AS part of its ongoing activities, the Monthly Financial Sector Bulletin (MFSB), which I edit, monitors new product initiatives and rates them according to set criteria.
The product which ticks the highest number of boxes becomes the product of the month.
The main objective of this initiative is not only to recognise, but also promote product innovation in the financial services sector, while helping the banking public to understand new products.
Accordingly, the product of the month for March is the POSB Youth Account which had a score of 7/10 together with Chengeto Home Insurance. So how well does this account measure up to our innovation and utility criteria?
Innovation/novelty This is certainly not the first time the youth demographic is being enticed with a tailor-made account. Some years ago, Metbank introduced the MET-Student account which came with a debit card and enabled students to enjoy banking services without withdrawal charges.
For a while now, CBZ Bank has had the CashPlus Teen Savings Account which helps youths to learn how to manage and monitor funds in their accounts through the use of the ATM, their mobile phone and Internet banking.
A few days after the launch of the POSB Youth Account, CBZ Bank launched SmartCash Student, an enhancement of their CBZ Smart Cash Account. POSB has, however, made their Youth Account not just about product features, but part of a broader campaign to empower the youths through financial education, hence the theme “Youth With Direction”, which we see as an attempt to change lifestyles rather than just financial habits.
The launch of the account coincided with celebrations of Global Money Week, an annual global initiative aimed at engaging children and youth worldwide in learning how money works, how to save, improve livelihoods, gain employment and entrepreneurship.
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Financial inclusion Youths tend to be financially excluded because they are not yet independent and still rely on others such as parents and guardians for their needs. So any account that seeks to facilitate easier transactions for the youth demographic pushes the envelope of financial inclusion.
Cost reduction/elimination The youth account does not attract monthly service charges. Additionally, while it does not eliminate transaction costs altogether, it substantially reduces them by delivering banking services through inherently cheaper channels such as CellBank (POSB’s mobile banking operation) and Internet banking.
Just as well, because cost is certainly a very important consideration for youths to whom every cent saved makes a difference.
International utility The account is essentially for local use, but can potentially be used internationally if appropriate enhancements are made. For instance, since it comes with a debit card, this can, through arrangements with international partners such as Visa and MasterCard be used to adapt the account for international use.
However, students have such basic/limited transactional needs that I doubt if such an investment on the part of POSB would be worth the effort.
Convenience “The youth account is an easy and affordable way to start banking,” says POSB, proceeding to ensure that the account is opened instantly; facilitates unlimited withdrawals, comes with a debit card and enables access to CellBank as well as access to Internet banking and ZimSwitch.
These multiple features are intended to provide convenience, something that cannot be taken for granted when dealing with today’s well-clued youths and their generational sense of entitlement.
In any case, this convenience of self-service channels is required because it does not make sense for informed youths to stand in long, winding queues just to access a physical branch when there are more convenient and faster alternatives such as mobile money services.
Employment creation In its current form, there is no conceivable job creating capability of this account since it can still be offered within the bank’s current delivery channels without additional human resource requirements. Maybe if the bank decides to engage agents to sell this account, there can be talk of some employment creation along the value chain.
Collaboration/partnerships An important feature of the youth account is POSB’s membership of ZimSwitch, which allows youth to access the point of sale (POS)S network and purchase goods in retail outlets displaying the ZimSwitch logo.
By extension, it means that POSB is indirectly in partnership with the retail outlets so it can enhance the utility of the youth account by giving the outlets incentives to accept the cards issued to holders of the account.
Tech-savvy credentials Youth today are typically tech-savvy “netizens” or digital natives. POSB is aware of this and attempts to lure them to the account by providing access to CellBank (mobile banking) and Internet banking (online banking) enabling them to buy airtime, check their balances and transfer funds, among other transactional possibilities. Youths today love to be connected, not just some of the time, but most of the time; if not all the time.
POSB has been quite tech-savvy in marketing this product through the use of social media, in particular through its Facebook page. POSB has lined up a number of activations for the youth account, including a smartphone competition, no doubt a language the youth understand well.
Integration with existing products Internally, the account is linked to the bank’s proprietary offerings — CellBank, Internet banking as well as the card management system. Externally, it integrates with ZimSwitch in order to leverage on the POS network.
Scale POSB has a fairly wide distribution network of 34 branches countrywide and through this account could potentially reach out to a significant part of the youth demographic though aggressive marketing will be required.
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