Now the man who was responsible for turning FNB into one of the world’s most innovative banks – former CEO Michael Jordaan – is bringing South Africa its first online-only bank. The app-based bank, called Bank Zero, is due to be launched towards the end of this year.
Founded by tech entrepreneur Michael Jordaan and banking innovator Yatin Narsai, Bank Zero will offer a fresh approach to banking without any legacy systems which can be costly to maintain, they said when announcing the bank. “Businesses, individuals, families and communities will benefit through Bank Zero’s products and services which are in tune with modern day realities,” they said.
“Facebook, WhatsApp, Twitter and Instagram are the new normal for societies. Why shouldn’t banks also innovate in this era of wider connectedness whilst still ensuring a robust banking value proposition? Bank Zero is addressing these realities, while employing cutting-edge technologies, minimising typical admin-intensive processes and delivering state-of-the-art security.”
There have been online-only banks in Europe for many years, but South Africans have remained stuck with more traditional institutions. Bank Zero looks set to not only change that, but to disrupt the entire industry.
Bank Zero will make use of a mutual bank licence. The mutual banking concept allows for the support and creation of financial communities, providing for a capital-efficient framework. Bank Zero will be sharing the subsequent cost benefits with its customers, according to Jordaan. Everything will be electronic, he adds, everything from signing up as a customer to doing things that normally need signatures and paper work.
A mutual bank aims to encourage savings by providing benefits to its depositors, creating a safe place to deposit money and offering benefits such as interest on deposits and dividends on mutual bank shares, as well as investing conservatively for the purpose of generating profits. When someone deposits funds in a mutual bank, they essentially buy an ownership stake in the bank and are entitled to vote at shareholder and member meetings.
“Bank Zero is part of the new frontier of banking which has arrived through smartphones and associated digital technologies. Beyond the mobile technology revolution, other innovations will bring more financial transparency and control to our customers in an intuitive, secure and affordable way,” Narsai says.
When it launches, Bank Zero will become South Africa’s fourth mutual bank, joining Discovery Bank, TYME and Post Bank as the first new banks in the country in more than a decade. With South Africa’s banks having lacklustre customer sentiment at best, this new bank looks set to make banking a little more customer friendly – not to mention cheaper.
Image credit: Copyright: ndul / 123RF Stock Photo