Reflections on a winning franchise; FNB voted Best Business Bank, 2016 Sunday Times Top Brands

FirstRand has created very successful financial services brands all of which benefit from its powerful owner-manager culture. FNB Business Banking is no exception and reflects on its fourth consecutive year of this achievement with a strong dose of humility.

Matter of pride

FNB Business Banking prides itself on a strategy of listening first and putting its clients first. Clients such as Taste Holdings who achieved their expansion plans with a specialised acquisition finance solution. Clients such as Efficient Engineering, a steel fabrication business that needed their banking partner of 24 years to help them expand into new facilities. Clients such as South Africa’s leading kids store Toys R Us who turned to FNB for financing, transactional and credit solutions across their vast network of stores. Partnering with great businesses is not only a matter of pride; it’s an opportunity to configure solutions from across the FirstRand Group and deliver them through our sales teams that support these and other businesses in the towns, factories, communities and farms of South Africa. [paragraph 1 of 13]

Strategic direction

Like any large enterprise, FNB ensures dual focus on running the bank and changing the bank; investment decisions, resource allocation and performance management are driven by priorities and strategic objectives in each of these. Running the bank must ensure the reliability and repeatability of its processes and systems. Massive volumes of data pass through complex platforms that need to work first time, every time, and especially when our business customers need them the most. Equally important in running a large banking infrastructure is the trust equity that is earned every day by getting the basics right. Regulatory requirements are minimum standards, a duty of care extends throughout the entire workforce and its leadership. [2/13]

Enabling technology

Fulfilling these promises requires a collaborating network of IT and Operations teams that manage core transactional systems, channels and digital platforms 24/7. Technology is a key enabler of financial services and over 4000 IT professionals across Wesbank, RMB and FNB keep our client’s data safe, our systems working and connected, our software cutting edge and innovative. Partnering with a business customer to deliver financial solutions across insurance, credit, savings and transactional banking products also enables their suppliers, employees and clients in an integrated ecosystem. Technology must be world class, reliable, easy to consume and the teams that look after it require consistent, decisive and experienced leadership. [3/13]

Industry standards

Just as finance leadership is governed with accounting standards such as IFRS, so too the IT industry uses frameworks such as COBIT and CMMI. Board level corporate governance frameworks such as King III includes a charter on IT governance which sets out minimum standards for running the technology function in a large organisation. FNB IT leadership uses the COBIT IT governance framework which ensures that sufficient process maturity, application controls and measurement criteria are in place. Financial institutions are actively targeted by cyber-criminals so it’s also important that digital security keeps pace with digital innovation to protect the bank’s IT estate and the customer data, private information and economic value in its custody. [4/13]

Fintech driving change

Changing the bank is about refreshing this estate; technology assets have a natural lifecycle that requires planning and execution, often with industry partners and service providers. The rise of so-called Fintech across the global banking industry is fuelling a renewed focus on innovative and intuitive software that offers frictionless and digitised processes. Customer expectations are being driven by exponential growth models that are disrupting industries from accommodation to transport; micro-service start-ups are using technology to challenge the asset-heavy incumbents. In South Africa, the banking industry is anticipating this wave of change by setting up partnerships, incubators and funding vehicles that not only stimulates these job-creating businesses but also gives the bank preferential access to these new technologies. FirstRand’s investment banking division RMB recently launched Foundery, an internal fintech research and development team. RMI Holdings’ Alphacode is a next generation financial services incubator that funds and accelerates disruptive small businesses. [5/13]

Growth and innovation

Innovation is integral to FNB’s culture, over R40m has been paid out to employees in incentives for implementing ideas that keep the bank at the cutting edge. FNB Business Banking offers its clients a suite of free value-added solutions such as Instant Accounting, Cashflow and Payroll. Startups can use FNB’s website to register a company name with CIPC as well as check their BEE status inside their secure online banking profile. A recent world-first innovation is DocTrail which allows businesses to load documentation such as invoices that enable an auditable approval process inside their secure online banking profile. The annual FNB Business Innovation Awards in partnership with Endeavour recognises businesses that actively innovate and can scale rapidly. This year’s winner, wiGroup, provides easy mobile payment solutions which are integrated into the merchant’s points of sale; their systems process billions of Rands through 55000 till lanes every year. Wigroup is exactly the type of high-tech, disruptive business that FNB Business actively supports to help drive the transformative and job-creating SME engine of growth in South Africa. [6/13]

Skills and partnerships

FNB Business Banking’s success is also due to a focus on skills and talent development across all its product lines, and especially in support areas such as HR, finance, risk and technology. Software enables business processes to work autonomously but it is people who design, build, test and implement the IT systems. Last year FNB co-founded the first peer to peer tertiary IT education academy in Africa. Called Wethinkcode it offers a 2 year, free training programme to anyone that passes the stringent online assessments and on-site bootcamps. The annual FNB Codefest was an industry first, includes a 48 hour hackathon and also creates a platform for sharing and learning about innovative banking technologies such as blockchain, cloud, big data and cognitive computing. FNB Business also proactively partners with business community networks such as Silicon Cape, funding vehicles such as Vumela Enterprise Development and industry initiatives such as Simodisa. [7/13]

