How contextual funding works for clients

With contextual banking, Capitec can engage better with our clients and provide more relevant solutions that align with their individual needs. 

Contextual banking and funding/credit is enabled by cloud computing, artificial intelligence and application programming interfaces (APIs) that allow us to create smart, automated experiences for our clients. This technology allows us to partner and collaborate with other service providers and fintechs to enhance our offering with solutions that fit our clients’ needs and current situation.

Credit for the right reasons

Our clients are our number one priority as are our people. A few years ago we drew a line in the sand – we decided that if we want to enjoy our jobs more, we have to make sure that our clients apply for credit for the right reasons. We have to ensure that we have a purpose-driven credit process and products.

We know many people are using unsecured credit for more purpose-specific lending solutions (e.g. home improvements). 

Unsecured credit solutions, in most cases, are a bit like walking into a store to buy a suit for a wedding. The store sells suits – they are all the same colour and the only choice you need to make is what size you want. This might be simple, affordable and easy, but it does not take your needs into account.  

Our vision for credit is more like visiting a personal tailor who can make a suit that fits your body shape and size. They do this by collecting data, such as taking your measurements, and asking questions to understand what you need a suit for. Based on your preferences and the context, the tailor can make a suit just for you that not only fits you well, but is also perfect for the function you are attending. 

Capitec always wants to be sure that the credit we provide goes towards a clear and specific need – especially with larger amounts – rather than an unknown expense. It is extremely important that our clients, and all South Africans, use credit for the right reasons and that consumption credit (using credit for everyday expenses) is minimised. If a client then doesneed funding in an emergency, we can give them credit without getting them into financial trouble.

Money and data

Contextual funding requires us to weigh up a client’s obvious need – funding – with the need to protect them, something clients could overlook when under pressure. This is where data and having an overview of a client’s financial and social situation – the context – come into play.

We follow the guiding principle of treating clients’ data as our own as we manage and protect their money.

While we encourage clients to share their data with us as it will save them money in the long run, the choice remains theirs. The more data a client has shared with us, the greater the returns for them when they apply for credit as well as during the entire lifetime of their credit facilities with us.

by Jaco Carstens