Please select

For My Business

< R10m annual turnover

For My Business

> R10m annual turnover

Please select

For My Business

< R10m annual turnover

For My Business

> R10m annual turnover

Switch to FNB

Do it now!

Corporates + Public Sector

Corporate Public Sector

Your login details have been entered incorrectly

Please note that on your 3rd attempt, your profile will be blocked


Forgot your login details?

This is your third and last attempt available. Your profile will be blocked if you fail to enter your login details correctly.


Oh no!

We've noticed that you've tried to login more than 3 times.

You might have blocked your Online Banking profile.

In order to unlock your profile, reset your username and password.

Invalid username
Invalid password. Please select the show button and try again


The whirlwind has begun

After the all-in body attack that was January 2021, it's clear that the spread of Covid-19 and the associated global economic crisis will be competing for news headlines with eye-opening world events from vaccine nationalism to military coups, unprecedented presidential censures, disputed elections and feeding frenzies from retail investors.

Against this backdrop, we turn to our Chief Investment Officer, Patrice Rassou, to put some perspective on the year past and to highlight the big issues facing world markets in 2021.

Here at FNB, we stepped into 2021 with the outstanding news that we had been recognised as the Global SME Bank of the Year at the recent Global SME Finance Awards ceremony. The SME Finance Forum, which is managed by the International Finance Corporation, is renowned as a knowledge centre for data, research and best practice in promoting small-, micro- and medium-sized finance options. In addition, we have been named the Sunday Times' Best Business Bank in South Africa for the seventh consecutive year.

These achievements underline the innovation of our product and service offering and, as we head into this new year, it remains our aim to continue delivering top-class, world-beating solutions and convenient and secure digital channels.

Of course, relevant and quality advice remain the cornerstone of our offering, which is why we also include an analysis of the recent tax law changes in South Africa, specifically with regards to the country's policy around 'loop structures'. Many of these current changes are linked to government's focus on overhauling the current exchange control environment into a capital flow management system. Our focus is on what these changes mean for you?

Turning to opportunities on the horizon, an exciting inclusion for Africa-focused investors is an article exploring the growing interest in alternative assets and the opportunities inherent on the continent. Alternative investments across Africa are, traditionally, the domain of investment platforms such as venture capital, private equity or even angel investing, but we are also seeing pension funds edging into this space - particularly into investments such as renewable energy and infrastructure. It is also becoming clear that the roll out of digital infrastructure is another area of potential in an increasingly tech-focused future.

Until we meet again, stay safe.

Best wishes,

Eric Enslin,
CEO FNB Private Wealth

What does 2021 have in store?

The human tragedy of 2020 was accompanied by an economic crisis as global economies shut down to try slow the spread of Covid-19. In addition, politicians in the developed world kept financial markets on edge over the year as an acrimonious United States election and the finalisation of the Brexit deal both went down to the wire. As we step into 2021, investors continue to be challenged in their long-term thinking as they contemplate whether a hazmat suit is still the only protection against a deadly virus. So, where to from here?

An eye on global markets

The global lockdown and halt to economic activity in the first half of 2020 floored all economies. Central banks unleashed unprecedented swift actions with a combination of aggressive monetary expansion and fiscal stimulus. Governments across the world tried their best to provide financial support to businesses and individuals, who saw their means of earning a living crushed unexpectedly. Interest rates around the world were pushed to the zero bound as central bankers aggressively cut rates and flooded capital markets with liquidity. The ploy was straight from the global financial crisis playbook - but on steroids - as the world's largest central banks did in a single quarter four-fold more quantitative easing than during the whole of the 2008 financial crisis. This approach will continue in 2021, with the new Biden administration in the United States planning more than US$2 trillion in stimulus with 80% of Americans likely to receive a stimulus cheque - an eye-popping number given that less than 20% do not work.

The bond market rally was followed by an equity market rebound. First, beneficiaries of the work-fromhome trend led the rally. But in the second half of 2020, as economies re-opened, a broader based rally ensued. With cheap money available, new participants joined the buying frenzy on several online apps - the so-called Robinhood effect. The amateurs jumped on the momentum bandwagon gobbling up Bitcoin and Tesla, racking astounding gains that are up more than 600% since March. These gains continued at the start of 2021 with Elon Musk briefly overtaking Amazon's Jeff Bezos as the wealthiest man on Earth.

The fourth quarter benefited from the additional fillip from the creation of vaccines, which added to the reopening trade. The S&P broke its record levels 33 times last year and the rally saw it rebound almost 70% from March lows.

The West Texas Intermediate oil price, which had turned negative earlier in the year, passed the more respectable US$50-per-barrel mark. Pharma stocks also attracted much interest, with Moderna up more than 200%. Globally, earnings declined by some 15% and valuation multiples expanded - but, as we know, markets wrote off 2020 and fixated on a more promising 2021.

Outing Agent Orange

In the United States, a blue sweep was regarded as a low probability outcome by most political commentators. While a Democratic win was seen as underpinning a much stronger fiscal response, this raised concerns about the impact of more aggressive fiscal action on the inflation. US 10-year yields spiked from record lows to end the year above 1% as inflation expectations also climbed. However, markets quickly shrugged off the impact of a contested election outcome even as outgoing President Donald Trump was making various erroneous claims about voting irregularities. Just as the Democrats were about to cement their control of the Senate after winning both seats in Georgia in January, Trump supporters stormed the Capitol - something unimaginable for a country born out of democratic principles.

After internet giants shut down Trump and his acolytes, who had instigated the riots, there have been many discussions about the role of social media in allowing 'alternative truths' to take hold in society. Trump's Make America Great Again campaign had become a proxy for a brand of nationalism and isolationism that was openly anti free-trade and anti-immigration. It also exploited the resentment caused by growing income inequality.

