FNB’s new answer to South Africa’s financial crisis

FNB has announced the launch of its new online financial education hub, Fincents, amidst the country’s financial literacy crisis.

The company described this as an effort to ramp up consumer education efforts and improve financial literacy outcomes among South African communities.  

The website, which is open to all South Africans regardless of which financial institution they bank with, features free registration and access to micro learning modules, articles, videos, and other content formats to empower users with financial education. 

In a media event hosted on Thursday, 8 May, the FNB’s Personal Segment CEO, Lytania Johnson, outlined South Africa’s severe financial literacy crisis.

According to an FSCA Financial Literacy Baseline Survey, 48% of South African adults struggle with basic financial literacy. 

Johnson also shared that 86% of economically active adults in South Africa do not have a retirement plan.

She explained that this is why FNB viewed it as critical to open up the bank’s capabilities and expertise to empower South Africans from all walks of life with “potentially life-changing financial knowledge”. 

FNB’s data shows that consumers tend to have specific and apparent financial education needs, such as access to content that relies less on complicated financial language and terminology.

“Our data shows that South Africans have general fear and anxiety when it comes to the topic of personal finances,” Johnson said. 

“Moreover, consumer education data also shows that financial information is not always easily retained by individuals after a single interaction.”

“As a result, to enhance knowledge retention, education efforts need to be centred on addressing these challenges in an appropriate and easily digestible manner.”

FNB Consumer Education programme manager Dhashni Naidoo said FNB tailored the content and information available on the Fincents website to meet these requirements by offering users core financial education support. 

“Our team tapped into its experience working in communities across the country and partnered with digital content experts to craft an interactive learning platform that allows users to learn through storytelling, quizzes, and contextual content,” she said.

“We’re actively exploring including content around additional subject areas like homeownership, vehicle finance, cryptocurrency, and more.” 

Retirement time bomb

FNB’s new products and similar offerings from other financial institutions in the country come amidst a significant personal finance issue in South Africa.

The 10X Investments Retirement Reality Report for 2023/24 recently showed that only 6% of the country’s population is on track to retire comfortably.

The report is based on the 2023 Brand Atlas Survey findings, which measures the lifestyles of 15.4 million economically active South Africans living in households with a monthly income of more than R6,000, aged 16+, with internet access.

The survey found that there has been little fundamental change in South Africans’ inclination or ability to plan for retirement compared to previous reports.

Even those who have planned are not confident that they are on track to be able to support themselves for the long term, considering inflationary pressures and the economic climate.

“The difference between what South Africans expect their retirement to look like and the realities faced by those in retirement and approaching it cannot be underestimated,” said 10X Investments CEO Tobie van Heerden.

About half of the respondents with a retirement plan indicated that their plans were “probably” or “definitely” on track, with some variation across age groups.

Significantly, 29% of people over 50 indicated that their plans were “definitely not” or “probably not” on track, which is concerning given that they have little time left to build up their savings.

Van Heerden explained that knowledge and information are key to closing the expectation-reality gap, and it is in South Africans’ long-term interests to be better informed on the importance of saving.

This echoes statements made by Johnson, who said financial literacy is not only critical on an individual level, but also critical for families, communities, and the broader economy,” she said. 

“And, by opening the platform up to all South Africans, FNB hopes to be able to play a critical role in improving the quality of financial inclusion, increasing financial wellness and financial stability among vulnerable members of our communities, and empowering them to secure their financial futures.”