Standard Bank and SAP Team Up to Expand Banking to Millions in South Africa

What do you get when you combine mobile banking and that pretty plastic blue Visa card? Accessible banking to millions of Africans, a game changer in consumer banking and an innovative approach to CSR in emerging markets. In South Africa, Standard Bank has revolutionized financial services with AccessBanking, a new way to save and spend money that runs on one of SAP’s new banking software platforms.

Standard Bank’s AccessBanking is a big step forward for personal finance in South Africa. Currently as much as 33 percent of the country’s population is does not have access to banks. Many South Africans who have a bank account but live in the townships that are located in the far outskirts of South Africa’s largest cities are as far as 25 to 40 miles away from the nearest branch. But with an ID card and a cell phone, Standard Bank can offer access to cash at thousands of sites in South Africa, provide jobs to the unemployed and help merchants expand their business.

So how does AccessBanking work?

Standard Bank’s employees and “AccessAgents” pitch promotional tents across South Africa or local corner stores (called “spaza shops” in South Africa) or malls in townships and smaller cities across the country. Signing for an account is easy: all a customer needs is identification and proof of residence. Then the AccessAgent fills out a brief form, sets up a transactional or savings account and demonstrates how to use the service. The process generally takes fewer than 10 minutes and has been done in as fast as two minutes. Customers are definitely excited over this service: during our visit yesterday to Tembisa, a township outside of Johannesburg, the queues to sign up at two locations to which we paid a visit were long.

But this is not mobile banking--the card does not go away. Upon signup, the customer receives a blue Standard Charter debit card with the famous credit card symbol plunked in a corner. According to Audrey Mothupi, Head of South Africa’s Inclusive Banking, South Africans aspire for a rectangular debit card similar to what the richer citizens in their country enjoy. Upon receiving the card, customers can walk into over 7,000 “AccessPoints” in South Africa and deposit or withdraw cash, check their balances, transfer money and buy prepaid electricity or mobile telephone airtime.

According to Standard Bank, about 90,000 new accounts open monthly, adding to the 3.5 million customers the bank migrated from older legacy accounts. In turn, these customers benefit from a seamless way to manage their money instead of hiding it in a mattress or making a long trip to the nearest bank branch. They benefit from a safe and secure banking system that allows them to deposit even the smallest amounts of money close to their home. Standard Bank only charges a fee if the customer uses an ATM or completes a transaction with one of the bank’s branches. At an AccessPoint, however, no transaction is too small: “That hairdresser who made a quick R200 (1 rand is about $0.10) can run into the store and deposit her money safely,” said Mothupi. And every single transaction is followed up with a quick SMS message.

Merchants also benefit from AccessBanking. Based on the level of activity they generate in their stores, a store owner can gain anywhere from an extra $200 to $800 in revenues monthly. They also become affiliated with a brand many South Africans once viewed as out of reach or in Mothupi’s words, “even foreign.” Plus, consumers who walk into one of these AccessPoints will likely walk out with a few products purchased at the same location.

The AccessAgents, upon completing a comprehensive training program, have what is hard to come by for many in South Africa and elsewhere in the region: a job. Currently 1,000 of these agents work across the country and Standard Bank plans on hiring more. Standard Bank not only pays agents for every account they set up, but for each new account that is actually activated. Such an extra step is important, Mothupi explained, because the extra effort helps convince customers to use this service often. And they do: over 2.3 million transactions worth R460 million (about $46 million) are completed monthly.

For Standard Bank, AccessBanking is about providing a much needed service and helping strengthen South Africa’s economy for everyone. “It’s about building new ecosystems,” Mothupi said, and similar revolutionary systems are underway. Spaza shop owners are now gaining access to a similar system, changing the way they stock their stores. They used to have to make an overnight trip to a warehouse store, which is both a huge waste of time and inefficient because it is difficult to gauge what kind of products, and how many, they can sell in the next several days. But now some merchants are testing a system where the same warehouse store can proactively message them and give them an estimate of how many various food and drink products they need--plus deliver them quickly.

If corporate social responsibility is about using a company’s expertise to better society, then Standard Bank and SAP’s partnership is one off to an exciting start.

Image credit: Steward Masweneng/Unsplash