To his customers, Christo Davel is a revolutionary. “Customers” might not be the right word. To his fans, Davel is a revolutionary. He may not have invented the concept of online banking, but when his 20twenty online bank was launched in SA more than a decade ago, Davel was hailed for standing up to the big banks who have less respect for their customers than the Soup Nazi on a bad day. The premise of 20twenty was to offer value to customers and make their lives easier. It developed a loyal following more like that of a sporting team than a bank. Its customers stuck with it when its “bricks and mortar” bank Saambou went bust and its future was blowing in the wind. They rated it far better than customers of the big banks rated their online services. They were committed until after Standard Chartered bought it, integrated it and eventually ditched it.

To the banks, Christo Davel is a perennial pest. Who wants someone to come in and shake up a conservative oligopoly used to charging exorbitant fees for basic services? 20twenty offered fanatical customer service and value for money – unwelcome competition for the banking royalty. The idea behind his new venture, 22seven, is to help consumers get a hold of their spending and save them money. It’s a great concept for those of you (the author included) who are as wise as a goldfish when it comes to managing your finances. But for banks that get off on charging fees and interest that could be avoided if we took the time to give a damn (as 22seven is trying to make us do), it’s not so great. Then there’s also the issue of the banks releasing their own versions of 22seven that makes things a little awkward right now.

With this in mind, 22seven was relieved this week when First National Bank announced it would cooperate with the information collating service provider, Yodlee. 22seven relies on Yodlee, a US based company that works with a number of large online financial services, to access the financial accounts of its users and “scrape” information from the surface and send it to 22seven. 22seven then uses the data to display a user’s spending habits in uncomfortably revealing (for this author, at least) charts, tables and diagrams. The idea is to help us learn about our spending, teach us to be more responsible and help us achieve our goals, explained Davel at the product’s launch.

The problem is that 22seven is a third party service requiring users to enter their usernames and passwords – yep, all those pet names, favourite sportsmen, jumbled initials and birthdays you were told to hold on to. That security risk, which is minimal but real, and the fact that Davel is the annoying shaker-uper of banking and financial management, means banks may deny Yodlee access. 

FNB, along with Absa, Capitec, Nedbank and Standard Bank, had issued warnings to its customers if they’re to use 22seven, but on Tuesday it explained why it would acquiesce and allow customers “limited access”. “FNB has set a precedence of responding to our customer’s needs with innovative products and services. We are now providing a secure means to engage with 22seven in response to our customers’ need to learn more about their financial behaviour,” said Lee-Anne van Zyl, FNB CEO of online banking.

Van Zyl said she was committed to helping FNB’s clients manage their money and the bank had changed its tune after finding a more secure option to releasing full account details. It has advised customers to set up a secondary user on their online banking profiles with a separate user name and password. In this profile they can select which accounts to share and activate “view access” only, limiting “the exposure of client information to transaction history, balances and account numbers,” said Van Zyl. Davel welcomed the move, but 22seven still faces hostility from other banks.

Within a week of its launch, Absa decided to block Yodlee from accessing its customers’ accounts, meaning they can’t use the financial management service. Absa’s head of digital banking Christo Vrey defended the move, saying customers who give their login information to a third party are violating the bank’s online terms and conditions. Vrey said if Absa was going to allow Yodlee access its customers’ accounts, it would only be after a lengthy discussion phase with 22seven, something Davel admits didn’t happen.

It seems obvious to get the banks on board before the launch of a product that will access customer accounts, and Davel is often asked whether he did. “No, a lot of people ask me that. Imagine you were going back to a bank and said, ‘Hi, look at me. I’m the guy that took you on 20 years ago. I’m going to reduce your customers’ debt’.” But one wonders whether engaging them might have made a difference. While Absa blocked the service, Capitec, Standard Bank and Nedbank all issued stern warnings about releasing account information to third parties.

One reason Absa doesn’t want to work with 22seven is that it plans to release its own online financial management service soon; another is security. In January, Absa clients were far and above the chosen target by phishing scammers. Phishing refers to attempts to defraud online account holders of their financial information by posing as a legitimate company. Absa was targeted more than twice as many times as fraudsters’ second choice, FNB. There are also lingering technical doubts as to how safe it can really be to hand over your financial details to anyone, even a responsible institution.

But after Absa’s announcement, Davel was incensed that 22seven was lumped into the same category as phishing scams. He accused the bank of engaging in FUD (fear, uncertainty and doubt) tactics, the propaganda tool of spin-doctors. Later, he said he shouldn’t have said it but was still against how the matter was handled. Davel said he is also a bank customer and supports attempts to warn the public about scams, but 22seven is a recognised company with blue chip investors and should not be compared to a phishing scam. 

FNB’s announcement is a positive sign for 22seven, but Absa still won’t cooperate, and Nedbank, Standard Bank and Capitec have renewed warnings about releasing financial details. 22seven has pointed out that similar start-ups launched overseas initially received an icy reception but with time were accepted by the financial institutions.

FNB’s change of heart came after Davel’s team engaged the bank, but, he says, Yodlee are “leading the charge” to sway South Africa’s other big banks. “That’s what they do well. They have engaged with regulators and banks across the world. That’s why we chose to work with them,” said Davel. “I’m confident it will be resolved.”

Asked if there are parallels between how 20twenty and 22seven have been received, Davel answered, “They didn’t like us then. But then that was direct competition… This is something completely outside banking.” But with the banks planning their own online financial management products, Davel is back in the firing line. “It’s clear it’s a very active space and in the end I predict what happens is the customers will choose: will they get better value for money using the banks or an independent service?”

So it appears Davel has renewed his status as the perennial pest of SA’s banking industry. It’s too early to see whether he’s developed a new fan base, but is he happy with 22seven’s success so far? “Yes, oh yes.” The next question is can 22seven find more stability than Davel’s previous venture, 20twenty? DM

Read more:

• Christo Davel: SA’s serial entrepreneur returns with 22seven in Daily Maverick.
• FNB changes tune on 22seven in MyBroadband.
• Would you trust this man with your money? Again? in Brainstorm.
• Kicked in the teeth in Brainstorm.

Photo: Christo Davel is shaking up SA’s banking system once again. SYDELLE SMITH.