Banking on the move

Banks and telecoms firms size each other up, as online banking platforms become fair game

MTN’s recent appointment of new executives with strong experience in the banking sector is no accident. The mobile operator intends to spread its wings further into financial services, taking on the banks in the process. At the same time, SA banks are beefing up their digital platforms to make it more convenient for customers to transact. Analysts believe the bank branch — a traditional mainstay of the industry — may someday cease to exist. This comes as banks try to stave off competition from network operators and other nontraditional banking firms, which have harnessed the power of the Internet to expand into new territory.

MTN recently poached Stephen van Coller from Absa, and appointed him head of strategy, mergers and acquisitions. The group also appointed a number of other executives with strong financial services backgrounds including Van Coller’s deputy Kholekile Ndamase, a former banker.

Van Coller says his job at MTN will be to develop new revenue streams on its mobile platforms. Digital is a small part of MTN’s overall business, so the company will have to find ways to leverage subscribers across the continent and the Middle East to gain more revenues.

Van Coller has worked on a number of telecommunications mergers and acquisitions, as well as capital raising during his 20year tenure in banking.

Changes in customer behaviour have forced banks to reconsider their services, which now have to be available anytime, anywhere, and accessible through multiple channels.

French telecoms operator Orange recently unveiled plans to create a mobile-only bank in partnership with Groupama Banque. Orange said the service would be fully mobile and would offer access to traditional banking services including savings, loans and insurance.

That type of venture may be a forward indicator of what SA’s industry can expect.

But Deloitte says traditional banks still have several competitive benefits. They have large and established customer bases, vast amounts of customer and transaction data and capabilities to enable payments, security and financing — all of which are difficult to reproduce for new and smaller entrants.

FNB Premier CEO Lynette Kloppers said in a research report released by the bank in June that traditional methods of banking are evolving fast. While banks have the banking expertise, clients are setting the pace and the bank follows them quite closely to ensure it understands their needs.

“Consumers now require services that are available around the clock and can be accessed from anywhere in the world,” she said.

This month Standard Bank announced that it is upgrading its entire core banking system in