Traditional banks tap into the lifestyle market after digital disruption
As new digital banks disrupt a rapidly shrinking market, the more traditional banks are turning to the lifestyle market to increase their value proposition and claw back market share.
New market entrants in the banking sector include TymeBank, which has garnered more than 4.5 million customers since its launch just three years ago in February 2019, and the innovative Bank Zero, headed by former FNB chief executive Michael Jordaan. Bank Zero offers both individual and business clients zero fees on transactions and zero monthly fees.
However, you will pay R2 for till point withdrawals at Spar, Checkers and Pick n Pay and R9 per R1,000 when you make a withdrawal from an ATM. To keep costs low, Bank Zero is fully digital, with no physical branches or ATM network.
Spot Money, which is an open banking service originating from the old Virgin Money, also offers zero monthly and transaction fees.
FNB, part of the second-biggest banking group in the country (FirstRand), this week launched its lifestyle banking options – a comprehensive range of new lifestyle solutions and partnerships that are designed to help you beyond financial services. The new lifestyle solutions include:
- A weekly complimentary coffee or hot beverage up to R37 at Starbucks: You can access this benefit by doing five FNB Pay (including Apple Pay/Samsung Pay/FitBit Pay/Garmin Pay) or Virtual Card transactions weekly. You can access your complimentary voucher by using the FNB app when you go to Starbucks. The complimentary coffee will be valid for two weeks, so it’s use it or lose it.
- Roughly 400 online Udemy courses: You pay a once-off R50 activation fee per course, and you can access courses from financial management to coding, design and basic accounting. You are limited to six courses per year.
- Armed response and access to medical emergency services with the tap of a panic button: FNB has partnered with GuardMe, an emergency response app powered by Aura, a 24-hour personal security service. Once you register, you can access armed response services in your area.
A service that has already been successfully operating nationally for roughly three years, GuardMe includes 250 armed response service providers, 2,500 armed response vehicles and more than 5,000 armed response personnel.
You can also use the FNB App to activate a distress panic button in an emergency, without logging in. This service is free for the first three months and thereafter costs R19.90 per month per user. You can sign up additional family members and friends as they choose.
- Ad-free games with no monthly subscription that you can pay for with eBucks: There are no monthly subscription fees and a large selection of both free and paid games. You can play alone or challenge other players to tournaments, with prizes worth up to R250,000 in the form of the latest gaming consoles, airline tickets and vouchers.
- Access affordable high-end smartphones, laptops and iPads: FNB Connect is now offering “Hero Deals” where you can access 24-month deals on smart devices across the Samsung, Lenovo and Apple brands. Heloise Hobson, head of client experience at eBucks, says the total 24-month cost will still be cheaper than purchasing the same device at a retail store’s cash price and will include monthly data, airtime and SMSes.
Examples of the deals available include:
Jacques Celliers, chief executive of FNB, says the bank is shifting into high gear to offer customers exponential help.
“As South Africa’s largest provider of transactional banking services, we are acutely aware of the areas where our customers spend the majority of their money. As a result, our new solutions and partnerships are informed by a combination of our big data and analytical capabilities, which enables us to meet our customers’ needs.
“By providing integrated solutions and low-cost devices for accessing education, security, entertainment and staying connected, we help customers manage their money and lifestyles more effectively. We continue to expand our solutions beyond financial services, building on the success of lifestyle offerings such as nav», fuel rewards and eBucks Travel, as well as FNB Connect,” says Raj Makanjee, FNB retail chief executive.
In the last month, Discovery Bank launched Vitality Travel, a fully integrated travel booking service offering discounts and simplified trip management.
“The comprehensive travel offering is the world’s first shared-value travel platform which channels behavioural savings into the greatest possible savings on flights, holiday accommodation, car hire and holiday packages,” says Hylton Kallner, chief executive of Discovery Bank.
The Vitality Travel platform allows you to easily compare travel prices across the market and access discounts from a wide range of travel partners. The catch is that you have to be a member of Discovery Bank.
The FNB Lifestyle Solutions, on the other hand, are being thrown open to the wider public, although the hope is, of course, to see clients either switching to FNB or entering the banked market through its offerings.
Vitality Travel’s local partners include FlySafair, Airlink, Lift and Kulula, with international partners including British Airways, Emirates and Qantas.
As with most Discovery offerings, it is largely incestuous and you have to buy into the Discovery network of offerings to boost your discounts. The more enmeshed you are, the higher the discount. Travel rewards are based on engagement in Vitality programmes, Discovery products and monthly qualifying card spend.
Dinesh Govender, chief executive of Discovery Vitality, says travel rewards are among the most popular benefits, with Vitality members booking nearly 1.5 million flights a year. BM/DM