COMPETITOR BRAND ACTIVITY
The financial services industry witnessed various developments between June and mid-August 2024, marked by strategic restructuring initiatives, impactful partnerships, innovative marketing campaigns and financial outcomes.
Momentum Metropolitan experienced a 20% increase in new business value, driven by a favourable mortality experience, strong investment income and a shift to a risk-free discount rate for premium calculations. In contrast, Nedbank reported mid-single-digit earnings growth for the first half of the year, impacted by a challenging economic environment and cautious lending practices. Meanwhile, Capitec foresees its headline earnings for the first half of the year to increase by between 25% and 35% increase in headline earnings, driven by improved credit impairments and robust non-lending income.
Strategic restructuring and realignment were also prominent during the period, illustrating how financial institutions are realigning their strategies to enhance profitability and market positioning. Liberty Holdings announced the closure of its health business after sustained losses, while Bidvest announced plans to concentrate on its core businesses by divesting its financial services arms, including Bidvest Bank and FinGlobal. Meanwhile, TymeBank continued its ambitious expansion, targeting unicorn status with a $125 million capital raise, while also focusing on targeting South Africa’s middle class through new product offerings and partnerships.
In addition, partnerships played a vital role in expanding service offerings and engaging customers during the period. Metropolitan teamed up with Uber to tackle youth unemployment by offering free rides to job seekers, while Liberty partnered with the popular podcast series “What’s Next with Aki” to educate consumers on insurance processes. Santam launched the “Insure Your Future: Money Podcast”, hosted by personal finance experts aimed at helping consumers manage their finances. These initiatives highlight the industry’s commitment to addressing social issues and enhancing financial education through innovative collaborations.
On the marketing front, companies like Coronation and Naked Insurance launched campaigns that resonate with consumers in a more meaningful and contemporary way. Coronation’s new campaign emphasised the importance of early investment for long-term financial security, while Naked’s humorous “Lose Wait” campaign underscored the frustration with outdated service models, promoting a faster, fully digital insurance experience.
COMPETITOR PRODUCT ACTIVITY
The digital landscape in South Africa’s financial services continues to rapidly evolve, with significant strides made in both innovation and product offerings.
Liberty’s Stash app exemplifies this trend, achieving R1.5 billion in savings contributions since its inception in 2017, highlighting a growing appetite for digital savings solutions among younger demographics. Mama Money’s new WhatsApp-integrated bank card further highlights the move towards digital convenience, offering accessible banking solutions for underserved communities. Meanwhile, Capitec continues to enhance customer value through its Live Better rewards, offering substantial savings and cashback via its banking app. Additionally, MiWayLife’s new online platform for life and funeral cover, as well as Payflex’s new Pay in 3 feature highlight the industry’s commitment to providing flexible, user-friendly digital solutions that meet the evolving needs of consumers.
In parallel with these digital advancements, financial institutions are also prioritising other product launches and enhancements to maintain their competitive edge. Bidvest Life’s enhancements to its FMI Individual product showcase a strategic response to client demands, introducing new benefits and options that cater to a broader audience. Similarly, Absa’s introduction of merchant cash advance loans through a partnership with Preference Capital highlights the bank’s focus on supporting small businesses with tailored financial products.
Furthermore, research indicates a shift in consumer preferences, especially in the life insurance and health insurance sectors. Discovery’s research revealed a significant shift towards life insurance policies that pay out in US dollars, while Momentum experienced heightened demand for its low cost primary health insurance products, a trend fuelled by the increasing cost of traditional medical schemes. This trend has spurred FNB to partner with Oneplan to provide affordable health cover from R250 per month to FNB clients. Discovery Vitality is also adapting to changing consumer preferences by shifting its retail partnerships from Pick n Pay to Checkers and updating its reward structures to better align with customer shopping habits.
COMPETITOR INDUSTRY ACTIVITY
Significant developments in job restructuring, labour negotiations and infrastructure investments remained prominent across various industries.
In the mining and automotive sectors, Sibanye-Stillwater announced the retrenchment of 2 000 employees as part of a broader restructuring effort, while Mercedes-Benz South Africa announced plans to potentially reduce its workforce by 700 due to a shift reduction in its East London plant. On a more positive note, ArcelorMittal South Africa has reversed its decision to close its Longs Business division, potentially saving 3 500 jobs.
Labour unions have also been active in addressing workers’ concerns, with Numsa securing a R20 000 payment for striking Ford workers and negotiating an above-inflation wage increase for Gautrain employees. However, dissatisfaction persists among municipal workers, as Samwu criticised Salga’s latest 3.75% wage hike offer, arguing that it falls short of addressing the rising cost of living for municipal workers.
In terms of infrastructure, significant investments and discussions are underway. Transnet engaged in talks to enhance its rail link for the automotive sector, while Cape Town secured R3.5 billion for infrastructure projects aimed at creating jobs and improving public services. In addition, the Eastern Cape Development Corporation launched a R50-million automotive finance scheme for SMEs, while Deputy President Paul Mashatile called for private sector investment in SAA to revitalise the struggling airline.
