Absa, SA’s fourth-biggest lender by market value, wants to bring banking back to the people by using mobile branches to lure new customers on farms and taxi ranks, while also expanding its physical branch network in rural areas, even as rivals such as Standard Bank and Nedbank slash their branch footprint.
In a market dominated by Capitec, Absa has set itself the ambitious target of adding 100,000 new accounts a month.
That forms part of its strategy to make bigger inroads into the youth market, as well as entry-level and inclusive banking, which accounts for 4.5-million of Absa’s retail banking client base of 9.5-million.
Though Absa has a strong presence in the core middle-market banking segment as well as affluent and private banking clients, the bulk of its customers in this space are in the more mature phase of their life stages. To counter this, Absa is making an aggressive push into the youth market.
Perhaps its most ambitious target is the entry-level and inclusive banking market, which largely focuses on blue-collar customers earning R3,000-R5,000 a month or those dependent on government grants, a segment that has largely been cornered by Capitec.
To do that, it is planning a mix of expanding its digital presence, potentially rolling out more branches in regions where cash dominates, such as Limpopo and Mpumalanga, and using new mobile branches.
“We want to play in all markets and across all segments,” Tshiwela Mhlantla, managing executive for physical channels in Absa’s retail and business banking unit, told Business Day.
One of Absa’s innovations was born during the July 2021 riots, when the destruction of some of its physical branch network forced it to roll out mobile ATMs to service clients.
It soon realised that these clients needed more than just access to cash and quickly moved to a mobile kiosk it dubbed a “bank on the move”, which could also provide lending and funeral cover solutions.
Absa has a “bank on the move” in KwaZulu-Natal and another in the Eastern Cape, with two serving its central region of the Free State and the Northern Cape. It recently tested a mobile kiosk at the Klein Karoo Nasionale Kunstefees in Oudtshoorn and such was the success of the initiative that it now has plans to roll it out across SA.
“I’m more than convinced now that we have to expand that capability as a matter of priority into the other regions,” said Mhlantla. “Areas that have got farms ... big corporates that we bank where we have relationships to acquire clients on site ... taxi ranks. You’ll be amazed how people appreciate banking coming to them.”
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