Consumers became more comfortable with managing their estates online as Covid-19 deaths increased.

This article first appeared on Business Day

Consumer behaviour across the world is rapidly evolving. Consumers are more familiar with and more comfortable handling their financial matters online and this has resulted from Covid-19 pandemic confining people to their homes as restrictions and hygiene protocols have limited human contact.

South African banks have reported that as our Covid-19 lockdown continues, a record number of customers have adopted and embraced digital transactions. South Africa’s fastest growing bank, Capitec, has 13 million digitally engaged, branchless customers. Digitisation is not only being driven by the Covid-19 pandemic, but by the youth who are demanding digital solutions to everyday interactions.

The Mastercard Economic Institute’s “Economy 2021”, a global outlook report providing detailed analysis of the economic impact of COVID-19, states that there has been permanent change in digital consumer spending habits and growth of online banking.

Technological innovations are also facilitating financial inclusion by connecting consumers to small businesses and micro-merchants. “The opportunity for fintech disruption is high in Africa, with digitisation enabling financial inclusion in emerging markets,” the report says.

It’s certainly true in South Africa’s case and as a fiduciary technology company, we’ve found this to be true.

Massive increase in demand for online Wills

Last year, online Wills platform, reported a significant increase in demand for Wills during the Covid-19 lockdown. SmartWill saw a 250% spike in the number of Wills taken out via its platform since the start of the COVID-19-induced lockdown.

And the trend has continued with an upward trajectory. There has been a 500% year-on-year increase in Wills activity on the platform between April/May 2019 and April/May 2020.

One year on and where we are right now compared to last year is like night and day. Right now, we are 70% ahead on sign-ups with people completing Wills compared to lockdown.

In addition, more than half of users that are engaging on our platform are not English first-language speakers. For the lower-earning population groups, mobile phones are the connection point to the world and Covid-19 has enhanced their digital engagement skills. It’s imperative for companies to have mobile-friendly and online business solutions for rural and city users.

Much needed change

Since 1940, not much has changed in the financial services and insurance industries in South Africa until fintech and tech entrepreneurs came along in the last five to 10 years.

This has forced the financial services industry to put technology at the forefront of their business strategies as they provide digital-first products that lead their interactions with customers.

Fintech disruption is also spurring on smart partnerships, rather than ownership-based models with established financial services companies harnessing the power of digital technologies to rethink and reshape their business models and the way they interact with customers.

With financial sector ‘outsiders’ helping to build mobile and online payment solutions, consumers are starting to experience that financial services doesn’t have to be a threatening engagement, but one that is straightforward and seamless.

In a Covid-19 world, consumers and clients have become partners and smart business partnerships have delivered cost-efficiency, convenience and consumer-centric products to digital users. This has required forward-thinking on collaboration, an appetite for risk and an entrepreneurial mindset.

Covid-19 has given consumers the gift of financial inclusion

News24 reported in March that Covid-19 pandemic killed almost 130,000 South Africans, if so-called excess deaths are included, and South Africa’s big insurers reported large increases in their death claims.

New numbers from the Association for Savings and Investment South Africa (ASISA) have shown that the life industry recorded 434,216 death claims in 2020 – almost 40% more than the 317,442 claims received in 2019.  

The SmartWill platform has also seen a notable increase in members who have recently signed up for a Will that have then passed on. Our teams are seeing high-risk, older individuals passing away months after drawing up a Will. They weren’t ill at the time of drawing up their Wills and they hadn’t contracted Covid-19, but thank goodness they did make the choice to leave their families in a better position.

The key point is that consumers should not delay in using the digital solutions on offer to take care of their financial affairs. Having a Will in place is the first step to taking care of your financial matters and providing financial stability in a time of great need. If you already have a Will, are you sure that it’s valid, and have you updated it recently?

If you become sick and only sign your Will then, you may not be deemed to be of sound mind, which is a prerequisite for drawing up a validated Will, so don’t wait until you get Covid-19.  Remember, there’s no guarantee of time. Do it while you’re well.