Consumers are now more comfortable with managing their estates online
Consumer behaviour across the world is rapidly evolving. Consumers are more familiar with and more comfortable handling their financial matters online, a result of the Covid-19 pandemic confining people to their homes as restrictions and hygiene protocols limited human contact.
SA banks have reported that as our Covid-19 lockdown continues, a record number of customers have adopted and embraced digital transactions. SA’s fastest growing bank, Capitec, has 13-million digitally engaged, branchless customers. Digitisation is not only being driven by the Covid-19 pandemic, but also by the youth, who are demanding digital solutions to everyday interactions.
The Mastercard Economic Institute’s “Economy 2021", a global outlook report providing detailed analysis of the economic effect of Covid-19, states that there has been a permanent change in digital consumer spending habits and growth of online banking.
Technological innovations are also facilitating financial inclusion by connecting consumers to small businesses and micro-merchants. “The opportunity for fintech disruption is high in Africa, with digitisation enabling financial inclusion in emerging markets,” the report says. As a fiduciary technology company, we’ve certainly found this to be true.
In 2020, online wills platform SmartWill reported an increase in demand for wills during the Covid-19 lockdown, with a 250% spike in the number of wills taken out via its platform since the start of the lockdown.
The trend has continued its upward trajectory, with a 500% year-on-year increase in wills activity on the platform in April-May 2019 and April-May 2020.
One year on, and the difference between last year and this year is like night and day. We are 70% ahead on sign-ups compared to the beginning of lockdown in March 2020.
In addition, more than half of the users engaging on the platform are not English first-language speakers. For lower-earning population groups, mobile phones are the connection point to the world, and Covid-19 has enhanced people’s digital engagement skills. It is imperative for companies to have mobile-friendly and online business solutions for rural and city users.
Since 1940, not much had changed in the financial services and insurance industries in SA until fintech and tech entrepreneurs began penetrating the market five to 10 years ago. This has forced firms in the financial services industry to put technology at the forefront of their business strategies as they provide digital-first products that lead their interactions with customers.
Fintech disruption is also spurring on smart partnerships, rather than ownership-based models, with established financial services companies harnessing the power of digital technologies to rethink and reshape their business models and the way they interact with customers.
With financial sector “outsiders” helping build mobile and online payment solutions, consumers are starting to realise that buying financial services doesn’t have to be a threatening engagement; it can be straightforward and seamless.
In a Covid-19 world, consumers and clients have become partners and smart business partnerships have delivered cost-efficiency, convenience and consumer-centric products to digital users. This has required forward-thinking on collaboration, an appetite for risk and an entrepreneurial mindset.
The Covid-19 pandemic is estimated to have killed about 130,000 South Africans if so-called excess deaths are included, and SA’s big insurers have reported large increases in death claims. New numbers from the Association for Savings & Investment SA show that the life industry recorded 434,216 death claims in 2020 — almost 40% more than the 317,442 claims received in 2019.
The SmartWill platform has also seen a notable increase in deaths of members who had recently signed up for a will, with increased numbers of high-risk, older individuals passing away months after drawing up a will. They weren’t ill at the time of drawing up their wills, but fortunately they made the choice to draw up a will and leave their families in a better position.
The key takeaway here is that consumers should not delay using the digital solutions on offer to take care of their financial affairs. Having a will in place is the first step to taking care of your financial matters and providing financial stability in a time of great need. If you already have a will, are you sure it’s valid, and have you updated it recently?
If you become sick and only then sign your will, you may not be deemed to be of sound mind, which is a prerequisite for drawing up a valid will. There is no guarantee of time. Do it while you’re healthy.
• Hechter is CEO of fiduciary tech start-up Cliqtech.
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