In 1966 the architect Cedric Price said: "Technology is the answer, but what was the question?" in order to highlight the problem of jumping into tech-solution mode - no matter what the problem requires. This is what I felt around the news this week about the launch of new banking value proposition called BankZero in South Africa. This prominence would have been boosted by the fact that Michael Jordaan - Mr. "bank innovation from FNB - is amongst the founders with another senior ex FNB partner. All of the current media reporting focuses on the fact that this bank will be "digital", "branchless" and "app-driven" - ignoring the real business model innovation driver contained in their press release: "Bank Zero will make use of a mutual bank licence. The mutual banking concept mirrors current social media trends and benefits customers by allowing for the support and creation of financial communities. 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)."
This launch of BankZero is part of a much bigger global trend to deviate from the current largely exploitative banking business model and create institutions that are owned by their customers - see here for an overview of different models. As previously mentioned this very relevant in our African context where many customers come from a "stokvel" group banking tradition that does not know exorbitant fees and interest rates - and also cares very little about black credit cards and VIP lounge access . Globally we have had some interesting start-ups like Fidor Bank in Germany where customer-owners jointly decide on fair lending rates. In our case we are tapping into the COOP Banking model that is also making a come-back all over the world - see here for UK perspective. One of the really great benchmarks is RaboBank from the Netherlands - see more about them here and also here.
As you will see when digging deeper into this trend its again not about the technology - which is an enabler - but a much more human insight about the types of organiations people across the world want to engage with and be part of that is the real driver behind this innovation. There is some good reading available from ReD Associates here and here.
We are keen to connect with anyone that shares our vision - so feel free to reach out,.