focus on professionals with four or five-year degrees. Cumesh Moodliar, Investec’s head of private banking in SA, acknowledges that the bank is “breaking the mould a bit” but explains that this is in response to structural shifts in the labour market, particularly in the realm of tech and IT where a four or five year degree is not always commensurate with technical ability.
“We are stepping away from the hard and fast rule of a four- or five-year based qualification,” says Moodliar. “But we’re doing it in a way that manages risk from an Investec niche business banking perspective. For example, someone who has very specific SAP skills may have a far higher employability level than one of our traditional career entry points to private banking just because of shifts in the labour market.”
Targeting degreed professionals such as chartered accountants, lawyers, doctors and engineers has enabled Investec to maintain a very low credit loss ratio as such qualifications have traditionally been a very good predictor of future earnings. However, Moodliar explains that the inherently rapid evolution in the IT and technology sectors makes earnings predictability far more difficult to determine.
To address that Investec has partnered with Offerzen, a developer job platform, in order to get a more accurate gauge on what the employability and earnings profile of prospective clients.
“Our traditional model will still remain the cornerstone of what we do but there’s a key [client] segment that is changing very rapidly that we have to acknowledge that and look at ways in which we can get involved with it,” says Moodliar.
Investec also stresses that the new Programmable Banking offering will not imperil security as it only grants access to a very limited front-end of its banking platform.
“We are not opening up our banking code for developers to access. All our banking security protocols are still in place,” says Maharaj. “This is a module that sits outside our bank system and infrastructure that talks to the bank through the open API mechanism.”
The new Programmable Banking also adheres to the UK’s PSD2 regulatory principles, a set of rules and standards that govern access to banking and payment accounts by third-party service providers. Investec UK office is governed by this standard and though Programmable Banking will initially first be rolled out only in SA, the bank has deliberately opted to design the system in accordance with the British regulatory framework.
“While we don’t have open banking regulatory standards in SA we’ve gone with the highest level that exists internationally right now,” says Maharaj.
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