When the South African Post Office's Postbank becomes a fully registered bank next year its main competitor will be Capitec Bank.
Products and services for the unbanked and "under-banked" were developed after careful research into their needs, said Shaheen Adam, who was recently appointed Postbank's chief operating officer.
Adam, a former director at Standard Bank's personal customer division, said Postbank intends to expand its product range once it has a full banking licence. Products will include unsecured loans to those who qualify. She said Postbank contributed roughly 33% of the Post Office's income.
Faizal Moolla, an analyst at Avior Research, predicts an "uphill road" for Postbank, which boosted the Post Office's latest annual results by R4-billion and showed an increase of 9.1% in depositors' funds from the year before.
Even though Postbank has the largest footprint in terms of distribution outlets, it lags in providing the right banking products, said Moolla. Legislation defines Postbank as a deposit-taking institution - it only offers savings accounts, transactional accounts and investments.
Postbank has about 2500 outlets, but it has no ATMs. It is formulating a strategy to address that.
Moolla said another option would be to share ATM infrastructure with other banks or copy Capitec's model whereby customers can withdraw cash at retail stores.
Matthew Warren, a banking analyst with First Avenue Investment Management, said that for the bank to win clients from the private sector it would have to be very aggressive.
"The way that [Postbank] can disrupt the market is to offer substantially cheaper products, but ... that sounds like a money-losing situation."