The South African banking sector continues to go through remarkable evolution due to its competitive nature and rising consumer expectations.

Chief Executive of FNB Retail, Raj Makanjee says financial pressure on households is one of several factors that is increasing the expectations of banking consumers. He says, currently, national data sources show that households are battling to keep up with the escalating cost of living.

One of the reports that reflect rising pressure on consumers is the Credit Bureau Monitor of September 2019. The report shows that the number of consumers who have an impaired credit record rose to 10.8 million. Consequently, consumers classified in good standing decreased by 527,189 to 14.35 million by September 2019.

“This essentially means, in this decade, the biggest challenge for financial institutions will be to help customers improve the management of finances. We are already on this journey as FNB, demonstrated through solutions like nav>>Money which helps customers track their spend, credit status and savings goals. In addition, we’ve been consistently rewarding customers with approximately R2 billion worth of eBucks annually while helping many save on telco through free FNB Connect data and voice benefits. Increasingly, we see even more customers relying on our eBucks programme and other free benefits to keep their head above water,” says Makanjee.

He says to effectively align with the expectations of consumers, banks have to deliver in key areas, including the following:

Tech and human experience – smart technology will continue to be front and centre in delivering financial solutions to banking customers, however human interaction remains key to building trustworthy customer relationships. In our Retail banking environment, our customers continue to appreciate human intervention when making important financial decisions and transactions.

Meaningful rewards – rewards can be an important buffer for customers, especially in times of financial difficulty. We see this with our award winning eBucks rewards programme which provides timely financial relief to customers who bank with FNB and RMB Private Bank. Increasingly, we are also giving customers tips on how to save by utilising eBucks effectively to stretch their budgets.

Choosing the right bank account – Financial institutions have a duty to help customers select the right bank account for their needs. This will enable each customer to extract maximum value from their banking and avoid the potential of accumulating costs when transacting. It’s not enough to simply offer customers a black card without any value of rewards and meaningful lifestyle benefits.

Credit selection and advice – consumers who need credit do not always select the right credit product for their needs and many often choose expensive forms of credit despite their good credit record. Financial institutions should be able to offer customers the right credit solution depending on the customer’s credit profile, needs and relationship with the bank. We have already implemented this for FNB customers to get individualised credit, savings and insurance offers.

Unlock saving potential – A consolidated view of customers’ financial commitment can reveal a lot about one’s potential to save. Our Retail customer data shows that most middle-income consumers can still save by making simple changes in how they manage their money. In this case, we are able to start a conversation with customers we believe should be making an effort to save for their future.

“Despite the recent decrease in interest rates, households are likely to remain under relative economic pressure due to our country’s restrained economic growth. Banks should make a deliberate effort to understand customers better and in turn, customers have a responsibility to budget properly and be disciplined about managing their money,” says Makanjee.