Bank Zero ready to rock ’n roll in a ‘matter of weeks’
The newest competitor believes its value proposition will be most felt in business banking
The arrival of the newest competitor to the banking industry is likely to come in a matter of weeks, not months, owing to the “sheer severity” of the second wave of the Covid-19 pandemic, according to its CEO.
“June is on the late side — I am eager to get going much sooner, but I need my core team back in the office,” said Bank Zero CEO Yatin Narsai.
This follows an article in ITWeb last week indicating that Bank Zero would delay its launch — which was scheduled for the end of 2020 — to possibly as late as June.
In an interview with Business Day on Monday, Narsai said June’s targeted date was conservative and it would more likely be just a matter of weeks before it is all systems go for the digital mutual bank cofounded by former FNB CEO Michael Jordaan.
Narsai confirmed that the pricing structure released in 2020 for both the retail and business offering would remain unchanged in 2021. In a big innovation that will sharpen competition in the industry, Bank Zero makes no distinction in pricing for individuals or businesses for core transactional banking.
It has identified the biggest opportunity in business banking where the economics of operating a digital bank can be passed on to business owners operating sole proprietorships, close corporations and private small and medium-sized enterprises.
The sheer cost savings and improvements in functionality we can offer is in business banking, so that is where we see the biggest opportunity
“The sheer cost savings and improvements in functionality we can offer is in business banking, so that is where we see the biggest opportunity. For example, banks struggle around the world to implement payment mandate functionality. We think the process is very clumsy and cluttered and comes at a huge cost,” said Narsai.
The initial offering will comprise transactional banking, savings and notice deposit accounts. There are no plans to launch lending products, and if done at all in the future, this would probably be offered with the help of a partner.
“We think the opportunity is in originating business loans and personal loans, but that will only happen later,” said Narsai.
A digital marketplace is also on the cards, and will be used as a way of introducing third-party partners for a range of services.
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