Like most of South Africa’s big banks, Nedbank is on a mission to reform and re-engineer its IT system, using it to attract new business, cut costs and roll out new services.
The Johannesburg-based bank long ago decided to avoid either a ‘big bang’ approach to remaking its digital systems or a more opportunistic ‘patching’ process. The former is often costly and assumes technology develops in a straight line. The latter makes short-term financial sense but leaves the business owner bereft of a consistent digital strategy.
Instead, Nedbank favoured a managed evolution programme – rationalizing, standardizing and simplifying its core banking system to increase inter-bank agility and to reduce complexity and maintenance costs. It reckons it has managed to digitize eight out of 10 customer journeys and more than 140 services across its network.
The data suggest it has worked. Nedbank says the approach resulted directly in a 104% year-on-year jump in digital sales in 2022, beating expectations. Last year, the number of digitally active retail banking clients in South Africa jumped 68%, with digital retail transaction volumes up 18% and transaction values rising 16%. The number of clients using its Nedbank Money app topped two million for the first time in 2022, up 23% on the previous year, with transactions on its Money app up 35% and transaction values rising 27%.
So much for the overall plan, what of the specifics? One is Avo, a super app that enables clients to buy essential products and services online and have them delivered to their homes simply, seamlessly and – this being the key point in a country where many rightly fear the threat from cybercriminals – securely.
The number of users of the app nearly doubled in the 12 months to the end of March 2023, to more than two million. Last year, the number of companies registered to sell goods and services via the application rose by 9% to more than 23,000.
And Nedbank continues to bolt on new services to the platform. Avo Auto, a virtual car dealership first unveiled in 2021, now hosts more than 400 accredited car dealerships, with more than 16,000 vehicles available on the platform. Avo B2B Marketplace connects buyers and sellers via a secure platform. Last year, a host of multinationals signed new partnerships to operate via Avo, including Apple, Dell and Uber Direct.
“The aim is to provide customers with convenience, value and a high-quality experience,” says Avo’s digital executive, Vishal Maharaj. “The banking sector in South Africa has become the de facto digital custodian of people’s money. We are trusted more than supermarkets or big retailers. Nedbank is at the forefront of this, and this makes us really well positioned for the future to provide safe and secure transactions whilst helping our customers find solutions to everyday needs and wants.”
The banking sector in South Africa has become the de facto digital custodian of people’s money. We are trusted more than supermarkets or big retailers
Vishal Maharaj
Avo currently operates only in Nedbank’s home market, but a rollout announcement is “imminent”, adds Maharaj, with South African Development Community nations, a region that includes Mozambique, Zimbabwe, Angola and Tanzania.
In September 2022, Nedbank became the first African financial services company to buy a village in Ubuntuland, a place that only exists in the Metaverse. Users can buy, sell and rent property (more than 200,000 plots of ‘land’ are available to those with enough tokens to spend), as well as other digital assets in the imaginary realm, which describes itself as “a place for gamers, dreamers, brands, individuals and more”.
