Truong Mellor speaks to Marius Wait, director of
personal and business banking at Standard Bank, South Africa’s
largest financial group, about its plans to extend online banking
operations to eight more African countries by the end of this year,
including Kenya, Uganda, Tanzania and Ghana.

Standard Bank, South Africa’s largest financial group, has
announced plans to extend its online banking operations to an
additional eight African countries by the end of this year. Outside
of its local market, Standard Bank already offers internet banking
in Namibia, Mozambique, Lesotho, Swaziland and Botswana. This new
rollout will see it offer online banking in Kenya, Uganda,
Tanzania, Malawi, Zimbabwe, Mauritius, Zambia and Ghana.

Online banking has, so far, shown slow progress across Africa.
Standard Bank has only 11,000 online banking customers within its
established non-South African markets in comparison to over 600,000

The bank estimates that there are some 2.5 million online customers
within South Africa, though with internet access becoming more
readily available, there is still room for healthy growth.

Revenue at Standard Bank’s Personal and Business Banking unit grew
by 18 percent this year, according to figures released in the
bank’s 2007 interim report. A 67 percent rise in internet
transactions contributed significantly towards this growth.
Overall, the number of online banking customers grew 24 percent
across the half-year period, compared to 28 percent for the H106

Marius Wait, director of personal and business banking at Standard
Bank Africa, believes that the potential for online distribution in
Africa is huge due to an initially low customer base combined with
strong economic performances across the continent, facilitating the
need for individuals and businesses to equip themselves with
up-to-date banking services.

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Standard Bank will be offering internet banking, mobile banking and
POS acquiring, said Wait. “All of these electronic channels will
offer access to the customers’ banking products, such as
transactional, savings, deposits and loan accounts to facilitate
payments, transfers, balance enquiries and access to

According to recent estimates from the World Bank, the number of
sub-Saharan citizens that fall within the middle class bracket will
reach 43 million by 2030, a huge jump from just under 13 million in

A larger channel expansion

Although the bank cannot disclose exact numbers regarding targets,
Wait foresees “significant growth” for internet banking within

The expansion of the bank’s online services is part of a larger
self-service channel expansion project which includes the rollout
of ATMs in African countries at an expected rate of 100 to 150 per
annum. These numbers, however, are dependent upon the successful
acquisition of the Kenyan CFC Group as well as the IBTC Chartered
Bank in Nigeria. There are currently 500 Standard Bank ATMs across

Plans are also underway to launch mobile banking in all of the
countries the bank has a presence in over the next few months.
Online banking services in Africa will be geared towards the higher
end of the market, focusing on customers with readily available
internet access, while mobile and ATM banking will primarily serve
lower-income consumers.

“We have a base of affluent banking customers across our network in
Africa, and we are targeting them through cross-selling this
solution,” said Wait. “We look at the behaviour of customers, and
then we proactively target some of them. When some customers walk
into a branch and buy certain products, it is an indication that
they are from the typical demographic of users of the service.
That’s the initial impetus.”

“We’ve also done some workplace banking and marketing where we
target our corporate customers [and their] employer base,” he
continues. “As part of putting our products to them, we also
encourage employers to pay salaries electronically into the
accounts and say to the customer, ‘if you have access to the
internet at your place of work or at home, your money is in your
account, you can electronically do things’. It’s definitely aimed
at upper and middle class people with regular access to PCs.”

Emerging middle class

Although the large majority of the continent’s
middle class consumers are currently in South Africa, there are
growing markets in countries such as Nigeria, Zambia and Ghana.
This emerging middle class is currently fuelling a mortgage boom in
Zambia, as salaried employees look for affordable housing, while
Ghana has seen a sharp rise in recent years of working
professionals with disposable income.

Wait confirmed that Standard Bank’s focus for the time being is on
individuals, while online banking facilities expressly tailored for
businesses will be rolled out in 2008. This ambitious plan for the
expansion of technology-based services will undoubtedly face
several challenges, however, particularly in less developed parts
of Africa.

Infrastructure will be a key issue, although Wait stressed that it
continues to improve across the continent on a continual basis. He
mentions GSM and GPRS connectivity, amongst other options, to
optimise availability.

Security for online banking services will also be a concern. To
this end, Standard Bank has incorporated its experience in the
South African market, and will make use of its one-time password
(OTP) security service.

This OTP facility makes use of a two-tiered authentication process,
whereby the delivery of a second password occurs independently of
the internet banking session. The second password is system
generated and is delivered to the customer’s mobile phone (using
SMS technology) or an email address.