Sentiment around South Africa’s economic future may be somewhat dubious and uncertain, but the country offers a myriad of opportunities for innovation and resourcefulness, writes By Capitec CEO, Gerrie Fourie, who believes in the potential that South Africa holds for individuals and businesses who are able to reach beyond the nation’s challenges and identify the gaps that exist for progress.
Fourie discussed these opportunities during PSG’s latest Think Big Series webinar – a collection of dialogues with high-profile personalities that address burning issues. The series aims to provide South Africans with key insights from thought leaders in an effort to shed light on current affairs and inspire in a time of unprecedented instability.
“I am a strong believer in looking for opportunities. You can go to Switzerland where everything works but there are no opportunities, or work within the South African market where not everything works but there are lots of opportunities,” said Fourie.
He also reflected on some of the fundamental points of differentiation that Capitec used to win its substantial market share and provided his outlook for the future of the South African banking sector.
Having joined the bank in 2000 as Head of Operations, Fourie was among the founding contingent. Today, he is the CEO of Capitec – the third largest bank in the country – despite its traditional counterparts having had a 100-year head start.
When discussing the outlook for the local banking sector, he confirms that the future of banking is cashless. “Capitec invests largely in travel and collecting insights from around the world. We’ve seen the extensive use of QR codes and blockchain technology coming to the fore as the new future of the payments sector. In South Africa, we need to leapfrog from a cash-based way of operating to more digitised methods.”
Don’t follow the crowd…
When asked about how aspiring bankers and innovators can steer the future of banking, Fourie is a big proponent of not “following the crowd,” which is a big part of what makes any new player in the banking industry stand out. He says that the key is not to copy and paste what competitors are doing but to focus on what clients want and need, then find the competitive gap and build a product offering around those factors. “Differentiation and innovation are essentially at the heart of what industry disruption is and together, these two principles present a substantial opportunity for the sector.”
Another opportunity that tomorrow’s bankers can leverage is the unparalleled level of measurability that exists due to advancements in technology and the advent of big data. This is a factor that Capitec continues to leverage as it expands its product offering. But at the heart of its operations is an understanding and appreciation of the fact that human connection is irreplaceable, and the future of banking rests on the harmonious hybrid of technology and human ingenuity. Capitec’s people-first philosophy – both externally and internally – is central to the way it does business: “You don’t learn by giving a committee the responsibility for making tough decisions, you learn by being immersed in the problem, dedicated to finding a solution and applying a trial-and-error approach.”
In the near future, Capitec will be setting its sights on the informal business sector where there are opportunities to serve the underserved. “Mercantile banking is something we’re very excited about,” says Fourie.
Finding opportunity is a long-time theme for the bank. Looking back at the early days, Capitec set itself apart in the market by ‘banking the unbanked.’ “Our entry strategy and the way we tackled the established banks was to set our sights on the areas that weren’t being serviced. We started in the rural areas, where no-one expected a new bank to start. Nobody paid attention to us in the beginning, so we began the first phase of our development out of sight in a sense. We gradually moved into urban areas and today, we’re proud to say that we can serve 95% of South Africans. Our goal was always to build a bank that could serve every type of South African because we didn’t believe in the private banking system. We answered a need in a practical way.”
Similarly, another gap identified was the industry’s banking hours. “We thought of ourselves more as retailers than as bankers. Therefore, we found no reason to open later than 8AM and close earlier than 5PM. We challenged the private banking system that services a select few and developed strategies to serve everyday South Africans with their unique lifestyles and needs,” Fourie says.
Those who are familiar with Capitec’s brand messaging will know that “simplicity” is one of the bank’s cornerstones. Fourie explains that it is in fact one of four fundamental propositions upon which Capitec was founded, namely: “affordability, accessibility, simplicity and service.” Its founding members shared a mutual disdain for the asterix – a punctuation mark that has come to characterise endless and complex terms and conditions. The bank of the future breaks through this complexity and is, as he describes – “simple at the front but complex at the back.”
PSG Assistant Fund Manager, Mikhail Motala concluded: “The insights we gleaned from Gerrie Fourie were invaluable. By looking at Capitec as a case study, we have glimpsed what the future holds for banking. This is what we hope to keep achieving through the Think Big Series – we aim to share insights that attendees can use to form their own opinions on some of South Africa’s most pressing issues.”