FNB sees spike in customer demand for global accounts as travel opens up

FNB has recorded a spike in deposits and transactions on its global account, which allows customers to save and transact in foreign currency, as easing Covid-19 travel restrictions boosts client demand for international currency.

The retail banking unit of FirstRand says account balances on its global accounts have surpassed R7bn after it experienced a 63% surge in new accounts being opened in the 12 months to end-May 2022. Expenditure by retail customers using the global account also surged 90% in that time frame, driven by foreign travel and customers transacting online from SA.

The FNB global account forms part of its broader global solutions offering, which includes a Channel Islands offshore bank account as well as investment and fiduciary solutions. The global account can be opened using the FNB and RMB private banking apps and gives customers access to more than 1,000 international airport lounges with 10 complimentary visits a year.

“The reopening of international borders has been a major contributor to the strong growth we see in our global solutions, and especially the usage of our global account,” said FNB retail CEO Raj Makanjee, adding that customers’ preference for contactless payments when travelling abroad has also surged. “As global travel and trade recover to pre-pandemic levels, we expect to see growing demand for global solutions.”

FNB’s global account offers clients the ability to save in nine foreign currencies: dollars, euros, pounds, Canadian dollars, Australian dollars, UAE dirham, Chinese yuan, Indian rupee and Swiss franc.

It also offers transactional capabilities in dollars, pounds and euros, which account for the majority of FNB clients’ foreign currency savings.

Global travel and international online retail through services such as Amazon appear to be driving the increase in customer demand for FNB’s global accounts, but concerns about local currency volatility may also be influencing client decisions. While the rand is only about 1.4% weaker against the dollar so far in 2022, it has fluctuated wildly against the greenback in the past 18 months, going from as strong as R13.41/$ in June 2021 to as weak as 16.36/$ in November 2021. So far in 2022 it has fluctuated from R16.09/$ in early January to R14.40/$ by end-March, only to slump back to R16.29 in early evening trade on Wednesday.

“Consumers and businesses have learnt hard financial lessons from the pandemic, and many are now aware of the need to make smarter financial decisions, such as mitigating the risks of market and currency volatility,” said Makanjee.