On Bank Zero

I want Bank Zero to succeed. I really do. But I have some concerns.

Bank Zero is one South Africa’s newest banks – a mutual bank offering deposits to customers with zero monthly fees on the account. Due to the early interaction of a failed job application to the bank, I had the opportunity to be one of the early beta testers of their banking app.

After first downloading the app, I thought it looked terribly ugly. But this was before it was publicly available, so I thought other things were more important. Sign up for an account occurs easily through the app, despite the snag of uploading the required FICA documents which may not be on the device at the time of signup. Money could then be deposited into the newly created account and a card ordered. The card arrived a few days later. Wonderful.

Later, long after the beta phase was complete and it was publicly available, I started using the bank regularly. In our household budgeting, there is an “allowance” amount which I can use every month to spend on unnecessities and personal fetishes, and the Bank Zero account was the perfect tool to ring-fence this.

I went to my local bookstore, and bought copy of Atomic Habits, a book I’ve heard good things about. I had a friendly conversation with the book dealer about the book while he was processing the transaction, where I tapped my card on the card machine. After the pleasantries, I walked out to get home and enjoy the new wonderful read.

Two days later, I went to have lunch at a nearby independent restaurant. At the end of the meal, I tried tapping the Bank Zero card, and the waitress told me it had declined. There was a cryptic message from the Bank Zero app about configuring something in the settings, a message I didn’t really understand. I then inserted the card into the machine, entered the PIN, and it worked. I then checked the transactions in the app, and noticed there was nothing listed for the bookstore purchase.

From the restaurant, I drove back to the bookstore where the book dealer was very happy to see me. “You’re the Atomic Habits guy” he said gleefully. “Yes I am”. He explained “The card declined and I didn’t realise because we were talking”. After inserting the card and entering the PIN, the transaction was successful.

A few days later, as a laggard in most things trending, I decided to jump onto the Easy Equities bandwagon to see what all the hype was about 2 years ago. I got the relevant reference number from the Easy Equities app, but then spent more than 5 minutes trying to set up a beneficiary on the Bank Zero app. It was hidden behind a menu which required knowledge of the relationship between lunar and solar cycles to figure out.

Which leads me to my main concern with Bank Zero. Their app is hideous. And hard to use. And doesn’t do much else than any other bank out there.

The great thing about a digital bank is that I don’t need to go to any physical place to set up my account or transact. The trouble with a digital bank is that the digital medium of interaction is the only interface one has to the bank. If it’s frustrating, my experience with the whole bank is frustrating. If it’s ugly, my perception of the whole bank is ugly. If it’s buggy, I worry that all the back-office processes in the bank will be buggy and my money won’t be safe. The one thing that they have going for them is former FNB heavyweights which give some credibility to the bank.

I have suspicions on how they got to this point. Michael Jordaan tweeted some moons ago about how they decided to build their own core banking system. This is the central system of the bank which stores all the account and transaction data of bank customers. Many of us who have banking technology experience questioned this decision, but my feeling is that most available core banking platforms from established companies didn’t have the features they wanted to differentiate themselves from the market.

Building a core-banking platform is not child’s play. Ensuring its stability and reliability, especially at scale of millions of transactions per day is an incredibly complex task. I suspect that because so much of their internal capability was focused on building this core banking platform, the user experience of the apps was deprioritised.

This supposed decision was made by people a lot smarter than I am, so I’m in no intellectual position to say whether it was a good or bad decision (or whether the above actually happened). But as a recent regular user of the app, I don’t think usage of the bank will spread by word of mouth.

I really want Bank Zero to succeed. There are banks which exist just because historically they existed, but have offered nothing new to its customers for years. New entrants which offer new and exciting features will spur some of the older dinosaurs into action, like Capitec did all those years ago. And this will be better for the average banking consumer.