Mutsa Chironga
The challenging economic landscape of recent years has left many individuals and families grappling with the effects of rising food inflation, fuel prices, and interest rates. These pressures have eroded the discretionary income that once allowed many middle-market South Africans to enjoy their desired lifestyles. To add to the burden, continued and increasingly intensive load-shedding has forced many people and households to invest in energy security measures like inverters and full solar backup systems, further straining their financial resources.
Against this backdrop, the role of banks has undergone a significant transformation. It is no longer enough for banks to function merely as transaction facilitators; they need to evolve into creators and providers of genuine and meaningful value for their clients.
However, it’s not up to banks to decide what constitutes such value on behalf of their clients. Instead, it is crucial for banks to empower their clients to define value on their own terms by listening to them carefully. A prime example of this client-centred approach can be found in the value-based banking underpinning Nedbank Premium Banking. Nedbank deliberately chose to undertake its journey to deliver meaningful value by listening to clients through surveys aimed at fully understanding what value-based banking means to them. The results of these surveys were definitive, and somewhat unsurprising given the current tough economic conditions. When asked what reward type, they would most value, an overwhelming 81% of middle-market South Africans said ‘cash’. The clients spoke and said give us cash, and that’s what we did!
In response, Nedbank Premium Banking decided to include membership of the Nedbank Greenbacks rewards programme as part of its packaged offering. This enables clients to earn up to 2% unlimited cash back on all payments made with their Nedbank American Express® cards. It’s South Africa’s most generous unlimited cashback offering and, uniquely, it applies equally to spend on Nedbank Amex Debit Cards and Credit Cards.
While 2% may seem modest, it can make a substantial difference, especially considering that these cards are accepted by all major grocery chains, and groceries account for around one-third of most households’ monthly expenses. Add to this the fact that South Africa’s food inflation remains stubbornly high, and the value is significant. For example, a household spending R10 000 per month on groceries and earning the full 2% cashback will save R2 400 a year on their grocery bill alone. In other words, if food inflation is 6%, the cashback offering means Nedbank Premium Banking clients can reduce it to 4%.
Nedbank Premium Banking’s client-centred approach to value creation extends beyond financial rewards. Built on the innovative MiGoals Premium Account, the offering is designed to help clients maximise their money and achieve their financial aspirations. The extensive list of services included in the MiGoals Premium package, priced at just R240 per month, recently resulted in Nedbank Premium Banking being recognised by the Solidarity Research Institute (SRI) as providing the best value-for-money packaged bank account for mid- to-high-income clients. From free digital banking, free cash withdrawals and deposits, monthly fees being included if you have a platinum credit card, an overdraft facility and Greenbacks membership to domestic airport lounge visits, discounted flights, and competitive home loan benefits, the focus remains on providing value that matters to each client. What’s more, seniors, young graduates and spouses of MiGoals Premium Accountholders receive 50% off the monthly maintenance fee of their MiGoals Premium Account.
In a world where financial pressures are mounting and the expectations placed on banks are higher than ever, it is imperative for financial institutions to listen to their clients and deliver value on their terms. By doing so, these banks will be effective in fostering deeper and more meaningful relationships, which will better position them to help their clients navigate the challenges of the current economic landscape and build more secure financial futures which, in the realm of banking, is undoubtedly the pinnacle of real value.
Mutsa Chironga is Managing Executive: Nedbank Consumer Banking. He writes in his personal capacity.
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