When Gerrie Fourie joined Capitec Bank in 2000, there were fewer than 10 people on staff – all of them founders. But he sensed enormous opportunity in the South African banking sector and the chance to build something special.
"I always wanted to be an entrepreneur," Gerrie tells The CEO Magazine. "So the fact that we were going to build it from scratch, that really excited me. And that’s basically why I joined – that passion to grow."
By any measure, Capitec Bank has grown enormously, becoming a runaway success in South Africa and establishing itself as a banking innovator with a reputation for low fees and customer service. It’s continuing to expand more than two decades after its founding, adding customers in retail and digital banking and expanding into business banking with the 2019 purchase of Mercantile Bank.
Gerrie joined on the operations side, overseeing Capitec Bank’s branch network before being promoted to CEO in 2014. Fast growth has been a constant, along with a "passion for the customer", Gerrie says. That growth pattern is set to repeat itself as Capitec moves into business banking.
Capitec has moved from being a very small branch network with 850 clients, to now serving 18 million clients, with over 10 million clients on a digital base.
"Capitec has moved from being a very small branch network with 850 clients, to now serving 18 million clients, with over 10 million clients on a digital base," he says. "Over two years ago we acquired business banking, and we’re starting to apply that same passion of being entrepreneurial, innovative and client-focused to really drive it now."
Capitec Bank has thrived amid tumult in South Africa and during the global pandemic, which hit the country especially hard. The bank has grown by 16 per cent since February 2020 and added more than 4.3 million customers. Gerrie attributes this success to the bank’s strong customer focus, savvy planning and as the heroic response of bank staff amid the COVID-19 crisis.
Simple and transparent
"When COVID-19 happened, we had to re-establish what our client focus areas were; what was important for our clients, our people? And then on our delivery side, we had to work out how we could deliver this," Gerrie says.
"If you look at things now, COVID-19 is still there. So businesses need to be agile, they need to be flexible and be able to action this quickly. We will continue operating on that client base and see how we can we add value to them and create a value proposition that’s very simplistic and transparent."
Simple and transparent are tenets for Capitec Bank as it keeps its products, banking plans and fees straightforward, affordable and easy to understand. This approach has won over customers in droves.
A lot of people in the financial world makes things too complicated and the client doesn’t really understand it.
"A lot of people in the financial world makes things too complicated and the client doesn’t really understand it," Gerrie says. "Then you have not only confused them but actually killed the opportunity for word of mouth, because if you really understand something, you will tell your friend about it. If you don’t understand it, you won’t tell your friend about it."
The customer focus sits at the heart of all of Capitec’s actions, including its financial planning and planning for the next year, according to Gerrie.
"We normally ask ourselves, ‘Where’s the market? Where’s the client? What does the client want? And where do we want to go?’" he says. "Then you ask yourself, ‘In five-to-10 years, where should I be?’ And then you start working that back to your short-term goals, your strategies and things like that you can implement."
Understanding is key
Strategy is another focus for Capitec Bank, along with ensuring its 15,000 employees are fully informed of its importance.
"If they understand the why and what you want to achieve, people will then deliver. But if they don’t understand the strategy, then there’s always confusion and there’s not alignment," Gerrie says.
"You need to spend quite a lot of time on making certain that people understand the different strategies and that they can understand how strategies are actually linked together."
Employees play a key role in Capitec Bank’s success. Those who have worked for the company for three years can become shareholders, according to Gerrie. And Capitec will depend on its staff as it confronts the challenges of a post-pandemic world.
The world economy risks falling into recession with high inflation and supply chain difficulties. And there’s the perpetual challenge in South Africa of moving people from cash to digital payments, Gerrie says.
He also cites the need to strike a balance between working from home versus coming into the office, post-pandemic.
"If you want to create a culture, if you want to brainstorm, if you want to develop people, you need to be in contact with them, you need to connect. So how do we get that balance right?" he says. "I think the companies that are going to be successful going forward are the companies that get that balance right."
We normally ask ourself, ‘Where’s the market? Where’s the client? What does the client want? And where do we want to go?
But he’s also optimistic about the Capitec Bank as it continues capturing market share in South Africa and moving into business banking. Mercantile Bank will be rebranded Capitec Business Banking – a process postponed by the pandemic.
There’s also the process of "optimising the 18 million clients" served by Capitec Bank. To accomplish that goal, Gerrie stresses that "the whole company in totality is client-centric and really eat, love and drink the client".
"Every conversation in the bank starts with the client," he says.