8 years is a long time in cryptocurrency

FNB is the first bank to allow customers to invest in crypto assets through its established share-trading platforms, enabling them to invest in Bitcoin as they would in Shoprite. 

While FNB is known for its entrepreneurial spirit, dipping its toes into the world of cryptocurrencies is a big step for South Africa’s oldest bank. 

Its former CEO, Jacques Celliers, famously said in 2018 that the bank does not trust cryptocurrencies and would not put Bitcoin anywhere near FNB’s systems. 

“The reason why we don’t put blockchain or Bitcoin on our systems today is that I cannot associate my brand with it yet. It is as simple as that. I cannot trust it,” Celliers said. 

“It is not a technology challenge, it is not a data challenge. We have more capabilities than anyone. It is a challenge of trust.”

Eight years later, the bank is the first to fully integrate crypto asset investing into its share-trading platforms. 

“Effectively, what has changed is the environment. It has evolved significantly from regulatory standards and compliance to the way we monitor crypto,” FNB’s head of share investing, Sebastian Pillay, told Daily Investor. 

“If you look at the way we have enabled crypto investing. It is purely fiat in and fiat out. We have gone with a very conservative and prudent approach.”

Pillay explained that when Celliers made those comments, there were no regulations, no licensing of trading platforms, and no certainty of how crypto should be taxed. 

All these changes have enabled FNB to manage the risk associated with offering crypto investing on its platform. 

This has been coupled with rising demand from clients for crypto investing through a banking platform as opposed to a separate trading app. 

“We have had to study our client behaviour. We now have the data to understand whether clients are looking for the solution or not looking for it<” Pillay said. 

“The data has told us over the past few years that clients do want a solution, and that is why we have come to market.”

A first in banking

Pillay said the offering has taken FNB two years to develop in partnership with VALR to ensure proper compliance and safety. 

However, it has also taken this long because FNB is doing something no one else has done: integrating its crypto offering into the banking platform. 

Other institutions, such as Discovery and Capitec, offer crypto trading through their banking apps, just as they offer share trading via EasyEquities. 

Pillay explained that in these cases, the third party owns the client and their data. In FNB’s case, everything is the bank’s, and they just tap VALR’s services to conduct trades. 

“The clients in those examples effectively have a Luno relationship, and Luno owns that relationship with them, even if the account is opened on the banking app,” Pillay said. 

“We have had to dismantle that relationship. In our case, everything is end-to-end on our side. We just consume the services and make them available to the client.”

“All the information stays with FNB and never goes to the third-party provider. That is very important to note when looking at the two offerings.” 

Pillay believes this gives FNB a distinct advantage over other crypto-trading platforms as the banking platform adds significant trust and safety for customers. 

“Trust is at the centre of what we tried to build here. This is not just a product. It is part of your entire banking value proposition,” Pillay said. 

“The reason a client would choose us is because of trust and simplicity. Clients are also aware of the issues that have surrounded the crypto industry.”

“The best place to look for solutions is ideally your bank. You bank with them every day, you invest with them, and you insure with them. It makes sense to consider buying crypto through that bank.

This points to another major difference with FNB’s crypto offering compared to its peers. It is housed within existing share-trading platforms. 

FNB clients will be able to invest in crypto through its Share Saver, Share Builder, Share Investor, and Share Zero products. 

“This is all about simplicity. The share-trading platform is a digital asset platform. We can give clients access to investments in a digital format that does not have to be just shares,” Pillay said.