We will all look back on 2020 as the year when digital platforms gained ever more increasing importance. This is of course because of the COVID-19 pandemic. A number of industries have had to shift the way they operate and one of the most critical is the banking sector. With EcoCash being hamstrung by regulations, the banks took an ever more increasing role in the financial sector. A few came up with some interesting products and innovations but none did it quite like FBC Bank.
So what made FBC standout or set itself from the rest and what problems did it solve?
Zimbabwe’s financial inclusion and freedom problem
The one thing we have harped on and on about here for the last few months is financial inclusion. Full KYC accounts are not easy to open, there is a litany of requirements and documents that a prospective client has to have in order to apply.
Worse still even if you have the documents you might live in an area where there are any physical branches. This usually means you will have to trek all the way to the nearest city or town where there is a branch in order to open an account.
The barriers that exist with bank accounts are among the reasons why mobile money took off in Zimbabwe. There are fewer requirements and the list of locations to open an EcoCash, OneMoney or Telecash wallet are far more numerous than bank branches.
The situation for the unbanked is made much worse because EcoCash (the most popular MMO) has been subject to restriction after restriction. The worst one was the ZWL$5000 a day limit that the RBZ mandate on all Mobile Money Operators (MMO).
If your primary financial service was a mobile money wallet then you were now in a difficult position. You now had to plan around a tight transaction limit which was insufficient to cover all the needs Zimbabweans have.
The public outcry that ensued forced the RBZ to relax the limit to ZWL$35 000 a week (ZWL$7 000 a day). This was an improvement but Zimbabweans on mobile money have far less financial freedom than those who have bank accounts.
How did FBC Bank address these problems?
As I am sure you are aware FBC launched a new service that allowed anyone to register and open a range of accounts from home. This service or platform isn’t new in Zimbabwe. Banks like Nedbank, CBZ, BancABC have online platforms to open bank accounts.
FBC’s offering, however, went even further than that. If you have internet and can download the FBC bank app, you can open an account through it. If you don’t have internet or want to save your data bundle, you can open an account via the bank’s *220# USSD.
The addition of the USSD platform was the one thing that pushed FBC over the edge when it comes to addressing financial inclusion. Anyone with any cellular device can open an account and start transacting as soon as they are done with the application process.
I opened an FBC local currency account via USSD when the service launched. I got a confirmation message, my account number and I could move money into the account after that. The only hiccup is that you will have to go and collect your card at FBC, but other than you’ll be good to go.
FBC could, however, improve the service by offering a delivery option like what BancABC does with its prepaid VISA card. If not a delivery option then they could mail you the card and you can pick it up in the post.
Mailing the card will have to be done with more security features to the packaging. A lot can happen while the card is in transit or waiting to be collected.
ZIPIT Smart and FBC Bank
The traditional financial institutions were losing relevance in the sector because of EcoCash and other mobile money operators. This problem was something that the folks at ZimSwitch were looking to address.
The only way of doing that was to give people access to their funds in their bank accounts but with a payment process that had an experience similar to mobile money.
The solution they came up with was ZIPIT Smart. The payments solution uses the funds in your bank account but the platform is modelled around what we are used to with EcoCash, OneMoney and Telecash.
One major plus about ZIPIT Smart is that it is not subject to the restrictions that EcoCash or KYC lite accounts have. If your bank is among those that have finished the onboarding process you can pay for goods and services at a ZIPIT Smart merchant. ZIPIT Smart also has a sense of familiarity to it because the merchant codes are similar to those that EcoCash uses.
So… How does FBC Bank figure into all of this?
Well, last week the bank announced that it was done with the integration process and its customer could now pay merchants and bills using ZIPIT Smart. FBC isn’t the only bank to do this though, NMB is another early adopter with the service up and running.
Why this is important in FBC’s case is because the combination of the USSD/Bank app account application and ZIPIT Smart give potential and existing customers a way around the mobile money restrictions. You can transact as you would with your bank account without transaction limits. As well as enjoy the familiar mobile money experience with ZIPIT Smart.
The only drawback at present is the number of ZIPIT Smart merchants registered. There are a few around but not enough yet. That being said the service’s reach is still growing and who knows what 2021 holds.
Going into the new year FBC, for the reasons mentioned above, has positioned itself very well and is why it is our bank of the year.
There are two banks that made it on our honourable mentions list. The first is BancABC and the other (this might surprise some of you) is Stanbic Bank.
Like all banks, BancABC leapt on the shift to digital that was necessitated by the COVID-19 pandemic. The bank launched Branch X earlier this year and they added on to that by launching their Dial-A-Visa service.
Later on in the year, BancABC launched a domestic remittance service “City Hopper“, which offered anyone a favourable 2% fee to send money anywhere in Zimbabwe.
As mentioned earlier this might be a surprise to some of you because we haven’t been particularly convinced by Stanbic’s efforts this year. This all however changed when the bank announced that it was going to zero-rate all of its banking platforms.
This is a major coup for them because this means their Slydepay QR Code payments solution now has a decent shot. Stanbic bank zero-rating its apps will cause a ripple effect in the sector and it wouldn’t be surprising to see more banks do the same.