African Bank is now out to capture higher income earners in what is going to heat up the battles for South Africa’s banking market.
African Bank, which conquered the lower to middle income banking market over the past decade or so, launched yesterday a product marked for high income earners. Dressed up in heavy marketing speak, the product titled PlatinumPlus+ also exposes African Bank’s bankassurance ambitions.
African Bank characterised PlatinumPlus+ as a premium banking solution. It further described the product as a competitively priced banking solution targeted at financially fit, lower risk and higher income existing and new customers. The company said the product “provides a differentiated bundle of products, namely a Platinum Visa Credit card, a savings wallet and long term insurance…”
African Bank’s Israel Skosana, Head of Marketing and Consumer Insights said “Our intention was to bundle a number of products into one solution that rewards financially fit customers with additional value. The underlying philosophy is to assist customers to choose the correct products for their needs.”
Cut out the marketing speak and you have a challenge to the retail market controlled by Standard Bank, Absa, FNB and Nedbank. Ironically the big four have been seeking a formula to tackle the huge lower to middle income market captured by the African Banks and Capitecs of this world. This movement has blurred historical market segmentation. But the cup goes to Capitec, which has shown that banking is banking by obliterating income based market segmentation in its tracks of success. Capitec’s value proposition has been a promise of cheaper banking charges.
It is difficult to decipher African Bank’s marketing speak to judge the affordability of its proposition. Skosana said “We believe that PlatinumPlus+ provides one of the lowest interest rates and highest savings rates in the market. It also affords the customers rewards and benefits through prudent choices as well as cash back opportunities.”
The bank announcement added that “The customer’s interest rate could be as low as 13%, comparing very favourably with other credit providers offerings. This is made up of a gross rate of 16.5% per annum but with regular repayments of the required monthly minimum balance, customers will earn a rebate of 3.5%”.
To promote a savings culture PlatinumPlus+ also offers a savings wallet into which customers can deposit savings or opt to put their cash back rewards into their savings wallet and earn a highly competitive 5% interest per annum”.
Skosana added that “Our interest rate and cash back at point-of-sale are among the most competitive rates in the market. Our aim is for our customers to unlock value and additional savings through their financial behaviour”.