A new digital-only bank called Bank Zero will be launched in South Africa by the end of the year.
The 45-percent black-owned bank is the brainchild of Michael Jordaan, former CEO of First National Bank (FNB), and tech entrepreneur and banking innovator Yatin Narsai.
Here are five things you need to know about the new app-only bank:
1. All banking will done from a mobile phone
Anyone or any business using a smartphone will be able to use the app.
In a statement following the announcement, Jordaan said: "Facebook, WhatsApp, Twitter and Instagram are the new normal for societies. Why shouldn't banks also innovate in this era of wider connectedness, while 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."
2. Everything will be digital
You will not need to drive somewhere, park the car or stand in a long queue. Everything from signing up as a customer to doing things that normally need signatures and paper work will be done via the app. To access cash, customers will be able to use ATMs both locally and internationally, as well as major local retailers.
3. Expect lower banking fees
The founders say the fee structure is simple. Customers will gain much more than they pay – especially businesses – and some particularly painful fee practices will be eradicated.
Furthermore, the absence of banking structures is expected to contribute to the lowering of costs.
Business banking fees are much higher than fees for individuals. That's a problem. And an opportunity for a startup to bring relief.— Michael Jordaan (@MichaelJordaan) January 16, 2018
4. What's in a name?
Jordaan told Fin24 that Bank Zero was actually inspired by mathematics. "When it came to invention in numbers, clearly numbers like one, two, three, four were invented first – and something like zero only came later. But when it did, it changed mathematics altogether.
We felt the same applied to us in SA. We certainly are not the first bank – and not the first mobile bank – but we do hope that we are able to revolutionise banking in SA. That is where we derive our inspiration from."
5. The public launch will be in late 2018
The launch is expected for fourth quarter of 2018 -- and this is where Jordaan and the rest of the team will disclose all important details about the functioning of the app and its competitiveness in the banking sector.