Local headwinds

South Africa's hard lockdown in April severely impacted the economy, which had been moribund for years. The R500 billion stimulus package (10% of GDP) failed to live up to expectations. The R200 billion loan support for small business was hardly drawn down and corruption took a bite out of some of the initiatives meant to combat the virus. Relative to the rest of the world, South Africa remains in a growth trap with constrained fiscal muscle but attractive real yields

It should come as no surprise that South African bonds outperformed last year, posting very decent returns of 8.6%. The All Share made a strong comeback over the second half of 2020 to close the year up 7%. Despite being up some 21% in the finalquarter, property stocks lagged and were down 34% last year. Resources stocks remained the best performers for the year, up over 21% driven by strong commodity prices, with iron ore prices up an astonishing 77% as Chinese demand rebounded and supply remained constrained. Globally, the picture looks different with equities leading the way, up 22% in rand terms, while bonds were up 9% in rand terms (in large part due to the local currency's weakness).

The impact of the Covid-19 pandemic has also been exacerbated by the fact that lower income groups have been more vulnerable to the disease and suffered greater economic hardship in the form of job losses

A role for green, sustainable investing

The coronavirus is just another example of a pathogen that has been transmitted from animals to humans. With human encroachment into natural habitats it is likely that we will see more outbreaks of this nature in the future. In addition, global warming has led to the migration of 70% of the world's animal species to cooler climates. The crisis has reinforced the fact that sustainable investing requires us to question the impact that companies have on the environment as well as society.

Internet companies have also come under the spotlight over their role in spreading fake news. Disinformation is now widespread, with some high-profile political campaigns - such as Brexit and Trump's election push - being underpinned by such disinformation. Right now, we are seeing the roll-out of Covid-19 vaccines being undermined by conspiracy theories.

Where to from here?

As the vaccine is rolled out in 2021, the human toll of the virus should stabilise and this should assist with the re-opening of economies around the globe. Then excess savings accumulated during the crisis will be put to work. Markets have already anticipated this, and valuations have discounted some of the good news. Global equities trade on a forward PE of 21 times compared with a long-term average of 18 times - which shows that the earnings rebound expected in 2021 has largely been discounted.

A world-class offering

In assessing the contenders, the international judging panel looked at the quality of the standard banking services available to FNB small business clients - such as top-class transactional, credit, invest and insurance capabilities - but also the additional valueadded services on offer.

The aim of the latter is to give self-employed customers and owners of SMEs easy-to-use resources that will help them to develop and grow their businesses, especially in the difficult and fast-evolving business environment of the pandemic. These resources are not merely financial in nature, but also assist FNB clients to recognise trends and capitalise on them by pivoting their offerings to cost-effectively meet new market demands.

"We don't see our role as merely providing a top-class banking platform. It's about taking a holistic view of nurturing and growing small businesses," explains Little

Currently, small-, micro- and medium-sized enterprises (SMEs) make up 91% of formalised businesses in South Africa, according to the Banking Association. They employ about 60% of the labour force and account for more than a third of the nation's GDP

FNB gets the nod as best global bank for small businesses

Small businesses are the cornerstone of South Africa's economic development and a potential salvation for job creation. So supporting this vital sector is an imperative for the country. FNB heard the cry and now our efforts have been recognised on the world stage.

The recent recognition given to FNB as the Global SME Bank of The Year for 2020 at the Global SME Finance Awards is an accolade not only for FNB and South Africa, but a benefit for the economy as a whole. The award has been made annually since 2012 and was won against stiff competition from top banks around the world.

This is the first time a financial institution from South Africa has won the award, says Gordon Little, CEO of FNB Commercial.

A world-class offering

In assessing the contenders, the international judging panel looked at the quality of the standard banking services available to FNB small business clients - such as top-class transactional, credit, invest and insurance capabilities - but also the additional valueadded services on offer

The aim of the latter is to give self-employed customers and owners of SMEs easy-to-use resources that will help them to develop and grow their businesses, especially in the difficult and fast-evolving business environment of the pandemic. These resources are not merely financial in nature, but also assist FNB clients to recognise trends and capitalise on them by pivoting their offerings to cost-effectively meet new market demands.

"We don't see our role as merely providing a top-class banking platform. It's about taking a holistic view of nurturing and growing small businesses," explains Little

Currently, small-, micro- and medium-sized enterprises (SMEs) make up 91% of formalised businesses in South Africa, according to the Banking Association. They employ about 60% of the labour force and account for more than a third of the nation's GDP.

The all-important National Development Plan envisages that this sector should create about 90% of all new jobs in the country by 2030. The current impact of Covid-19 on the economy - notably significant job losses in all sectors and particularly the increased shedding of positions by big corporates - makes the role of small businesses even more critical.

This, believes Jesse Weinberg, Head of the SME Customer Segment at FNB, makes FNB's offering all the more important at this critical juncture. "It's important to be more than just a bank. We want to go the extra mile and emphasise shared value with our clients. If they're successful, then we're successful," he says.

Extensive resources available to SME clients

Among the suite of resources available to selfemployed and SME clients are the following:

  • Fundaba:: A free 'business coach in your hand' educational tool that helps SME clients to incubate, start, run and grow their business. It incorporates insights from hundreds of local business owners and mentors.
  • Business Talk: A platform where clients can access useful business information on a variety of topics, ranging from QR code payment channels to formulating business plans.
  • Business Tool Kit: This free resource was rolled out during Covid-19 to help clients evaluate their business and make critical tactical and strategic decisions.
  • Instant Accounting: A solution which uses an SME's FNB electronic bank statement to do their bookkeeping automatically every night. It is designed for people with little or no accounting know-how.
  • Women in Business: This initiative focuses on helping female clients with the growth of their business through advice, networking and adding value to their busy and complex lives.
  • First Business Zero account: An account with no monthly fees, it is an easy way for small businesses to become FNB clients

"When you bundle all of these offerings together and leverage them with the additional support that the bank provides, then you have a compelling offering for South African sole proprietors and SMEs, including those people who are looking to formalise their 'side hustle' into a viable business if they have become unemployed or under-employed due to Covid-19," says Little.

