Capitec is banking on global trends for client-centric innovation

By Blessing Mgaga, Divisional Executive: Client Experience Delivery (Retail) at Capitec Bank

I recently had the opportunity to visit India and Singapore, two countries at the forefront of the digital revolution in finance. The insights from this trip have reinforced and expanded our vision for Capitec's role in shaping the future of banking in South Africa, painting a picture of how the banking sector is undergoing a profound digital transformation.

Deciphering South Africa’s digital banking landscape

According to the Digital 2024 Global Overview Report , just over 50% of South Africans do their banking, investment, or insurance activities through a website or an app, which is well over the global average of 26.6%. This finding reflects how South Africans increasingly seek convenient and effective ways to manage their finances in today's fast-paced digital world.

They want a banking partner that understands their unique financial challenges and provides them with the tools to take control of their financial well-being. Capitec realises that leveraging global insights and banking innovations will allow us to offer more than seamless banking experiences but also empower our clients with the tools and insights they need to navigate financial challenges and adopt healthier habits.

Digital transformation lessons from India

India's journey towards becoming a digital-first economy offers countless valuable lessons for the banking sector worldwide. The country's digital transformation approach has been holistic, involving collaboration between the government and private sector to create an ecosystem that enables digital innovation at scale.

One of the key drivers of India's digital revolution has been the government's proactive role in creating foundational digital infrastructure. The Indian government has introduced Aadhaar , a unique digital identity for every citizen, which has enabled widespread digital onboarding and KYC processes.

The government has also rolled out a Unified Payments Interface (UPI) to revolutionise digital payments by allowing seamless interoperability between banks and fintech companies. These initiatives have increased digital payment adoption, with estimates suggesting that 80-90% of transactions in India are now conducted digitally.

The Reliance Jio story is an example of private-sector innovation

In addition to government-backed digital solutions, the case of Reliance Jio , a major Indian telecommunications company that’s revolutionised India's digital landscape, illustrates how private-sector innovation can accelerate digital adoption on a massive scale. For example:

• Infrastructure investment: Jio invested $40 billion in building 4G and 5G infrastructure across India, dramatically reducing data costs from over $30 per GB to just a few cents in seven years.
• Ecosystem approach: Beyond telecommunications, Jio expanded into related areas such as device manufacturing, content streaming, and financial services, creating a comprehensive digital ecosystem.
• Partnerships and acquisitions: To overcome challenges, Jio wasn't afraid to acquire companies in parallel markets or form strategic partnerships.

This approach has resulted in Jio acquiring over 430 million subscribers in just seven years, showcasing the power of a holistic digital strategy.

Learning from Singapore’s approach to balancing innovation and sustainability

Despite being a city-state of just under six million people, Singapore offers a different but equally valuable perspective on digital banking innovation. The city-state has positioned itself as a global hub for business and innovation, attracting international investments and talent.

There's also a conscious effort to balance technological advancement with environmental sustainability, with the Singaporean government working closely with the private sector to drive innovation while maintaining regulatory oversight. Drawing from these global insights, Capitec is evolving its approach to digital banking to promote healthier financial behaviour by:

1. Developing tailored digital solutions

The lessons we’ve learnt from India and Singapore have reinforced our commitment to empathetic digital solutions and sustainable innovation at Capitec. We've learnt that true digital transformation goes beyond mere technological advancements; it requires a deep understanding of what our clients need and a commitment to social responsibility.

An example of a digital solution tailored to a client's needs is the Capitec banking app’s “Track Your Spend” feature. This innovative tool automatically categorises transactions in real time, giving clients an instant and transparent view of their spending across different categories such as food, transport, and communication. Clients can manually tag transactions for further clarity and control over spending habits.

At the end of each month, we provide clients with a categorised summary of their spending. Beyond the visibility, this retrospective view allows them to reflect on their spending habits and identify areas where they may need to cut back, pay off debt, make necessary budget adjustments to save more or spend extra on things they enjoy. It's about building trust and transparency between us and our clients.

2. Meeting clients on their platform of choice

Drawing inspiration from India's inclusive digital ecosystem and Singapore's balanced approach to progress, we're focusing on creating digital banking solutions that solve problems efficiently with genuine empathy for our clients' unique situations. This means developing intuitive interfaces, providing personalised financial insights, and offering proactive support during challenging times.

For example, Capitec's WhatsApp chatbot solution, MoneyUp Chat , delivers engaging financial education content through the popular messaging app, reaching clients on a platform they already use frequently.

The future of banking is personal, empathetic, and seamlessly digital

We envision banking becoming increasingly personalised and seamlessly integrated into our clients' daily lives. Where a banking app can manage your finances, understand your personal goals, anticipate your needs, and proactively offer solutions.

The journey towards this future of banking is exciting, and we invite all South Africans to join us as we work to make banking more accessible, personal, and empowering than ever before.