FNB grew transaction volumes through its digital channels by 12% in the six months to end-December 2024, a sign that the bank’s technology strategy is continuing to pay off.
Over the years, FNB — the retail banking arm of JSE-listed FirstRand Group — has modelled itself as the most digitally focused of the country’s big four traditional banks, which includes Standard Bank, Absa and Nedbank.
According to FirstRand’s latest interim earnings report, transactions for FNB’s digital channel, which includes app, online and mobile USSD (mobile banking), rose 12% to 449.5-million.
In the year to June 2024, the bank recorded just under 801-million transactions. This may rise in this financial year to 900-million transactions, if the trend continues.
The bank’s strategy is to have a digital platform “with market-leading interfaces that enable the provision of contextual, cost-effective and innovative integrated financial services offerings to both retail and commercial customers on either an assisted (in-person) or unassisted (self-service) basis”.
SA operates a dual economy with a sophisticated banking system, which was a global pioneer in implementing a real-time payment-clearing system in 2006. But there are also high levels of poverty and many people still do not have bank accounts.
The country’s biggest banks have had to retrofit new systems onto the old — with varying levels of success. This is not just one bank’s problem — the industry has to invest as a collective in upgrading the system.
In 2022, SA ranked first in the average digital maturity score in consulting firm Oliver Wyman’s digital banking index compared with eight nations, including Spain and the UK.
For its part, FNB has invested in a number of areas in an effort to give it an edge such as pushing more customers to use its mobile banking app and website, and promoting its mobile virtual network (MVNO) unit FNB Connect, boosting real-time payments locally and internationally through BankservAfrica, partnering with the likes of Apple, Samsung and Google for contactless payments, and perhaps most significantly, promoting its loyalty programme, eBucks.
In November FNB partnered with BankservAfrica, the country’s largest automated clearing house, to provide a new way to send and receive amounts up to R25,000 between SA, Namibia, Lesotho and Eswatini, within seconds.
E-commerce turnover that FNB can take a commission on, including sales of electricity, mobile and digital vouchers, amounted to R10.8bn, up from R9.5bn in the previous comparable period.
About 3-million customers use these services, the bank said.
FNB’s digitally active customers grew 4.2% to 7.4-million by December, from 7.1-million a year earlier.
The bank said its digital channels “continued to deliver solid volume growth in line with its strategy to drive customer take-up of digital interfaces and migration to the FNB app. Increased card activity also resulted in good growth in transactional volumes”.
Transaction volumes on the bank’s app grew 16%.
Standard Bank has also increased its investment in technology, reporting a 28% rise in digital transactions while containing cost growth at just 2%. This is after spending R11bn in the first half of 2024.
Like FNB, a big part of the bank’s strategy is to migrate customers to digital platforms. Digitally active retail clients in SA grew by 7% for the six months to June 2024 as more clients transitioned to digital channels. This translates to digital transactional volumes increasing by 23%, with a decline in branch transactional volumes of 12%.
FNB reported that since the launch of its app, 5.3-million virtual cards have been activated and R100.1bn in value has been transacted. A virtual card is a digital payment card that works like a physical card but doesn’t require a physical card. Virtual cards can be used to make purchases online or in apps.
“The virtual card is key to facilitating more secure e-commerce transactions,” said FNB.
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.