In South Africa, as around the world, banking and insurance face disruption. In Europe and the United States, it is underway. The arrival of digital banking entrants such as Germany-based N26, and UK-based Monzo and Revolut, has struck a chord: N26 has 3.5 million customers,1 Monzo about 2.2 million,2 and Revolut more than 3.5 million.3 On the insurance front, US-based firm Lemonade was recently valued at $2 billion ahead of its expansion into Germany.4
In South Africa, we’ve already seen the introduction of two digital banking entrants in 2019: TymeBank and Discovery Bank. Bank Zero is another whose launch is expected imminently.5
These successes point to a global shift in consumer behaviour and expectations, a change that is being driven by advanced data analysis that can provide customers with a better service and a better experience, often at a lower price.
Personal data is a key battleground. Our research shows consumers are very willing to share this with banks and insurers, but in return they want much more value.
South Africans are also far more interested in integrated propositions than their global peers and are more willing to pay for them.
And while three-quarters want their bank to blend physical and digital channels, most also value being able to switch to face-to-face engagement for more complex requirements.
South African financial services firms hold an ace: They enjoy a significant trust advantage over potential competitors like retailers and social media companies, which they can use to deliver valuable services in digital ecosystems.
That said, banks and insurers must go further and do more than just digitise existing offerings. One-off transformation, “edge-only” innovation and fast-followership are insufficient. Change must be perpetual to be responsive to perpetually changing client needs.