Banking on future success

Postbank may not be the most well-known bank in South Africa but for many in the country, it is an institution

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Established in 1875, not only is Postbank one of the oldest banks in South Africa, but it is also one of the first to offer savings accounts to South Africans and covers a footprint far wider than any other banking institution in the country, with a specific emphasis on serving rural communities.

The bank has a long, proud tradition of being at the heart of South African savings, offering more Mzansi banking accounts than any other institution. However, in recent times, their partnership with the Department of Social Development has made Postbank even more relevant and a household name.

Over the last year, the decision by the government to move the Sassa social grant payments to the Post Office and Postbank has seen their customer base grow, from 7 million customers to a massive 14.8-million customers including 7.8-million Sassa cardholders who receive their grant money through Postbank.

The bank in itself is unique. Unlike other financial institutions, it is state-owned and has a dual mandate—to be inclusive for all South Africans and, at the same time, be financially sustainable. In fact, the Postbank Act of 2013 specifies its primary focus should be on lower income earning customers, financially excluded citizens and small businesses, underpinning its exceptional role in the lives of many South Africans.

A clear strategy

Manned by experienced banking personnel, Postbank’s strategy has always been very clear, and has always focused on profitability. The Board of Directors comprises of a team of senior bankers with vast experience in retail banking, which has served Postbank well in establishing their footprint.

Although Postbank’s banking license is still pending, having applied for it in 2017, once it is granted, it will allow the bank to move into two areas that would bolster its base—namely lending and bancassurance. The bank will offer loans and funeral plans, something their footprint and base would complement.

But even with challenges such as industrial action and a lack of marketing over the past few years, Postbank has grown its capital to R3.7-billion in reserves, something that has been extremely pleasing for the institution over the last while.

Record-breaking Sassa card rollout

With the Sassa card now firmly in the stable, the future looks bright, especially as Postbank has shown that it could deliver on a project of such magnitude in record time and exceed all stakeholders’ expectations.

“There was a dedicated focus in the Sassa card project. Firstly, we were only granted the contract in the middle of December 2017, and we deployed our product on 1 May 2018, which is not just a local industry record, but a global record as well,” explains Acting Managing Director, Shaheen Adam.

“The Postbank-Sassa success story is used as a case study by our partner, Visa. It took a lot of effort, sweat and tears but we managed to deploy the card in a record amount of time because of the pressures that Sassa was feeling due to the Constitutional Court judgement. It was through working with Sassa and SAPO that we were able to get beneficiaries on board quickly.

“It’s been a phenomenal success as we had onboarded most beneficiaries by the end of December last year, which was an eight-month period. Again, this success can be attributed to the dedication and collaborative efforts of both the Sassa staff and our employees,” Adam enthuses.

Autonomy in decision-making

Postbank separated from the SA Post Office on 1 April this year but remains a wholly-owned subsidiary of SAPO. The benefit sees Postbank having a separate governance structure with a Board consisting of seasoned bankers and gives it more autonomy to work with greater speed.

It was in July 2016 that Postbank was given permission by the South African Reserve Bank to start the bank. The formal application to register the bank was submitted in June 2017. But there have been delays in obtaining the license, mainly because of legislation. The Banks Act had to be amended to allow a state-owned company to be registered as a bank, which was only signed into law in May this year.

The other issue was the fact that the Postbank Act stipulates that it is a subsidiary of SAPO, while the Banks Act requires a bank controlling company as an intervening company between the group structure and the bank.

“In terms of operating as a bank, we’ve done everything we can to operate as a bank. We’ve hired experienced banking personnel, a compliance officer, internal audit and regulatory staff, etc. We have done all the appointments and began operating the systems as a bank.

On the capabilities side, we have largely met the requirements but the hold-up has primarily been in the regulatory space,” Adam says.

Making a difference

In Adam, Postbank has a leader who has vast banking knowledge in various sectors.

A qualified Chartered Accountant with a qualification in Computer Auditing, Adam has established himself as a leader in the field of banking with previous stints at Standard Bank, Anderson Consulting (now Accenture), and with private equity experience in between.

At Standard Bank, he headed up the Business Transaction product area before being promoted to Director in the Home Loans division. His entrepreneurial spirit led him to join African Bank before being lured away to the Chief Operating Officer role at Postbank. The regulatory hold-up meant he has been Acting Managing Director, while the processes around establishing the bank are finalised.

Adam enjoys his role at Postbank, especially “making a difference in the lives of ordinary people”.

“I didn’t have that social construct in the private sector—it was more focused on profitability, but now it is more about providing access to a pensioner in the rural parts of South Africa and for me, that is more fulfilling than just making money.

”We have to be financially sustainable but that is not the be-all and end-all. It is more about making a difference to the people of this country, especially the people who don’t have access to financial services. That is something I enjoy,” he says.

Consultative leadership

In terms of leadership, he sees himself as a consultative and effective leader, who shies away from autocratic decisions.

“I see myself as leading a team, not a group of individuals. I didn’t find individuals in my team who drive their own parochial interests at the expense of their colleagues. We see ourselves as a team and consult as a team.

“The consultative model does not arrive at decisiveness, and I need to intervene now and then to set the tone and say we need to move in this direction. I’ve always had positive feedback throughout my career on my leadership approach because I give people an environment in which to thrive.

“I give people a focus—people need a focus because you can’t work in isolation. There has to be a broader purpose and establishing that purpose is critical. Each person knows the role they play and we work as a team and hold each other accountable. The entire team holds you accountable. The consensus-based approach, with decisiveness, has worked. We’ve been effective because we are results oriented. It is around execution and it is a collective decision.

“I try to lead by example. I live the values and act ethically and honestly. I expect the same from the team as well,” he concludes. 

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