Big changes to banking trends during lockdown
The COVID-19 lockdown implemented by the government is having a big effect on the South African economy.
This includes the banking industry, as banks have confirmed to MyBroadband they have encountered significant behavioural changes during this period.
This means that banks had to adjust their strategies accordingly.
MyBroadband spoke with South African banks about how they are dealing with the national COVID-19 lockdown, and their responses are detailed below.
Nedbank
Nedbank said that while it had seen strong growth in transactional point of sale activity in early March, transaction numbers have since decreased dramatically.
“During this time of heightened anxiety for our clients, we’ve seen a change in behaviour with clients moving to use more digital channels than ever before,” added Nedbank.
Nedbank said it is also committed to helping all clients who are in good standing on a case-by-case basis.
This will be executed through the use of payment arrangement options that will be tailored to the client’s situation.
Nedbank said that due to the unprecedented challenges posed by the coronavirus as well as the recent ratings downgrades, it is not able to predict how it will be affected as a business for the remainder of the year.
However, it has withdrawn its financial guidance to the market that was issued on 3 March and is reviewing its medium and long-term targets.
“Protecting our staff from the adverse impact of COVID-19-related operating changes remains a priority,” said Nedbank.
It said its CEO has pledged to take a 30% salary reduction for the next three months, and this money will be donated to the Solidarity Fund.
TymeBank
TymeBank said it has seen unusual customer spending patterns in recent times as a result of the lockdown.
This includes a surge in purchases pre-lockdown followed by a steep decline after the lockdown started.
It added that it has seen an increase in average transaction values, and fewer customers are making low-value purchases.
Additionally, while TymeBank was seeing growth of over 100,000 customers per month before the coronavirus pandemic, this has now slowed.
It said it is difficult to predict how things will unfold after the lockdown is lifted given the negative impact on the economy and employment levels.
However, it has no intention of reducing the salaries it pays its staff.
“Given our unique partnership with more than 800 Pick n Pay and Boxer stores across the country, our kiosks remain open as long as the shop where the kiosk is located remains open,” said TymeBank.
“We remain bullish that our unique mix of incredible value and efficient digital processes will continue to win the hearts and minds of customers, and that despite these trying times for our country and its people, our young bank will grow from strength to strength.”
Discovery Bank
Discovery Bank said that, as was the case with most banks, it saw an increase in spending before the lockdown, followed by a period of more muted spending afterwards.
Notably, however, it said it has seen a recovery in spending patterns over the past week.
Discovery said that at this stage, it has no plans to implement any salary cuts.
As it is a digital bank, it does not operate branches, providing an advantage over many other banks during this period.
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