Business Unusual

A bank that is always open but has no doors

Back in 2001, before Facebook was even a dorm room experiment, there was a bank called 20Twenty. It was an online bank that worked via Saambou Bank.

In just 6 months it had 40 000 people signed up promising great customer service and no need to visit a bank branch to manage their accounts.

Websites were basic back then and phones were nothing like they are today. So a direct bank was certainly a major innovation. Unfortunately Saambou collapsed in 2002 which threatened to end 20Twenty. It remained in limbo until 2004 when it was bought by Standard & Chartered. However, it turned out they did not really want the direct bank and by the end of 2005 it was gone.

Direct banking as it is known is the process of creating banking services that exclude a branch network. The first in the US in 1995 used a call centre to take instructions and carry out bank transactions.

It was only in 2014 that mobile banking became more popular that banking via a branch in the US.

App based banking will use new ways to verify who you are making fraud more difficult.

The first digital only banks appeared on Germany in 2009. They were stand alone and not backed by a traditional bank. Fidor goes even further by making the banking process a social one offering bank clients the opportunity to interact, compare or even offer or get loans from other clients

Many regular banks have seen the shift and have created online direct banking services aimed at younger more web and mobile savvy savers.

Despite being a finance hub the UK will see their first digital only bank open for business this month. Atom has no branches and is not backed by an existing bank. It operates only via mobile and web services. You can message and call them, but you can’t visit. Hot on its heels is Tandem the second digital only bank to be given a licence in the UK.

In Canada, EQ Bank is hoping to reach a more mobile-focused customer.

The shift is a significant one. Historically the more impressive the bank branch the greater the customer's faith in the security of the business. Now that same sense is more likely to be determined by the customer service responsiveness and the quality of the app or website.

The challenge to financial services is also no longer only from other banks. Technology companies like Google, Apple and Samsung have all built options to make transactions easier for those using their products and social networks like Facebook and WeChat have also offered their users the opportunity to do payment transactions via their platforms.

There are also physical payment options like Square which allows you to swipe a payment card via a phone and services like SnapScan which turns your phone camera into a credit card. One of the original online payment options was PayPal which provided the most convenient way to pay securely online using credit or debit cards.

There are also platforms for helping you manage your accounts and funds, by running analytics to help you save or invest or simply let you see how much you are spending on a particular item like eating out or fuel. 22Seven is one such option to try although some might still hesitate as you are required to enter your banking passwords.

Users are now able to access and transact without needing to worry about banking hours or needing to visit a bank.

For the banking industry it offers both a massive potential disruption with new online only businesses offering services at lower costs and with more convenience. However, as the demand for actual branches drops, traditional banks can drive significant savings to their operations.

The shift to more electronic and mobile banking also allows businesses to offer payment services and potentially more. So there will continue to be a blurring of banking channels offering retail options and non-traditional retail and technology channels offering payment and banking services.

A final element that will grow from the massive data collection and processing online will be smarter use of purchasing behaviour to both assist consumers avoid bad spending as well as to assist marketers better tailor their sales pitches. It will also allow institutions to better understand economic shifts happening sooner and more accurately.

It may even lead to improvements for tax revenue management and close loopholes that have allowed tax havens to be abused.

Read More
Humans will be returning to the moon, but how will they be fed?

Humans will be returning to the moon, but how will they be fed?

The space race has typically focused on the massive rockets needed to get there, now we need to ensure there is enough to eat.

Defining the Earth we hope to see in 2050

Defining the Earth we hope to see in 2050

Asking what the world will look like in 30 years allows us to start doing what is needed to achieve it.

Bitcoin, Uber and GoPro - how the mighty are challenged - Part 3

Bitcoin, Uber and GoPro - how the mighty are challenged - Part 3

Becoming a world disrupting new technology is not the end of the journey, it may not even be the hardest part.

Bitcoin, Uber and GoPro - how the mighty are challenged - Part 2

Bitcoin, Uber and GoPro - how the mighty are challenged - Part 2

Becoming a world disrupting new technology is not the end of the journey, it may not even be the hardest part.

Bitcoin, Uber and GoPro - how the mighty are challenged - Part 1

Bitcoin, Uber and GoPro - how the mighty are challenged - Part 1

Becoming a world disrupting new technology is not the end of the journey, it may not even be the hardest part.

Are retail shops only going to get smaller now?

Are retail shops only going to get smaller now?

How advances in online retail and delivery options will begin to change the size and nature of physical shops.

Popular articles
Getting to know MP, Dr Makhosi Khoza

Getting to know MP, Dr Makhosi Khoza

Dr Khoza is admired by South Africans for her role in the SABC inquiry as a ANC member of parliament.

Africa Melane reviews 'Get Out'

Africa Melane reviews 'Get Out'

Get Out is a darkly satirical horror film about racism that has become a cultural phenomenon in the United States.

Naked Scientist reveals the real cure for a hangover (and its not hot wings!)

Naked Scientist reveals the real cure for a hangover (and its not hot wings!)

Dr Chris Smith gives insights on what peaks your interest.

Sars sitting on R20 billion in VAT refunds

Sars sitting on R20 billion in VAT refunds

CEO of the Office of the Tax Ombudsman Advocate Eric Mkhawane says payments will be done on a case by case basis.

Afrikaans-speaking student res adamant "not exclusive"

Afrikaans-speaking student res adamant "not exclusive"

De Goede Hoop Koshuis coordinator insists this is not an 'apartheid' hostel and everyone is welcome if they meet the requirements.

No escaping the tax man even if you work outside SA

No escaping the tax man even if you work outside SA

Government is intending to change the way foreign income is taxed by introducing taxes to a large South African diaspora.

Workplace bullying is as real as in school playgrounds

Workplace bullying is as real as in school playgrounds

One in six people fall victim to an office bully.

Is Uber dying? Stuff’s editor explains…

Is Uber dying? Stuff’s editor explains…

High ranking employees are resigning en masse as crisis upon crisis pummel lossmaking Uber.

Spur CEO: Man's pic will be up at restaurants and he is not welcome

Spur CEO: Man's pic will be up at restaurants and he is not welcome

Spur CEO says staff aren't equipped for this kind of customer confrontation and he will consider reviewing their training manual.