The banking and wealth management group Investec launched its first daily business bank account, what Wednesday (July 14) Reuters The article calls “a push to attract customers from South Africa’s more than 100,000 mid-sized businesses.”
The company said on Wednesday it was offering the account to companies that are at least three years old and have annual revenue of R30 million, or $ 2.1 million. These companies could see themselves as “too small for a specialist lender like Investec” in a market dominated by South Africa’s four largest banks, according to the Reuters report.
Investec offers services that include cash management, foreign exchange and lending. The new account will cover daily needs, such as withdrawals and deposits, allowing it to serve as the primary banker for new customers.
Dhiren mansingh, head of transactional business banking, told Reuters the move would generate new business, as customers typically turn to their primary bank for products first.
“A transactional offer is the glue of a customer,” Mansingh said. “We believe this can be a material growth opportunity from a revenue perspective and from a customer acquisition perspective.”
Over 100,000 companies meet Investec’s revenue threshold criteria, based on company research estimates. Mansingh said the company wants to see 5,000 to 8,000 companies meet its other criteria using its entire product line within 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 covered in our interview was the challenge of gaining the trust of consumers.
“The biggest challenge in opening up banking services in the short and medium term will be consumer acceptance,” Elliott said. “It’s always easier to use a card and in some ways it’s safer because you keep the chargeback. If you don’t like a transaction, you can always reject it and you take no responsibility for it.