Get ready for branchless banking |
WHEN TymeBank launched the first digital bank in South Africa, it did not just launch a bank. It launched an innovative banking business model – branchless banking – that would have been impossible without technology.
Branchless banking is a banking innovation that includes providing financial services to customers without TymeBank stores being housed in brick and mortar buildings. This model will have a far-reaching impact for the unbanked and the economy in South Africa.
The introduction of a branchless bank will be greatly appreciated by rural communities who currently have limited access to banks and have to travel long distances to access banking services.
Due to costs associated with establishing a bank branch, traditional banks avoid setting up branches in remote areas.
TymeBank has been set up in such a way that it works with existing retail stores in rural areas, such as Boxers where TymeBank kiosks will be accessible.
Cashiers will also serve as tellers to a certain extent as TymeBank clients can deposit and withdraw funds from them.
TymeBank is just the first of such banks, with more such in the pipeline, such as Xero Bank.
Traditional banks are also adapting from traditional and legacy models in the digital arena and reaching their clients via branchless means.
Absa Group recently introduced banking via WhatsApp as a way of enabling access to banking without visiting the branch.
South Africans have responded well to the branchless banking model.
TymeBank, for example, in its soft launch phase, was signing up 5 000 new customers each week.
Time will tell whether more South Africans will adopt this method of banking. There’s a potential that some bank clients will prefer banking with the help of a human being. Such a preference by bank clients will probably be the only saviour for traditional banks.
It may also be an advantage for traditional banks and allow them to charge higher fees for human contact and service.
Branchless banking should be closely watched by other sectors of the economy as well.
If the model works for banking in South Africa, we may see more industries using technology as their main infrastructure and not establishing brick and mortar branches to offer services.
This will have a massive impact on the employment of people and the nature and skills of jobs required.
The property industry and the renting of commercial property by developers will be affected.
TymeBank is probably the first case study of what some South Africans have been talking about for sometime – the effects of the Fourth Industrial Revolution. And South Africans had better be prepared.
Wesley Diphoko is the editor-in-chief of The Infonomist. He is the regular tech commentator on SAfm #HomeRun show every Friday. You can follow him on Twitter via @WesleyDiphoko