Helping SMEs to capitalise on emerging trends

"There is a totally different operating landscape for SMEs right now," observes Weinberg. "Almost without fail, they have to rethink route to market, how they market to clients, their relationships with staff, and their operational situations. They have to be lean and nimble in their decision-making."

Zinacare is one example of an SME client that has very successfully pivoted its core offering during the pandemic. A healthtechnology company that previously specialised in sexual health testing, it quickly added Covid-19 testing capacity and includes highly professional home testing in its offering.

For SMEs that are navigating the current 'new normal', recognising and capitalising on emerging business trends is vital. Here the insights and mentoring resources provided by FNB play a valuable role.

In the SME market, says Weinberg, it's normal to talk about the 'three accesses': access to finance, access to market and access to education.

"Access to the customer has been completely turned on its head for many businesses," he explains. "If they can't trade via bricksand-mortar outlets anymore, what do they do? Go onto an online marketplace? Advertise online?"

Weinberg adds: "Many business people used to operate intuitively; now they find they are out of their comfort zone and their tradi tional areas of expertise. Perhaps they need access to finance and credit that they have never needed before? Maybe they should think about re-bonding their house?"

SMEs now need education and step-by-step advice more than ever, believes Weinstein. They require webinars, practical information and a new way of thinking in order to evolve their business model. This is where FNB's SME resources can help provide answers.

"There's a significant increase in the number of small businesses embracing e-commerce and digital enablement during Covid-19. So we see a lot of interest in our resources that deal with that aspect," he observes. "For example, we can guide them on how to start selling on Shopify and link up with Takealot for customer deliveries."

According to Little, one of the resources on Fundaba that can assist in this regard is a video interview with local Google experts, who discuss in simple and practical terms how to get your business noticed by customers on Google.

"There are a lot of those snippets on the platform. We work hard to ensure our content is fresh and userfriendly," he emphasises.

Among the other pandemic-related trends that could benefit SMEs is a clear preference by consumers to 'buy local' and support local businesses rather than large multinationals. There is also a move away from shopping in large regional malls - with their higherpriced premium global brands - to strip malls in local areas that offer good value.

Vumela Enterprise Fund assisting high-growth SMEs

Another way that the bank supports small business is through the Vumela Enterprise Fund. FNB Commercial, together with specialist SME investment company Edge Growth, manages the fund and through it makes equity investments into high-growth SMEs struggling to access finance through traditional channels.

Little says more than R300-million worth of equity and debt funding has been injected into small business through Vumela to encourage early-stage entities. "The idea is to focus on businesses that are making an impact in terms of job creation. We empower the shareholders to grow their businesses from a start-up into a more mature entity," he explains.

Interestingly, despite the perception of pandemicinduced business carnage throughout South Africa, there are surprising indications of resilience in the economy. Average turnover on FNB-held business accounts is, for example, back to where it was in February 2020 - before the pandemic struck.

Similarly, consumer spending patterns have rebounded strongly and, although they aren't quite back at prepandemic levels due to sectors such as tourism and hospitality being so heavily impacted, Little says you "get the sense that there is still some buoyancy in this economy".

This is, of course, good news for SMEs and for FNB's efforts to help grow the small business sector. "As a bank, we have put great effort into nurturing and advising SMEs. Not necessarily because it will be of immediate benefit to us, but because it is of long -term value to the country and our clients," stresses Weinberg.

SA's tax changes, loop structures and exchange control shifts

Written by: Chantal Robertson, FNB Global Solutions Willem van der Merwe, Global Solutions Specialist FNB

South African Tax law stepped boldly into 2021; firmly in line with government's stated intention to modernise the country's existing exchange control system.

Last year the Minister of Finance, Tito Mboweni, announced Treasury's intention to transform the current exchange control environment into a capital flow management framework. This was first announced during the 2020 National Budget Speech, and essentially proposed an overhaul of exchange controls to take place over 12 months. To this end, three tax Acts were promulgated on 20 January 2021, of which certain sections address some of the exchange control changes:

  • The Rates and Monetary Amounts and Amendments of Revenue Laws Act 22 of 2020;
  • the Taxation Laws Amendment Act 23 of 2020 (which deals with pension/retirement funds) and
  • the Tax Administration Laws Amendment Act 24 of 2020.

The Tax Administration Laws Amendment Act holds particular interest fro from a wealth management perspective. Not least because it relaxes the country's policy regarding 'loop structures'.

What are loop structures?

A loop structure meant that South African residents were prohibited from holding any South African asset directly or indirectly through a non-resident entity. Inward loans were also prohibited.

A gradual relaxation to the loop structure restriction commenced in February 2018 when the South African Reserve Bank's (SARB's) reporting branch, Financial Surveillance (FinSurv) permitted a loop structure of up to a 40% investment by a corporate entity into a nonresident entity which would invest directly back into South Africa.

A further relaxation was announced on 30 October 2019 which permitted South African resident individuals to invest up to 40% in a non-resident entity that would invest directly back into South Africa.

In order to promote and encourage inward investment to South Africa, on 4 January 2021, the entire loop structure restriction was lifted, permitting South African individuals and South African entities to invest into an offshore structure which would invest back into South Africa.

