Last night I was fortunate to be invited to an information session hosted by banking group Sasfin, where they outlined their new digital initiatives. Here are some of my thoughts.
Who are Sasfin?
Sasfin are a JSE-listed banking group who focus on lending and banking solutions for entrepreneurs. They are a family run business – now into its third generation – and interestingly Sasfin actually started out in the textile sector before becoming a bank.
I’m a small retail investor in Sasfin – I like their focus on empowering entrepreneurs – and the business trades on a forward price to earnings multiple of around 6 and offers a dividend yield of over 4%. Earnings last year took a bit of a hit with one big client dragging them down but overall a solid performer in a tough market.
WIPHold (Womens Investment Portfolio Holdings) has recently taken a 25.1% stake in Sasfin.
Sasfin going digital
As an organisation, Sasfin has never struck me as a “digital” business. They are proud of their family heritage and their ability to have real conversations with real people. When you’re invited to a presentation around a new digital strategy, you attend with some scepticism.
Most people are familiar with Xero, so I am going to focus on the other three in terms of my feedback:
It’s hard to make internet banking “sexy” – but Sasfin focused on a couple of aspects here which I think will be of interest to entrepreneurs:
- They’ve approached internet banking with a “Dashboard” style allowing you to visually track your money and spending habits. You would need to play around with it a bit, but I didn’t get the sense that it was a gimmicky savings app look and feel but rather a fully fledged tool that would allow you to more accurately forecast spending habits
- Their business banking tool included a payroll element to it, something which is ideal for growing small businesses
Bearing in mind that I’m already a small SIPP client, I thought Payabill was one of the most interesting presentations on the evening.
Payabill offers small business finance facilities for businesses turning over as little as R85 000 per month. In effect, they are able to offer debtor finance to SME’s who would not normally have access to this type of funding from banks. What struck me as particularly impressive was the ability to turnaround applications for finance facilities far quicker than if you were applying through a traditional banking channel.
The small business market (Under R12m/year in turnover) is not an attractive market for financial services institutions to service but Payabill have developed a solution worth considering.
There is a lot of debate around what constitutes a “robo-advisor” but for those who are not keen on paying high asset management fees and want to look at a digital investment solution, SIPP is great and a very flexible investment solution.
SIPP stands for – “Self-invested-personal-pension or portfolio” and offers Retirement Annuities, Group Retirement Annuities, Preservation Funds, ETF portfolios and shortly Tax Free Savings Account options.
I was one of the early adopters on this platform and I thought it was slick, easy-to-use and a professional tool for either retail investors, financial advisors or investment professionals.
SIPP was recently acquired by Sasfin with SIPP founder Erol Zeki being appointed to head up the Wealth division of Sasfin.
Sasfin CEO Michael Sassoon made the comment that their ethos is not to “own” a client but rather to provide them with tools to empower entrepreneurs.
A major challenge that surrounds the “entrepreneur” market in South Africa is that there is only a small sliver of it that offers attractive returns in the here-and-now. For the rest, it is a long-term journey of booms and busts.
Sasfin appear to have adopted a long-term view on the growth of the entrepreneur in South Africa and are looking to use tools to identify quality clients earlier and support them into their growth phases.