Transactional products are core

FNB drives customer relationships around core banking transactional products; this ‘more of the core’ strategy has resulted in very successful customer switching and significant investment in the platforms that support these products. It’s also the reason that non traditional players are trying to get into banking – a cell phone account or insurance policy simply doesn’t yield the same level of customer insight or intimacy. Businesses can take advantage of a range of business cheque accounts and the successful eBucks rewards ecosystem creates a benefits multiplier for directors of FNB banked businesses that are also customers of premium and wealth products. Variations of these core products for agriculture, public sector, attorneys, trusts, medical franchises and other niche businesses have resulted in FNB Business Banking achieving a dominant share in many of these markets. Extending business banking benefits to customer’s employees is also a strategic drive; FNB’s cashless payments solution eWallet is offered to businesses in a Pro version that enables them to pay employees and recipients even if they don’t have bank accounts. Automated bulk cash depositing and world class merchant payment solutions also bring together the best offerings from product houses across FNB. [8/13]

Wide range of credit products

Economic cycles create fluctuating demands for credit in businesses; liquidity is their lifeblood and small margins between monthly sales and receipting cycles can create a cash crunch. FNB Business offers a wide range of borrowing solutions across commercial property, collateralised trade, fleet, debtors, leveraged finance and more. Selective invoice discounting is an easily accessible short term funding solution that gives start up or growing businesses immediate access to cash; invoices can be sold to release funds which are often available within 48 hours. Overdrafts and various other types of loans also mean that businesses have access to a range solutions that meet their needs and help them grow sustainably. Strategic, ‘change the bank’ priorities are currently driving investments in the bank’s credit platforms; foundational capabilities for credit origination, scoring and fulfilment are being refreshed through an internal programme at FNB Business. Significant benefits are already being achieved such as automation, improved data quality and more user-friendly credit systems for sales and operational staff. [9/13]

Insure and invest

FirstRand launched Ashburton Investments in 2013, a separately branded, fourth franchise alongside FNB, Wesbank and RMB.  This strategy has been hugely successful in creating a new range of market-leading investment products that can be accessed directly or sold through the other divisions. Ashburton’s offerings complement a range of savings and investment solutions that businesses already take advantage of through FNB Business. Importantly, the industry knowledge of experienced business bankers means that advice and insight helps our business clients make the right product choices to achieve their own strategy and be successful. The highly innovative 3rd Party Investment Manager enables businesses to manage their client’s funds inside a secure online banking platform. Attorneys, property managers and estate agents actively use this tool which is fully self service, provides access to notice deposits and offers valuable features such as letters of undertaking. FirstRand recently launched a Life Insurance business under its own license; business customers also have access to short term insurance solutions that protect assets and ensures unforeseen losses are fully covered. [10/13]

Sponsorships and community

The business bank also supports iconic sporting events, such as the biggest canoeing event in Africa, the Dusi marathon. Social and recreational opportunities are important for communities and South Africa offers some of the best locations for these world class events. FNB Wines 2 Whales is a three day mountain biking event that runs from the magnificent Lourensford Wine Estate in Somerset West to Hermanus in the Western Cape. The 2016 inaugural Cape Town 12 Onerun “celebrates the vibe, the beautiful city, the people” and prides itself on uplifting the communities and small businesses along its route, which ends at the magnificent FNB Portside building. The Johannesburg Heritage Foundation will benefit from this year’s inaugural FNB Joburg 10K Cityrun and will pass iconic landmarks such as Constitution Hill and the Nelson Mandela Bridge. FNB Business also has a very active volunteers programme that works with the FNB Social Responsibility Fund and regularly contributes to charities, schools, healthcare and outreach centres across South Africa. [11/13]

Winning in business

Businesses are focused on their industries and achieving growth and profitability, there is significant pressure from new entrants, markets are usually complex and their customer’s needs are constantly changing. They need a bank that will partner with them to provide bespoke financial and value-adding solutions, delivered by people that understand their business and which is enabled by reliable technology. FNB Business Banking has highly experienced management teams executing a well articulated strategy to achieve this at all levels. It’s what drives success year after year and what you will find week after week around any FNB board room table, sales and products teams, ops areas and IT projects. It’s a strategy that empowers sales teams, proactively manages emerging regulation, strives for straight through processing and ensures customer’s expectations are well managed even when process hand-offs are unavoidable. It is the achievements of our customers that really motivates us; their success is our success. [12/13]

Tradition and values

Although built on entrepreneurial principles, the FirstRand family is also rooted in a values-based work ethic. The brand promises which are behind of all its franchises benefit from the collective strength of being a trusted, iconic and proudly South African enterprise. This spirit of doing right extends to everyone, especially the 4000 employees of FNB Business Banking whose executive leadership teams ensure a consistent, daily focus on putting their clients first in every interaction; from marketing and sales to service and delivery. Core values of pride, accountability, innovation, Ubuntu and respect guide business decisions and dealings with all stakeholders. As the oldest bank in South Africa, FNB’s 175 years is a proud and long-standing tradition of serving the people and businesses of its communities. FNB Business Banking pays tribute to FNB’s humble beginnings in 1838 and the journey of growth since then to its most recent success in 2016. [13/13]

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