Any loop structure created prior to these dates and in excess of the permissible percentage, must be regularised with FinSurv via an Authorised Dealer.

It is important to note that the South African Revenue Service (SARS) is simultaneously issuing legislation on the tax treatment of these structures. Therefore, from a cross-border planning perspective, it is key that both the exchange control and tax implications are considered carefully before making use of this latest SARB dispensation.

The finer details

While the abovementioned tax amendments were anticipated, it is notable that they apply from 1 January 2021. Therefore, effective immediately it is important to consider these amendments when making use of the loop relaxations or when making any change to an estate planning structure.

Rather than trying to punish those who implement the nowpermitted loop structures, the tax amendments are, in essence, aimed at closing possibilities to avoid tax.

To understand the changes, it is important to understand what is meant by a Controlled Foreign Company (CFC). In simple terms, a CFC is generally an offshore company of which more than 50% of shares are held by a South African resident. This resident can be an individual or a South African company.

Before the relaxation of the loop rules, a CFC would not have been allowed to invest in South Africa, as this would have been construed a 'loop structure', which was prohibited in terms of exchange controls. The tax amendments focus specifically on the rules dealing with the taxation of such CFCs, which will now be allowed to invest into South Africa.

When a CFC receives dividends from a South African company in which it owns shares, such CFC might benefit from a reduced dividend withholding tax rate, depending on the jurisdiction of the CFC and the terms of the double tax agreement between South Africa and the jurisdiction in question. Furthermore, when the CFC pays a dividend to the South African resident shareholder, such dividend could be exempt from tax. This would have created an obvious tax loophole when South African residents implement such a loop structure. The tax amendments provide that a CFC must now include a portion of a dividend received from a South African company in their net income (based on a formula). A reduction is received for dividend tax already paid. The amendment ensures that any dividends tax suffered upon the distribution of such a dividend by the South African company is considered. The South

African shareholder will also not be able to benefit from the di vidend exemption when receiving a dividend from the CFC.

Previously, when the South African shareholder sold the foreign share in the CFC to a non-resident third party, the capital gain was disregarded for taxation purposes. The amendments now provide that a South African resident shall not enjoy a capital gains tax exemption when selling shares in a CFC when the value of such shares is directly or indirectly attributable to assets in South Africa.

In line with treasury's long-term plan

The 2020 Budget Review outlined far-reaching changes to South Africa's exchange control system. Essentially, Treasury and the SARB are planning to replace the current system with a more user friendly and transparent capital flow management framework.

The main features of this new framework would look something like this:

  • A shift from the current negative bias framework to a positive bias framework where all cross-border transactions will be allowed, except for those that are subject to capital flow management measures.
  • A move from exchange controls to capital flow management measures to regulate cross-border capital flows. This is an important shift as capital flow measures are recognised across the world as a necessary measure, while exchange controls remain a foreign concept which are unique to only a few countries in the world
  • A more modern, transparent and risk-based approvals framework.
  • Stronger measures to fight illegitimate financial cross-border flows and tax evasion.

These changes are squarely in line with global thinking. They also aim, with respect to changes on emigration, to align the treatment of South African residents and emigrants - thereby supporting the mobility of global citizens. Under the new proposals, natural persons (emigrants and South African private individuals) will be treated identically, subject to capital flow management measures.

The aim is to level the playing field between South African private individuals and emigrants, subject to tax obligations being met.

As Mboweni stated in his 2020 Budget Speech, it is also hoped that the changes will "open up new markets, promote regional integration [in light of South Africa signing the African Continental Free Trade Agreement] and contribute to economic growth".

What does this mean for you?

Broadly speaking, the new exchange control framework has implications for all South Africans, particularly those whom we refer to as 'global citizens' - those with interests abroad and investments offshore.

For our clients making use of the R1 million and up to R10 million offshore allowances, there will be little change to the current process. Individuals using the annual single discretionary allowance of R1 million for foreign investment purposes must provide a tax reference number. In addition, any use of the annual foreign investment allowance of R10 million requires tax clearance in terms of the SARS FIA001 process.

Any foreign investment transfers in excess of R10 million would require a special tax clearance process and would be subjected to a more stringent verification process, much like the current process. However, the latter process is also going to include assurance that the individual complies with anti-money laundering and counter-financing of terror requirements prescribed in the Financial Intelligence Centre Act, 2001.

What is important to consider is whether the tax changes outlined above would have an effect, and to what extent, on any proposed estate planning structure.

FNB's team of fiduciary specialist advisers can guide you through these discussions. For those looking to implement a structure benefiting from these relaxations, FNB has the ability via their offshore trust and fiduciary services provider, FNB International Trustees, to implement an offshore structure that can participate in the now-permitted structures. A fiduciary and structuring discussion should not be held in isolation and can benefit from the investm ent advice capabilities of FNB's wealth management team.

To initiate such a discussion please contact me, so that I can draw all the right experts from within our Financial Advisory and Global Solutions teams into the process.

Solving for Africa's needs through alternative investing

As you grow and diversify your investment portfolio you will increasingly look beyond traditional assets such as stocks and bonds and towards the realm of alternatives; those private market assets that offer exposure to new approaches and markets. These opportunities are not as easy to access as picking a retail-focused investment off the shelf, which is why they are often the domain of venture capitalists and private equity experts, particularly in the African context.

"Even in South Africa you have the option of investing in private equity, but your options are quite limited," explains Chantal Marx, Head: Research and Content at FNB. "When it comes to investing in Africa ex-South Africa, you would more than likely have to be an ultrahigh- net-worth individual to tap into these options and you'd have to first identify which private equity or venture capital fund you want to 'back' to give you a decent return on of your investment."

