Capitec, SA’s largest bank by customer numbers, has amassed a team of more than 500 people processing data, giving it insights that help it take new products to market as the group ramps up its long-term strategy to diversify income streams.
The Stellenbosch-based bank has accumulated almost 2-trillion data points that it uses to create value beyond banking, through its three businesses, retail banking, business banking and insurance, as it implements its strategic initiatives.
The lender has spent about R6.3bn invested over the past three years re-platforming its IT systems for stability, agility and scale and systems to Amazon Web Services (AWS) cloud developed innovative payment solutions.
CEO Gerrie Fourie said the data in the company’s possession was a powerful tool that informed the group’s strategy and gave it a competitive edge.
“There is a reason we launched Capitec Connect. It is because our data showed it’s a needed service. The data we have allows us to understand the consumer much better. We are the only bank where all the data is behind the cloud. That tells you how serious we are about data,” Fourie said.
“We are having our three years strategy session in two weeks’ time and we will probably spend about 40% of that time on data. We have over 500 people with data titles behind their name in the group.”
Capitec Connect is the lender’s mobile virtual network operator (MVNO) business. MVNOs are usually non-telecom businesses — including FNB, Standard Bank Mobile, Mr Price Mobile and Pick n Pay — which lease network infrastructure from mobile operators to sell data and voice services to customers.
For a number of years, the largest player has been FNB. However, according to information communication technology research and consulting company Africa Analysis, Capitec Connect has emerged as SA’s largest MVNO, followed by FNB Connect. Both players boast more than 1-million SIM cards in the market.
Fourie said nearly 9-million clients bought competitor prepaid on the app every month. The group said in June its life cover product, with the update so far “exceeded” the company’s expectations.
Fourie said insights gained from the group’s data, its network of 850 branches across the country and army of 10,000 consultants would stand the group’s insurance business in good stead, saying the traditional insurance broker model was ripe for disruption and that the R100,000 to R3m cover segment was underserved.
The company’s funeral plan has insured 12.1-million SA lives, with the bank set to give the numbers of its life cover business when it releases its interim results later in the year.
One recent innovation by the bank, which has 22-million clients, is Capitec Pay, which allows clients to enter cell numbers on e-commerce sites and authenticate on the lender’s app, without requiring card details in a bid to beat fraud.
Capitec Business, formerly Mercantile Bank, will next month launch new low-cost packing of its point of sale card machine sales — as it raises the ante in the competitive business banking sector.
Capitec Business executive Karl Kumbier said the business looked to unlock potential of SA’s formal and informal business sector, with Capitec’s unsecured lending roots putting it in good stead to attract informal traders.
“The formal market has about R400bn of lending. We will target that. Nobody knows the size of the emerging market, but there is a good opportunity there as well. We have spent 18 months in Thembisa [a township east of Gauteng] to understand the market,” Kumbier said.
“What we have found is that the informal sector has basic needs. One is an affordable bank account and the other is when there is a bank account, how does one accept payment electronically. As businesses collect more payments electronically, we are getting data of what is coming in and we can start building a profile so we can lend money to that business when the need arises.”
Capitec Business now offers the Global Biz account, the business bank equivalent of the GlobalOne account.
Part of the rebranding from Mercantile Bank, which it bought from the Portuguese government in 2019, has included repricing of business banking fees to align to the wider Capitec strategy of offering services at an affordable price.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.