Zero Bank, which has been granted a provisional banking licence by the SA Reserve Bank, said yesterday that it was expecting to launch in the fourth quarter of 2018 after a rigorous in-depth evaluation process by the central bank.
Zero Bank chairperson Michael Jordaan said businesses, individuals, families and communities would benefit through Zero Bank’s products and services, which are in tune with modern-day realities.
“Facebook, WhatsApp, Twitter and Instagram are the new normal for societies. Why shouldn’t banks also innovate in this era of wider connectedness while still ensuring a robust banking value proposition? Zero Bank is addressing these realities, while employing cutting-edge technologies, minimising typical admin-intensive processes and delivering state-of-the-art security,” Jordaan said.
The Reserve Bank has already given provisional licences to Tyme, backed by billionaire Patrice Motsepe, insurance giant Discovery and the SA Post Office, which are all set to enter the competitive banking environment this year.
Zero Bank is 45percent black owned. Banks have been under increasing criticism for being white-dominated and not meeting South Africa’s transformation agenda.
Nesan Nair, a senior portfolio manager at Sasfin Securities, said the banking business model was going to be threatened by these financial technology companies, but he was expecting that they would match the technological changes.
“Those that do not will become less appealing for clients, particularly to the younger ones,” Nair said.
The whole banking sector is expected to improve in 2018 provided the country gets the economy on a sound footing.
On the day Zero Bank announced its arrival into the banking scene, local banking stocks traded higher with Standard Bank almost up by more than 4percent, Nedbank up by 3.37percent, Capitec Bank slightly up by 1.54percent, FirstRand up by 2.65percent. Barclays Africa was the only share that traded in negative territory, down by 0.48percent in the afternoon.
The upward trend is expected to continue for the rest of the year in the sector. Wayne McCurrie, a fund manager at Ashburton Investments, said Zero Bank could over time be competitive, but possibly only in the medium term. “To be truly competitive, including Discovery, Tyme etc, you need massive capital which takes time to accumulate,” McCurrie said.
For the year ahead, he said 2018 should be quite good for banks.
- BUSINESS REPORT