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Segmentation Essay

9567 words - 39 pages

Standard Bank’s Inclusive Banking Model – An Overview
Prepared by Pierre Coetzer and Nicolas Pascarel, Reciprocity

A B4D Pathfinder Case Study
September 2012

Table of Contents
1. 2. 3. 4. 5. 6. Executive Summary ....................................................................................................................... 3 The Changing Face of South Africa’s Retail Banking Landscape ................................................... 5 Standard Bank’s Inclusive Banking Strategy: Combining The Power Of Technology With Informal Economic Networks ...................................................................................................................... 9 Implementing the ...view middle of the document...

One of the tools, the B4D Toolkit, will assist businesses to strive towards continuous improvement in developing inclusive business practices, providing guidance on what companies can do to progress from one performance level to the next and how they can do it. The following case study was conducted to gain additional knowledge for the further development of the B4D-Toolkit. It articulates business’ experiences of steps taken to reach and involve the poor. It also identifies what challenges must be taken into consideration when it comes to looking for new markets and the design and distribution of pro-poor products. Standard Bank Group (Standard Bank) is Africa’s largest financial institution. Like all other established legacy banks in South Africa, it has, over the past decade, expanded access to financial services and provided affordable banking solutions to people living in poverty. As the cost base of traditional retail banking is comparatively high in South Africa, Standard Bank, like its competitors, has had to innovate in order to reduce the cost of providing retail banking services to the unbanked and under-banked sectors of the population. Encouraged by the opportunities at the lower end of the market, and the success of branchless banking solutions and mobile phone technology in other emerging markets, Standard Bank has actively pursued an inclusive banking strategy over the past five years, aimed at providing affordable banking solutions to people with low income in a commercially viable manner. This has led the Bank to innovate not only at product level, in the form of a low-cost transactional account, but also at distribution level, by entering into partnerships with thousands of retailers in low income communities across South Africa՚s peri-urban and rural areas to provide easily accessible points of access. Called ̔AccessPoints̕, they function almost like no-frills branches, where account holders can carry out a number of transactions, including cash services (called cash-in and cash-out transactions, similar to depositing and withdrawing cash at a bank branch), purchasing prepaid airtime (mobile phone credits) and electricity,, and, in future, paying for goods and services. Since launching its inclusive banking strategy in 2007, the Bank has built a network of 9,700 AccessPoints across all of South Africa’s 9 provinces. Approximately 900,000 low-cost accounts have been opened thus far, and 90,000 new account openings per month by the end of 2011 is expected. Most of these customers have never used banking services before. The business case for the Bank’s inclusive banking strategy is, however, not guaranteed. Success will partly depend on Standard Bank’s ability to overcome a number of challenges, including encouraging customers to actually transact on their accounts, and to ensure a sustainable skills transfer to the owners of AccessPoints, as well as to the sales agents who help the bank obtain 3

new customers. If these...

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