Michael Jordaan, the former CEO of South African bank First National Bank (FNB), announced via Twitter on Tuesday 16 January 2017 that he is backing Bank Zero, a new digital only bank. The bank, which will be 45% black-owned, has been granted a provisional licence by the South African Reserve Bank and is set to launch in the fourth quarter of 2018.
The bank revealed via its newly created website that it has managed to secure a mutual bank licence from the Reserve Bank. “The mutual banking concept mirrors current social media trends and benefits customers by allowing for the support and creation of financial communities,” it said. “It also provides for a capital-efficient framework, and Bank Zero will be sharing the subsequent cost benefits with its customers (both businesses and individuals),” revealed the bank.
Mutual banks, or mutual savings banks, are banks that typically operate without capital stock, and is owned by its members who subscribe to a common fund. This, the bank said, will provide for a capital-efficient framework, and Bank Zero will be sharing the subsequent cost benefits with its customers (both businesses and individuals).
Founded by two stalwarts in South Africa’s Financial Services industry, tech entrepreneur Michael Jordaan and banking innovator Yatin Narsai – who together built FNB into the most innovative bank in the world under their decade-long leadership – Bank Zero will offer a unique and fresh approach to banking without any legacy systems which can be costly to maintain.
Businesses, individuals, families and communities will benefit through Bank Zero’s products and services which are in tune with modern-day realities, according to co-founder and Chairman, Michael Jordaan.
“Facebook, WhatsApp, Twitter and Instagram are the new normal for societies. Why shouldn’t banks also innovate in this era of wider connectedness whilst still ensuring a robust banking value proposition? Bank Zero is addressing these realities, while employing cutting-edge technologies and delivering state-of-the-art security,” added Jordaan.
Bank Zero is part of the new frontier of banking which has arrived through smartphones and associated digital technologies, according to co-founder and CEO Yatin Narsai.
“Beyond the mobile technology revolution, other innovations will bring more financial transparency and control to our customers in an intuitive, secure and affordable way. Coupled with the mutual banking concept, this will help nurture a savings culture in South Africa. New technologies, together with tried-and-tested account features like chip-and-pin cards, will deliver real value to our customers,” said Narsai.
The other co-founders also have extensive experience and knowledge of banking through their previous specialist roles in financial services. Yatin is full of praise for the team, “Innovation is hard work, it needs a business culture where everyone contributes and is free to challenge. Such passion is in itself innovative; it is our DNA.”
What makes Bank Zero different:
- There will be no branches.
- To access cash, customers can use ATMs locally and internationally. Cash-out at major local retailers will also be available.
- All processes have been designed from the ground up with digital interaction in mind.
- All communication will be app-driven. Email communication will also be available.
- Customers can become shareholders, based on the type of savings products they have.
- Zero Bank will join at least three other new banking groups that are set to launch during the course of 2018.
- This includes Tyme Digital, Discovery Bank, and a reformed Postbank.