Adrian Vermooten, head of digital banking at Absa. Picture: SOWETAN
Adrian Vermooten, head of digital banking at Absa. Picture: SOWETAN

ABSA will launch its first banking application early next year, and this week laid out its vision of using innovation as a weapon to grow and defend market share.

The banking application was being tested by about 100 staff members before its launch in the first quarter of next year, said Adrian Vermooten, head of digital banking.

Mr Vermooten and the head of the consumer banking unit, Simon Just, met the media in Cape Town to brief them on Absa’s innovations.

They include the launch this week of a transactional banking product aimed at entry-level career graduates and professionals, called Potentiate. Absa estimates up to 250,000 of its customers of more than 12-million could migrate to Potentiate. The bank plans to target the more than 150,000 graduates entering the job market annually.

Potentiate has a first-to-market Titanium MasterCard embedded with the tap-and-go payment technology that allows a customer to pay for low-value transactions, and an LCD display providing a one-time PIN for added security when shopping online.

Mr Just said this was just the start of a "five-year journey" by Absa to introduce innovations and ensure that the Barclays-owned group was not left behind by banking rivals, some of whom were first to market with banking applications.

Absa said it would announce at the end of this month a strategic partnership with an unnamed organisation to introduce "a South African first" in mobile payment acceptance technology.

It said the "game-changing" technology would create new opportunities in the payments acceptance space and "is set to fundamentally change the way that merchants in the commercial and enterprise segments make payments".

Mr Just said Absa had never felt pressed to follow rivals, despite perceptions it had been a laggard in introducing a banking application. Rather, he said, the bank had quietly been implementing an integrated digital strategy that included mobile and online banking, and the introduction of a new generation of ATMs with enhanced cash acceptance and security features.

"Throughout 2013 we will begin to roll out a lot of value-added products. For us it’s a five-year journey and Absa is starting to convey we are bringing value and choice."

Absa’s innovation strategy proves the war for customers among the big banks has gone beyond them claiming the supremacy of their products or of their customer service.

The banks are embracing the increasing convergence between mobile and banking technology as an opportunity to innovate.

First National Bank (FNB) was first to market with its banking application in July this year.

It had also introduced other digital and mobile banking products, and had a three-year pipeline of more innovations, said FNB CEO Michael Jordaan.

Standard Bank and Nedbank have also launched banking applications. Like FNB, Standard was also selling smartphones.

Mr Just said Absa was investing in mobile payment solutions, which bankers saw as the future.

Insiders said Absa was working with Barclays to extend the Pingit international mobile money transfer service recently launched in Kenya.

Mr Vermooten said Absa would build a new payment ecosystem in partnership with local cellphone companies to ensure customers would be gradually migrated to payment technologies such as the tap-and-go method.

Mr Just admitted Absa’s rivals could easily launch their own version of innovations. But he believed differentiation was vital so that customers could see value, which would make it harder for rivals to poach them.

Mr Vermooten said Absa was also revamping its 8,500-plus ATMs in a three-year programme costing more than R450m.

• Kamhunga was hosted by Absa in Cape Town.