Nedbank to reward customers who display responsible financial behaviour

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South Africa’s Nedbank could pay off mortgages or fund holidays for a small number of customers that exhibit good financial behaviour under its revamped rewards programme, its head of loyalty and rewards Dharmesh Bhana told Reuters.

Its Greenbacks programme was overhauled this year as the country’s biggest lenders step up efforts to win and retain customers following the launch of a number of upstart banks.

Around 600 000 people are using Greenbacks and the numbers are growing rapidly, Nedbank said.

The kinds of behaviour it will reward include the use of cards rather than cash, responsible borrowing and saving.

“It’s in our interest to make sure customers manage their money well,” Bhana said, adding the bank wanted to differentiate its programme from the standard, points-based models already widely available.

As well as standard offerings such as deals and vouchers, a small number of customers will receive rewards linked to the specific behaviour encouraged, for instance, a refund on a mortgage or other loan which the customer regularly pays on time.

Banks around the world are scrambling to shore up loyalty as new digital lenders and fintech firms threaten their customer bases. HSBC has started offering financial advice, for example.

In South Africa, where a number of upstart lenders have launched in the past year, FirstRand, which runs the country’s biggest retail bank by market share, is also developing a money management offering.

The responsible borrowing element of Nedbank’s programme, which is yet to launch, will cap the amount that can be doled out to customers at 1.5 million rand ($101,000) per quarter, with one customer getting a pay back in each period.

In the future, customers that successfully save under the programme could see Nedbank fund whatever it is they were saving for, such as a holiday, or offer foreign currency for their destination. Though this is still being developed and may work differently.

It is also planning to introduce a part of the programme centred on rewarding customers via interest rates and fees, Bhana said.