Working with a private equity business with the likes of RMB Ventures, which invests in start-ups all over the African continent, is just one of doors open to investors looking to go this route. While RMB Ventures has a particular focus on funding both intellectual and human capital, other firms will offer a different approach and expertise across a range of sectors. This is why picking the right partner and investment avenue for your diversification ambitions is so important.

Different ways of investing

Alternative investments across Africa are, traditionally, the domain of investment platforms such as venture capital, private equity or even angel investing. In each instance, there are very clear reasons why these avenues are usually the preserve of the professional investor.

Marx explains: "Very few individual investors have the stomach for something like venture capital where, if you are really, really good you will only have a 20% success rate." This risk element is why, says Marx, the space has largely been the preserve of institutional investors and discretionary money.

That said, some pension funds are now edging into the world of alternative assets, particularly in investments such as renewable energy and infrastructure, which has a more certain return profile since the technology and processes you are investing in are tried and tested.

In the wake of Finance Minister Tito Mboweni's October 2020 Medium-Term Budget Policy Statement this trend may become even more of a factor - at least in South Africa - as the continued 'liberalisation' of Regulation 28 could see changes to exposure limits and guidelines for retirement saving investing into infrastructure projects. Currently pension funds can only invest 10% into alternative investments, including infrastructure, so these adjustments could create more opportunities for investors keen to explore alternative asset options.

In light of this drive, another option which is finding favour among some wealthy investors is a more hybrid approach that incorporates the tenets of venture philanthropy, which employs venture capital techniques and applies them to achieving socially focused goals. Marx explains: "For example, by investing in digital infrastructure in an area where there is no broadband access, an investor would likely make a pretty decent return due to the fundamental investment case, but they would also be investing in the upliftment of entire communities. For many, that broadens the appeal because the investment is actually making a tangible difference in the way that people live."

The opportunities

The roll out of digital infrastructure is just one area of potential. In the context of COVID-19, it is hardly surprising that healthcare is another important investment area.

Applying an alternative asset investment hat to this problem, explains Marx, means seeking to solve for a poor and underresourced African healthcare system not by following the old route of building brick-and-mortar hospitals by the thousands and trying to train doctors and nurses to see one person every 15 minutes, but rather by investing into telemedicine or digital medicine alternatives.

Similarly, she says: "If you think of learning, and the fact that a lot of kids don't have access to schooling, then perhaps your solution is investing in broadband infrastructure and digital education initiatives, rather than trying to build a school in every village."

The same goes for electricity. Instead of trying to build out electricity infrastructure that is focused around nuclear or gas or coal, investors could opt for direct investments into renewable energy, which is both cheaper and better for the environment.

Small-scale farming is another sector which is being galvanised across the continent thanks to innovations such as crowd farming platforms which connect smallholders to agricultural investors. This includes the likes of Nigeria's Farmcrowdy, which claims to have raised more than US$15 million for 25 000 farmers over four years, according to African Business magazine. Another agri-tech innovation highlighted by the magazine was South Africa's Livestock Wealth, which connects online investors with cattle farmers, or Ghanaian crowd farming firm Agripool, which negotiates leases on community-owned land to afford farmers legal protection.

The funding solutions being conjured through new online platforms are of particular interest, with Marx stressing that finding solutions in terms of funding for small-scale farmers is key to this African sector. "There is certainly a funding gap, since some larger institutions might not have the risk appetite to fund these smallscale farmers," she explains. "And yet there is a massive requirement for working capital every season. That means there is an opportunity - and a gap - there."

The challenges

While the opportunities are plentiful, there are very real challenges to this form of investment. Government buyin is one.

"When you are looking at something like agri-tech or broadband infrastructure or renewable energy, then the regulatory environment is supposed to aid those kinds of initiatives," explains Marx, "but in many cases they often hinder those kinds of initiatives."

Another issue, which is linked to the lack of liquid retail options, is that any investment is going to be tied in for quite some time.

Despite these concerns, Marx believes alternative asset investing certainly has a place in an emerging continent such as Africa. "What is great about going into areas that are relatively underdeveloped is you can use new techniques to solve for old problems in a much more efficient and cost effective way," she says.

FNB Connect Deals

FNB Connect has been offering exclusive SIM and smart device deals to FNB Private Wealth clients since 2015. Connect's improved quality network means that FNB Private Wealth clients can enjoy wider coverage on 3G and LTE networks and experience faster data connectivity than before. Clients can enjoy the following benefits of the FNB Connect SIM:


Garmin Fenix 6X sapphire

Lens Material: Sapphire Crystal Bezel Material: Diamond Like Carbon Coated Case material: Fiber-reinforced polymer with metal rear cover Strap material: 26mm quickfit silic

x 24 months

Top Up Go

50 MB data,
15 voice minutes,
15 SMSs

iPhone 12 Pro Max 128GB
Pro camera system with 12MP Ultra Wide, Wide and Telephoto cameras, 4x optical zoom range, Night mode, Deep Fusion, Smart HDR 3, Apple ProRAW, and 4K Dolby Vision HDR recording

x 24 months

Top Up M

800 MB data,
100 voice minutes,
100 SMSs

Samsung Galaxy S21 256GB Dual Sim

The Samsung Galaxy S21+ 5G comes with a 6.7 inch touchscreen with 394PPI. It packs a 64-megapixel rear camera and a 10-megapixel selfie-camera. This is all powered by the Exynos 2100 International chipset and 8GB of RAM

x 24 months

Top Up L

2 GB data,
200 voice minutes,
300 SMSs

Plus stand a chance to win 1 million eBucks when you buy any Apple product between 1 - 31 March 2021 at the eBucks Shop or FNB Connect

Ways to enter:

  • Meals and drinks not mentioned
  • Visit and shop at the eBucks Shop using your FNB card or eBucks
  • Log into the FNB App, shop at the eBucks Shop and enjoy free delivery
  • Or shop an Apple package with FNB Connect on the FNB App or online

*Competition ends 31 March 2021.

