Inside FNBB’s plan to stay ahead of the pack
Mbongeni Mguni | Tuesday November 1, 2022 09:24
Writing in the group’s annual report for 2022 recently, First National Bank Botswana (FNBB) chairperson, Balisi Bonyongo noted the trend of heightened competition in the banking sector from both direct rivals and non-traditional financial services.
Essentially, the pandemic saw banks and related financial services providers boost their provision of digital services, as the response to COVID-19 included movement restrictions, travel bans and social distancing, the latter limiting the traffic in brick and mortar banking halls.
The heightened competition was focussed on product offerings, with the more non-traditional banking players challenging the key mobile payments niche that FNBB has enjoyed in the market for years, mainly through its ewallet and cellphone banking solutions.
A prime example of this is that the paying of bills like utilities, Multichoice and others which was a key selling point for cellphone banking in previous years, is now possible across numerous competitors, including foreign exchange entities such as Mukuru.
“The increased adoption of digital banking and the rapid shift to remote working accelerated certain elements of our strategy, enabling the bank to survive the pandemic and to explore innovative new ways of serving customers,” Bonyongo noted.
“These disruptive trends opened up opportunities for traditional and non-traditional financial services providers to compete with incumbent banks, some attracting customers with unsustainable offers to gain market share.
“It also increased competition for talent as our competitors sought specialist banking skills and talent to achieve aggressive growth targets.”
According to the chairperson, the trends are expected to continue.
“Technology advances driving digital transformation will continue to pose risks and opportunities for the bank.
“Heightened competition is likely to remain a feature of Botswana’s financial services industry.”
At its core, the pandemic has resulted in increased competition for customers among banks and, more recently, the non-traditional financial services sector which includes the mobile money players and cryptocurrency industry.
Customers squeezed by the difficult economic climate are shopping around for not only the best rates, but add-on services that can make each of their hard-earned thebes stretch beyond simple transactional services.
FNBB, which burst into the local market 31 years ago and used technology innovation to surpass the two established titans it found already operating, appreciates that the gains of pioneering fintech do not guarantee continued market share.
“Competition for banking customers is increasing with non-traditional financial services providers, such as mobile network operators and fintechs, setting aggressive and public targets for gaining new market share,” bank officials noted in the annual report.
“They are closing the first-mover gap that FNBB enjoyed by introducing innovative new products rapidly, particularly in mobile payments.
“Customers are receptive to competitive offerings as disposable incomes are under increasing pressure and interest rates are rising.”
The bank’s take on trends in the market is backed up by actual developments announced by its industry rivals and the emerging non-traditional players. Nearly all the major banks in the country have stepped up their digital offerings and competing “ewallet-esque” solutions, fine-tuning their Internet banking products and boosting cross-platform connectivity. The country’s leading microlender, Letshego Holdings, meanwhile, is accelerating its transformation into a major digital financial services retailer in Africa, building up a registry of five million customers to become one of the continent’s biggest players in that type of fintech.
As the field closes the gap on FNBB, the bank has an ace up its sleeve in the race to remain the preferred choice for customers.
While for many observers, FNBB’s recent brand launch appears to have been about reworking its famous Acacia tree logo and introducing new features to its market-leading app, the revamp actually involves a group-wide transformation designed to keep it ahead of the chasing pack by better responding to customers’ evolving needs.
The idea is to help customers stretch their thebes or maximise the value of their funds beyond simple transactional services, by moving from being product-led to advice-led.
“The three decades we have been in Botswana has given FNBB insights into customers’ lifestyles and their ambitions and we have delivered contextual solutions that have elevated FNBB as more than a bank but an economic partner,” the bank’s director of marketing and communications, Peo Porogo told Mmegi.
“So as the nation grapples with the residual effects of the pandemic and other global events, we are always pushing and challenging ourselves to continue growing our digital prowess, enhancing our advisory services and pro-actively offering the help that our customers for an enhanced customer experience.”
While the uptake of banking services has been rising in the country in recent years, challenges such as financial literacy, lack of access to the Internet and sheer geographical remoteness have meant a section of the population remains either underserved or unserved.
The result has been that the increasing innovation, digitisation and competition among banks and related financial services has been focussed on the same pool of customers and within that, only certain income hierarchies have had the resources to access niche services such as advice.
According to Porogo, FNBB is extending its efforts to reach all corners of the market with both transactional services and the add-on solutions promised in the rebrand.
“Even in its digital banking offering, FNBB had already catered for those that have challenges to Internet access, starting with making the FNB App zero-rated which makes the FNB App accessible anytime, from anywhere even if the person does not have data,” she explained.
“We have also provisioned for our customers through our 649 CashPlus Agents countrywide as well as through our mobile bank, Bank on Wheels, which travels to areas where we don’t have physical structures to make banking convenient for our customers.”
She continued: “Our journey also redefines the traditional banking experience as we are now challenging ourselves to innovate and enhance the branch value propositions.
“We are able to focus more on offering advice to customers through the branch channels.
“We have opened up accessibility to banking services to under-represented groups through our alternative banking channels.
“We are positioning ourselves as a future-forward partner that not only has the digital prowess but an empathetic approach to empowering and facilitating sustainable growth for our customers and the market as a whole.”
Through its transformation, FNBB is banking on remaining the partner of choice for most Batswana, despite the increasing competition from the field.
Officials writing in the annual report make clear the bank’s approach to the trends in the market.
“As a market leader, FNBB has to continuously defend its market position and reputation. “Competition for banking customers is expected to increase as new competitors enter and gain traction in the Botswana financial services sector.
“The bank will continue protecting its market share by improving the service that we offer our customers.”
The winner, at the end of the day, will be the customer, a fact already seen by the Bank of Botswana whose recent Banking Supervision Report for 2021 found improved efficiencies, higher deposit rates for certain products and other positive indicators due to the competition.
“Banks continue to streamline internal processes by adopting electronic processing to improve the convenience of access to transactional banking services, indicating that digitalisation of banking processes has become key to the provision of financial services and an enabler of financial inclusion,” the central bank said.