FNB community banking plan

• Bank is deploying 300 staff in underserved areas such as Springs, Olievenhoutbosch, Lenasia South and Daveyton

FNB is bolstering its offering to underserved communities in a clear sign that retail banking competition is hotting up as weak economic growth makes it harder for lenders to grow revenue from existing customers.

FNB is bolstering its offering to underserved communities in a clear sign that retail banking competition is hotting up as weak economic growth makes it harder for lenders to grow revenue from existing customers.

The FirstRand-owned bank is hiring 300 community bankers, to deploy in previously disadvantaged communities in the next few months as it expands its community branch network in places such as Springs, Daveyton, Lenasia South and Olievenhoutbosch.

FNB has also deployed 11 community business banking advisers in KwaZulu-Natal to help owners of small to medium-sized enterprises (SMEs) access financial services, in a pilot programme that will be expanded to other provinces if it proves successful.

“The biggest focus for us is the community bankers and getting boots on the ground. We’re really ramping that up,” Lee-Anne van Zyl, CEO of FNB’s points of presence, told Business Day.

“It’s about enhancing the local market strategy by being present on the ground and being contextual in the environment where customers live and bank,” Van Zyl said.

FNB has 611 branches in SA, 122 of them community branches: points of presence that tend to be smaller than others, with an average size of 135m²-150m².

Community branches typically have service advisers to help customers access digital platforms such as the FNB app or online banking, rather than tellers to process cash payments or deposits. These branches don’t offer niche services such as foreign exchange.

YOUTH OPPORTUNITY

Of the community branches, 22 were built in the past 18 monthsl The bank is building 28 more from now to end-June 2024.

FNB will also offer 150 youth work experience with its internal FirstJob initiative, in which new recruits will assist customers to use its digital interfaces at community branches.

“When we do work in communities, there’s a huge education [drive] to get customers comfortable with that optionality, but at the same time never eradicating a physical presence where you actually do need it,” Van Zyl said.

“We see the digital presence and the physical presence as being complementary. For us it’s not about being one or the other, it’s about being a combination.”

That’s a departure from the strategy of rival lender Standard Bank, which is openly shutting down branches and removing ATMs in an attempt to drive customers to its digital platforms.

It’s also a clear ploy to stave off competition from new rivals such as TymeBank, which now has 1,450 points of presence in SA through its kiosk network with retailers TFG and Pick n Pay — more than double FNB’s branch network and almost twice that of Capitec’s 856 branches.

Despite FNB experiencing the same drop in branch footfall as its rivals, it has opted to redesign those branches to provide a more tailored offering to clients in specific communities rather than close them.

FNB’s branch footfall, for example, has dropped to about 1.2-million unique customer visits per month from about 2-million in 2018, a 40% reduction in what it calls “unique feet”.

Rather than close branches it has responded by reducing its average branch size by 33% and tailoring its service offerings to cater to the local markets in which its branches are situated. Its average branch size is now 350m² with some as compact as 100m², which compares with an average branch size of 519m² in 2018, with some branches as big as 1,000m².

“You can go on a huge drive to close points of presence but that wasn’t our strategy,” Van Zyl said. “Our response was to make sure we are in the right places with appropriate-sized branches. We’ve also been deliberate to reskill and repurpose our staff capabilities.”

Another interesting FNB solution, which is likely to resonate with middle- and upperincome clients, is deploying 430 external advisers who act as mobile consultants. Armed with iPads, these mobile bankers are empowered to meet clients in person at venues of their choice, either at home or a coffee shop, to facilitate improved services.

“If customer feet are not coming to the branch in the same numbers that they used to, then we need to reposition to be able to hunt them externally,” Van Zyl said.

“We definitely need a stronger community focus.”