Valid while stocks last. Product and Deal T& C's apply


A dash of digital, a dose of innovation and a splash of fun

As we edge ever closer to the end of a tumultuous year it is clear that the COVID-19 crisis is far from over, as we can see from unfolding events across Europe and North America. What is also becoming increasingly apparent is that the world is learning to adapt to this new reality. We see this unfolding in our own business and our own homes, as the uptake of digital solutions and platforms continues to underpin our working lives, our personal time and the future career directions of our children.

We've chosen to hone in on this digital theme in a number of articles contained in our final newsletter of the year, with a particular eye to the impact of artificial intelligence and digital banking on our own sector and how this might impact your wealth management experience in the future.

We also examine how this rapid acceleration of the Fourth Industrial Revolution can, and must, change the educational and skills-development focus of our children. The likes of the World Bank have long been talking about the importance of creativity, empathy and mindfulness as vital future skills and, following the events of 2020, it is becoming clear that these skills have a place not only in the classroom but also the boardroom.

And, not to neglect our downtime, we've even adopted a digital focus for the holidays by examining interesting and innovative ways you and your family can keep entertained and enthused. You'd be surprised at how much fun you can have from the comfort of your couch, be it exploring the stars, indulging in an online quiz, unlocking an escape room or enjoying a night in at the ballet.

Our digital future is not, however, the only innovation under the spotlight in this edition. We ask you to consider the possibility of turning your family WhatsApp group into a savings stokvel and welcome your thoughts and feedback in this regard.

We also turn our attention to offshore investing, in light of further indications of a possible phasing out of the country's current exchange control regulations, and we offer a gentle nudge to make full use of your R1 million annual Single Discretionary Allowance and R10 million Foreign Investment Allowance before 31 December.

As the year speeds to a close, we take this opportunity to remind you to remain focused and vigilant over this period, being ever mindful that fraudsters are always on the prowl. Finally, on behalf of the entire FNB Private Wealth team, I wish you and your family a peaceful festive season and a successful and prosperous 2021.

Best wishes,

Eric Enslin,
CEO FNB Private Wealth

How artificial intelligence is shaping the future of banking

Even before the COVID-19 pandemic changed our personal and professional lives in so many ways, the banking sector in South Africa and worldwide was undergoing fundamental and rapid change.

Digitisation, data science and the new frontier of artificial intelligence (AI) had all come together as part of a three-pronged process to provide clients - both in retail and corporate banking - with many innovative new banking solutions and seamless, hyperpersonalised user experiences.

The onset of the pandemic has only accelerated these trends and created new ways in which banking is now being conducted.

At FNB Private Wealth, for example, the pandemicrelated lockdowns reinforced the importance of client engagements and the need for a personal financial advisor, working in collaboration with skilled experts, to help our clients navigate the complexities of a turbulent and unpredictable world. In order to free up our specialists to undertake more meaningful engagements, and to help our clients solve for more complex financial needs and goals, we are increasingly incorporating supportive digital processes and platforms, as well as robo-tools, into our offering to enable clients to self-direct their affairs where needed. This collaborative interplay between human expertise and creativity and the efficiency of world-class technologies underscores the future of our relationship model.

While FNB is ahead of the curve, this approach is increasingly being adopted by other leading financial institutions as the sector as a whole responds to growing client demand for contactless banking, personalised advice and greater control of finances from afar.

A survey by Lightico, an international software company that helps businesses interact digitally with their clients, affirms this trend. Their research found that 82% of bank clients are now concerned about visiting a branch in person and 63% are now more willing to try digital applications.

For corporates, the work-from-home imperative requires that highly complex global banking be carried out easily and securely by multiple employees and managers in different locations.

Heightened uncertainty requires better decisions

This time of crisis and high uncertainty also heightens the need for rational, data-based business decisions by banks and their clients. This is where the use of AI in banking comes to the fore.

"If AI is all about making fast, effective and logical decisions, then its value is being enhanced by the pandemic," says Riyadh Bhyat, Head of EMEA for Quantium, an international analytics firm that works closely with top global banks. His view of AI's importance in banking is supported by a study from the UK-based Economist Intelligence Unit, which interviewed more than 300 banking executives from around the world for its annual study on The Future of Banking. Of all the advanced technologies available, 77% of executives believed that AI would be the biggest game changer. Of all the money invested by banks around the world in technology, AI is second only to spending on cybersecurity.

How AI helps the banking customer

Matthew Bernath, Head of Data Analytics within the FirstRand Group, says fraud analysis and detection is one of the most obvious ways that AI can assist the bank's clients. "When you go to a store and swipe yourcredit card, the transaction is instantly being analysed for fraud. In a split second, our AI models are running and analysing whether it could be fraud or is likely legitimate," he explains. "We are able to analyse thousands of transactions happening simultaneously and provide a response in milliseconds. If people in a back office somewhere had to do that, clients would wait for hours at the merchant for a decision."

Bernath says the bank uses AI in combination with simple digitisation and data science (all are mutually supportive but not to same) to create value for client and efficiencies for the organisation.

"AI mimics human behaviour and decision-making. So instead of a client having their loan application reviewed manually by a human loan officer - a process that could take a week - it can be done instantly when you fill out the form on the FNB App," he explains. "AI will automatically create a credit score, decide how much money can be approved, select the term of the loan and pick the applicable interest rate. This becomes something of a game changer," says Bernath.

