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- Bank Zero, the challenger bank backed by former FNB Michael Jordaan, has launched an app-only offering aimed at providing low-cost services to commercial clients.
- The bank, which launched in 2021, says its customer base numbers in the "tens of thousands" and are also has growing businesses using its services.
- The challenger bank wants to bring clients into the digital age, eliminating time consuming, and often manual, paper and branch-based processes.
- For more financial news, go to the News24 Business front page.
Bank Zero, which is backed by former FNB CEO Michael Jordaan, has launched a completely app-based commercial banking offering that aims to provide low-cost transactional capabilities to its growing client base.
Yatin Narsai, Bank Zero’s CEO, told News24 that the digital-only bank is positioning its commercial banking offering to lure businesses with annual turnovers of between R60 million to a "few hundred million rand."
"Everything from setting up your in-house banking team, changing mandates and granting access privileges, to making payments is all done within the app," said Narsai. "We have customers that have already demonstrated savings [on transactional fees] of over R4 000 a month."
"We strictly don’t do lending, but in business banking, lending is not a big deal," Narsai said, adding that most of Bank Zero’s commercial banking customers are focused on notice deposits and transactional banking.
READ | Bank Zero finally launches to the public, but it's not interested in lending - for now
Bank Zero will also allow its commercial banking customers to set up business debit cards for staff, download transaction histories into spreadsheets for easier reconciliations, as well as make scheduled payments and transfers. Changed account details are flagged, and supporting documents can be added to payments for authorisation.
The bank can also provide commercial banking clients with card machines, which are available through its partnership with iKhokha and integrated with Xero Accounting. Bank Zero says the foundations for doing bulk payments and collections are also in place and will be rolled out in due course.
"We have a couple of commercial banking customers whose turnover will comfortably hit a couple of hundred million a year and they’re using a lot of that functionality already," said Narsai.
Narsai said Bank Zero’s current customer base – including individuals – numbers "well into the tens of thousands" though he said a more precise update would be provided in due course. Bank Zero is expected to break even once it reaches 100 000 customers, a threshold it expects to pass in the next few years, said Narsai.
"Our customers are very much in the high value segment, so it’s quite the norm to see people switching from private banking to Bank Zero," he said. "We’re seeing good revenue growth."
The challenger bank also aims to eliminate the time consuming, and often manual, paper and branch-based processes that most business customers experienced when dealing with the legacy systems of traditional banks. Bank Zero’s commercial banking offering will allow its business customers to make payments, change mandates, grant access privileges, increase transaction limits or set up their in-house financial teams by using its app.
"We have completely rethought commercial banking to bring it into the digital age," said Jordaan, who chairs Bank Zero, in a statement. "We’ve built it from the ground up, which means we have no legacy systems that are both cumbersome and costly, leading to inefficiency and high bank charges."
