Reference no: EM133237661

Case: From 25 000 to 15 million clients: 20 years of Capitec

Since opening for business on 1 March 2001, we went from 55 branches and 25 000 clients to more than 840 branches and 15 million clients. We've gone digital, paperless, built an eco-friendly head office and offer our clients the choice of opening a bank account with a selfie. So, how did we get here?

Where it all started
"We have always had the drive to do things differently. For us, it's about agility and innovation," says Gerrie Fourie, Chief Executive Officer at Capitec. "Consistency, not complacency. Challenging the norms. We're looking forward to continuing to drive change within financial services in 2021 with a number of new digital products." When Capitec was formed, we identified 4 key values that would always remain priorities for us: accessibility, simplicity, affordability, and personalised service. Our focus, since the beginning, has always been on our clients and we wanted to make sure that people could access their banking when they needed to. Right from the start, we made our mark by shaking up South Africa's banking sector. All our branches opened at 8am, an hour before any of the other banks did. We also stayed open later (until 5pm), giving clients 67 more banking hours in a month.

Then in 2003, we launched Global One, which gave our clients 4 free savings accounts linked to their main savings account. It was also the first savings accounts in the world that you could name yourself. It was one of the ways in which we wanted to simplify life by helping our clients set tangible savings goals, as well as being accessible, transparent, and affordable.

Making banking accessible

Riaan Stassen, the then CEO of Capitec, wanted the bank to be more accessible so, in 2005, we bought a Toyota Tazz and set up a mobile bank in the boot. But this wasn't enough; the team wanted to make banking even more portable. So, they built a computer in a silver aluminum case and simply carried it to wherever people were. This innovation was called "Die Tas Man" or "The Suitcase Man" and made mobile banking possible on site.

The start of the digital/online era
In 2008, we entered the online space by introducing internet banking to further simplify banking for our 2 million clients. A year later, cellphone banking became available to our clients. With the security of our clients in mind, we became the first bank in South Africa to offer biometric verification through fingerprint scanning in branches. Then, in 2009, we started rolling out new biometric scanners approved by the FBI in the USA. At the time, scanning only one fingerprint was the norm; we scanned all 10 fingers. 2009 was also the year that simplicity became a really important value for us. The reason? The financial industry was overly complicated, so it was important for us to simplify banking even further and make it more accessible to each and every client. By 2011, we had 3.7 million clients, and started opening branches on Sundays. 3 years later, the Capitec banking app was launched, allowing our clients to bank from anywhere at any time.
2020 and beyond
Digital adoption soared in 2020 and it became even more important to give our clients safer ways to transact online during the COVID-19 pandemic. We launched a virtual card and biometric eSignature service, which allows documents to be signed digitally. This was the final step in becoming a completely paperless bank. Later that same year, we partnered with Easy Equities to give clients access to convenient, affordable investing through our banking app. More than 70 000 clients registered for the Easy Equities widget on the banking app in just 4 months.

"We are proud to have created a bank for all South Africans," says Fourie. "We believe that banking should fit effortlessly into our clients' day-to-day lives, taking up as little time and money as possible. Therefore, we created a simplified, affordable solution underpinned by industry-leading technology and personalised service that appeals to South Africans from all walks of life."

Problem: Elucidate how Capitec bank can prepare itself against the threat of new entrants to the banking industry.