Using the nav» button on the FNB App is another example of how AI, when integrated with other digitisation technologies, gives clients convenient access to an array of options and processes that would have been undreamed of 10 years ago. "You can sell your existing house; get pre-approval for a bond; buy a new house; buy a car; renew your car licence, get wellness advice and tips on how to manage your money - all while lying in bed on a Sunday morning," Bernath says.

Ethics and using AI for the greater national good

But there is more to AI applications than just convenience. Bhyat, for example, outlines how AI was used for the greater national good during lockdown. Quantium, which is headquartered in Australia, worked with the national government in that country to determine which industries and businesses needed financial and other support in order to stay afloat and preserve jobs. As AI becomes more advanced and more human-like in its capabilities, are people destined to increasingly be removed from the decision-making process? Are we creating a kind of automated, hightech,'big brother'?

Bernath thinks not and points out that there are already steps in place to mitigate this. "It is called 'human out of the loop', 'human over the loop' or 'human in the loop'. 'Out of the loop' is for a very low-risk process where, if it goes wrong, no great damage is done," he explains. "The other actions are in accordance with the level of impact, or damage, if the computer gets it wrong. In these instances, this is mitigated by having a human oversee the process, or by inserting a human into the process so that the computer cannot make a decision without a person's approval."

Both Bernath and Bhyat emphasise that the ethics around using AI in the banking space require a level of 'explainability'. The final word goes to the Swiss-based World Economic Forum (WEF) which, in a recent report on the way digitisation and technology is changing banking, highlights that the banking sector is facing many challenges in a COVID-ridden world.

"With the right strategy, banks have a unique opportunity to succeed in the long term. Pursuing advanced technology and digital ecosystems will be key to that success," says the WEF. "With these elements in place, banks will cut costs and drive efficiencies, helping them weather the coming storm and redefine their value to clients in a shifting market."

Future skills are both hard and soft in a 4IR world

The Fourth Industrial Revolution (4IR) is upon us, embracing rapidly changing technology that will soon fundamentally change the way we live, work and are educated.

For schools, colleges, universities and training institutions, it is a time of uncertainty. What skills will be required by those who enter the workforce in five to 10 years? What current jobs and professions will even exist 15 to 20 years into the future?

A career path as a doctor has always been a solid choice. So too are ther dependable options such as a pharmacist, accountant, civil engineer or lawyer. Right? Apparently not.

360º skills shift

In an October 2020 article for the World Economic Forum (WEF), Hiroshi Tasaka, Honorary Professor at the Graduate School of Tama University in Tokyo and a special advisor to the Japanese Prime Minister, singled out these once-prime professions as being among those whose future is in doubt. The reason is they all require the application of professional knowledge and judgement based on logical thinking - two skills in which emerging artificial intelligence (AI) technology has an overwhelming advantage over humans. "Those who are engaged in simple manual work that can be replaced by robots, drones and automated driving will lose their jobs. However, these people can probably get new jobs by learning slightly more advanced skills in manual labour," Tasaka wrote. "A more serious unemployment issue created by 4IR is the prospect of many workers previously engaged in the knowledge economy (i.e. professionals) losing their jobs to rapidly developing AI."

Among the skills that cannot be replaced by AI, Tasaka said, are the ability to communicate and empathise deeply with customers; growth-management skills that help employees develop and grow professionally; counselling skills which enable workers to overcome stressful situations; and creativity.

Highlighting the value of creativity, he elaborated that this vital skill includes the ability to express a vision that motivates members of an organisation; skills that promote co-operation within a business; and leadership skills that enable an organisation to move forward smoothly when implementing innovative and often ground-breaking new ideas.

Tasaka's observations are broadly supported by other deep thinkers such as the United Nations Educational, Scientific and Cultural Organisation, which has emphasised the need for 'socio-emotional skills' including critical inquiry, mindfulness, empathy and compassion to equip young people to "effectively address the challenges of the 21st century". The World Bank has also talked of the importance of "teaching empathy and compassion in schools".

Rise of the 'touchy-feely' arts?

Does this mean that arts-based courses of study derided by many educators in the past, in favour of the hard sciences, are coming back into vogue? The answer, it seems, is a partial 'yes' - based on the reality that computers struggle to replicate these skills.

But experts hasten to point out that certain hard skills are still required in the 4IR world. It's just that they are different to the ones that have been taught in the past and which students have been inclined to study.

A global Disruptive Tech Survey by Get Smarter, a supplier of online short courses in partnership with various South African and international universities, found that the technologies most in demand are AI, data science, advanced analytics and machine learning.

But, says Get Smarter, interest in data science education in South Africa has been relatively low and adds that "South Africa's education system lacks a technology focus". To back up this statement, it quotes 2018 statistics from the Department of Higher Education and Training, which indicated that the share of highereducation students in programmes related to science, engineering and technology was less than 30% of total enrolments.

Professor Barry Dwolatzky of Wits University's Johannesburg Centre for Software Engineering (JCSE) agrees. In the wake of a 2019 ICT Skills Survey conducted by the JCSE in partnership with the Institute of Information Technology Professionals South Africa, Dwolatzky noted that this had highlighted "the poor state of education in South Africa and in particular the very low number of learners achieving competence in STEM (science, technology, engineering and mathematics) subjects".

Much of this he attributed to an underlying lack of appropriate curriculum, relevant teaching materials and skilled teachers.

A slow pivot for education

It's not that the powers-that-be are unaware of the challenges associated with equipping our population for the 4IR. In last year's State of the Nation Address, and again at the inaugural Digital Economy Summit, President Cyril Ramaphosa said more than one million young people would be trained in data science and related skills by 2030. "We are introducing subjects such as coding and data analytics at a primary school level to prepare our young people for the jobs of the future," he said.

