Despite an upsurge in digital banking and mobile application-based transactions, research shows a preference among South Africans for cash and in-person interaction at banks.
This is according to a new report, The Future of Retail Banking in South Africa 2022, released this week by Discovery Bank and Boston Consulting Group, which highlights the trend – and the strength of South Africa’s financial services sector compared to regional counterparts.
An excerpt from the report reads, “More than half of consumers surveyed (51%) cited that they “prefer talking to a person” as their top reason for visiting a bank branch. Furthermore, 31% of South Africans still prefer some human interaction, particularly those over 35 years of age.”
Although a large percentage of South African consumers “appear ready to embrace digital banking,” the “population as a whole is still at least partially reliant on cash” for transactions. Remittances from South Africa have also been found to be mostly based on cash.
“Over 95% of people said they withdraw cash at least once a month. However, 14% of South African consumers said they don’t rely on cash for their transactions, while 57% said they use cash now but are willing to consider alternatives,” the report stated.
Approximately 29% of those surveyed said they would not be comfortable with a cashless society.
South Africa, which has sophisticated banking institutions that continue to push a digital agenda based on mobile and digital transactions, contactless digital and physical cards, among others, continues to struggle with a move towards a entirely cashless society.
The report notes: “There is an issue of critical volume and as long as a significant percentage of the population uses cash, it will not be possible to move to a cashless system.”
It also highlights that “in a number of cases, banks are behind the curve” in terms of readying up their platforms for entire migration to digital and mobile.
Many South African banks also prefer personal on-boarding, with prospective clients opening bank accounts mostly required to visit physical branches.
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