Bank Zero will offer South Africans “really attractive” deposit rates when it is launched, according to founder Michael Jordaan.
Jordaan told Bruce Whitfield on The Money Show that they will have a focus on transactional banking and the use of smartphones as a primary banking tool.
Jordaan added that they are not interested in offering lending products, as established banks have an extensive range of credit solutions.
“We don’t want to take the banking market on in lending… and if you think about it, South Africa does not need to lend more, it needs to save more,” said Jordaan.
The new bank will encourage customers to save, thanks to attractive deposit rates, and its structure as a mutual bank – which rewards customers based on the savings products they hold.
Jordaan said businesses are another focus area for Bank Zero.
“The business segment is probably the one that is neglected by the banking system. They certainly pay far too much in fees.”
Communities and families will also be catered for, he said. This is in addition to their primary target market – anyone who uses a smartphone.
“We want to bring benefits to customers in South Africa and we want to think long-term,” he said.
One of their methods to achieve this is the use of technology.
“It has surprised me what is available in the market for free – in other words, open source,” said Jordaan.
This means it will cost them a fraction of what it costs a traditional bank to launch, which means reduced costs for customers.
It also allows for more enriched functionality compared to a legacy bank, said Jordaan.
Bank Zero announced its establishment last week, following its acquirement of a provisional banking licence from the SARB.
Jordaan said the process to obtain a banking licence was a rigorous one, which took a year and involved the SARB investing all aspects of the business – including its employees.
Following the nod from the SARB, Jordaan said they now have to look at integrating their bank with South Africa’s payment system.
Jordaan hopes Bank Zero will launch its first products before the end of 2018.