The banking and wealth management group Investec has launched its first day-to-day business banking account in, what a Wednesday (July 14) Reuters article calls, “a push to attract customers among South Africa’s more than 100,000 mid-sized firms.”
The company said Wednesday it was offering this account to firms that are at least three years old and see an annual turnover of 30 million rand, or $2.1 million. These firms might see themselves as “too small for a specialist lender like Investec” in a market dominated by South Africa’s four biggest banks, the Reuters report said.
Investec offers services that include cash management and foreign exchange and lending. The new account will cover everyday needs, such as withdrawals and deposits, allowing it to serve as the main banker for new customers.
Dhiren Mansingh, head of business transactional banking, told Reuters the move would generate new business as customers typically turn first to their main bank for products.
“A transactional offering is the glue for a client,” Mansingh said. “We think that this can be a material growth opportunity from a revenue perspective and a client acquisition perspective.”
Over 100,000 firms meet the criteria for Investec’s turnover threshold, based on research estimates from the company. Mansingh said the company wants to see 5,000 to 8,000 firms meeting its other criteria using its entire suite of products in two to three years.
PYMNTS spoke with John Elliott, head of open banking at Investec, last year to discuss the benefits of open banking. One of the topics our interview touched on was the challenge of gaining consumer trust.
“The biggest challenge to open banking in the short to medium term is going to be consumer acceptance,” Elliott said. “It’s still easier to use a card, and in some ways, it is safer because you hold the chargeback. If you don’t like a transaction, you can always reject it, and you don’t hold the liability for it.”