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South African Financial Services, leading the technology wave

By Staff Writer

The vast majority of technology hungry South Africans are drooling over the prospects of South Africa finally having uncapped Internet connectivity, but don't forget the valuable role that the financial services industry is playing in bringing the country into the technological forefront.

Andy Gilder, General Manager of Justmoney.co.za says: "Not only is high end access to the Internet starting to show significant decreases in the barriers to entry, but there is a simultaneous move from the local financial services industry towards a more Internet focussed business strategy."

Gilder points to FNB's recent partnership with global Internet payment solution PayPal as the main focus of the tech savvy community at present; their enthusiasm driven mainly by the fact that it will allow local online users and vendors to make and receive payments in a far more convenient and cost effective way. He says that if one looks more closely, South Africa's financial services industry is making multiple strides to incorporate technology into their offerings.

"While South Africa's tech savvy community is simultaneously scrutinising and salivating over the recent FNB/ PayPal partnership, it is important to realise that there are a number of technological advancements currently being undertaken by the financial services industry."

"Capitec bank is seeing great success in pioneering a paperless banking solution, using things like biometrics to identify clients and assist them in their daily banking. FNB now allows users to apply for a bank account online and while you will still need to go into the branch to have some legal requirements fulfilled, this must be seen as another big step in the right direction."

It's not just existing banking solutions that are driving the technological advancements, there are a myriad of offers on the horizon focussing on alternative payment solutions - many believe we'll see the need for things like rural banking cast aside altogether.

"Vodacom and Nedbank seem to have tied up a deal with mobile payment solution M-Pesa, ensuring that South Africa will finally have access to a mobile payment solution that has already shown significant success on the continent in places like Kenya. Standard Bank countered that move and was in fact quicker to market with a mobile based cash send solution that will leverage off the branch network of the supermarket group Spar."

Absa and FNB have had cash send solutions for some time already and products that allow users to send pin numbers to mobile phones and have recipients simply enter the pin number into an ATM to receive their money is reportedly growing in popularity.

Retail banking isn't alone in its innovation and there are the other financial services offers making technology waves. The short term insurance solution pioneered by Hippo has already seen great success and it has recently been joined in the online space by its long term equivalent, the life insurance industry. South Africa now has a 100% online life insurance solution that allows consumers to get quoted on life insurance, apply for the products and get approval online without ever having to speak to a consultant of any kind.

"The life insurance solution is perhaps slightly ahead of its time given that many South Africans are still fairly sceptical about transacting entirely online. Our studies have shown that South Africans prefer to speak to a consultant of some kind during the process, but with trusted global solutions like Paypal and M-Pesa hitting our shores, you can be certain that we will reach a critical mass of trusting online users far more quickly - it is important to recognise the role that the financial services industry is playing in making South Africa an evolved digital marketplace."

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