Speaking in support of the president's objectives at a Council of Education Ministers' meeting in 2019, Basic Education Minister Angie Motshekga said thousands of teachers were being trained in coding, with the subject set to be piloted at 1 000 schools during 2020. She added that her department would also be introducing a robotics curriculum from Grade R to Grade 9 to provide a strong foundation in engineering. Whether these plans have survived the disruption of COVID-19 is unclear.

Private schools are also working to equip even their youngest learners with basic 4IR skills and are encouraging parents to play their part. At Curro, for example, learners are taught basic computing from Grade 1, but the group is adamant that parents must be involved in their child's digital literacy journey throughout. "The first exposure learners receive to technology is through their parents. While children certainly do watch and absorb their parents' digital behaviours, it is also the responsibility of parents to help their little ones become tech savvy through teaching," said Magdeleen de Kock, ICT Coordinator and CAT Teacher at Curro Krugersdorp.

She recommends parents introduce young children to basic coding through simple sites such as CodeMonkey and ScratchJR, for example. Participating in this process will give parents "peace of mind that their children are becoming better equipped to ultimately operate in the 4IR"", said De Kock.

When the group launched its Curro Online offering in May, during lockdown, Business Manager Jay Paul emphasised a strong focus on maths, science, coding and robotics - a response, he claimed, to the reality that "most home-schooling solutions do not prepare the learners for the technology-heavy 21st century". Only time will tell how the 4IR will play out in South Africa, Get Smarter observes. "But it seems clear that if the country is to become a legitimate participant in the coming revolution, it will need to make some fundamental changes first. Chief among these will be to combat the low levels of digital literacy."

This while not neglecting the equally important focus on developing soft skills. Apart from the empathetic and communication skills emphasised by Tasaka, the WEF was, as far back as 2015 in its 'New Vision for Education' report, highlighting "competencies such as critical thinking and collaboration, and character qualities including curiosity and adaptability" for the world of the 4IR.

The uncertainty around how, exactly, to get this educational balance right may be one of the reasons why the six leading private schools we approached for comment showed little interest in being interviewed. This could indicate the magnitude of the topic and, worrying, the inability of educators to adapt to this disruption with the necessary speed.

Offshore investing. What to expect in 2021

It is not surprising that most people are counting the days to the end of 2020, and are hoping for a brighter 2021! The news on the cross-border front is that National Treasury's proposed transformation from an exchange control environment to a capital flow management framework appears to be on track.

To provide further context, during his National Budget Speech in February, Finance Minister Tito Mboweni announced an overhaul of exchange controls to take place over the following 12 months. There has been some scepticism in the market as to whether these changes would happen given the turbulent year, but during his Medium-Term Budget Policy Statement (MTBPS) in October, Mboweni not only reaffirmed Treasury's intention to replace the current exchange control regime, but also announced some accelerated changes in the meantime to make it easier to invest in South Africa.

While it is tempting to jump straight into what to expect in 2021, it is important to ensure that we have not missed an opportunity in the here and now. With all the uncertainty and market volatility that we have seen in recent months, South Africans are continuing to embrace their status as true global citizens by moving money offshore. Due to the travel restrictions, this has been predominantly on the individual foreign investment side.

"Critically, moving funds abroad is no longer the preserve of the elite, there is more breadth and depth to the global conversations. More and more South Africans are looking to access the markets beyond our borders to ensure a more balanced investment approach," says Chantal Robertson, part of the Global Solutions team at FNB Financial Advisory. "Even with the current global pressures, I don't see this changing. South Africans are eager to participate globally and it is key that we are able to help guide them through this entire process, from the movement of the funds offshore to a comprehensive investment strategy."

Take advantage of your annual allowance Many South Africans are diversifying their portfolios by taking advantage of the R1 million annual Single Discretionary Allowance (SDA) for South African resident individuals aged 18 and older. For amounts above R1 million, tax clearance from the South African Revenue Service (SARS) can be obtained to move up to R10 million offshore annually as part of the Foreign Investment Allowance (FIA).

With 31 December fast approaching, those individuals who have yet to take full advantage of their SDA would be advised to do so, bearing in mind that the allowance includes travel, offshore credit card purchases, gifting and foreign investment. "For those South Africans who usually make use of most of their R1 million SDA on overseas travel, COVID-19 restrictions will have curtailed this," admits Robertson, "but this means that a large portion of your SDA may still be available for use. Just because you are restricted in terms of offshore travel, doesn't mean your money is."

While it looks unlikely that SDA and FIA limits will change in the foreseeable future, the bigger issue on the table currently are the serious - and noteworthy - structural changes on the cards.

A modernisation move

Looking back to February's Budget, when Mboweni first mentioned that the exchange-control process associated with emigration would be phased out over the next 12 months, a further reading of the Budget Review shows that the proposed changes on the exchange control side were much more far reaching than just emigration. National Treasury and the SARB are potentially planning to replace the current system with a more user friendly and transparent capital flow management framework.

The main features of this new framework would look something like this:

  • A shift from the current negative bias framework to a positive bias framework where all cross-border transactions will be allowed, except for those that are subject to capital flow management measures.
  • A move from exchange controls to capital flow management measures to regulate cross-border capital flows. This is an important shift as capital flow measures are recognised across the world as a necessary measure, while exchange controls remain a foreign concept which are unique to only a few countries in the world.
  • A more modern, transparent and risk-based approvals framework.
  • Stronger measures to fight illegitimate financial cross-border flows and tax evasion.

Notably, by aligning the treatment of South African residents and emigrants you support the mobility of global citizens. Furthermore, as Mboweni stated in his 2020 Budget Speech, the intention is to "open up new markets, promote regional integration [in light of South Africa signing the African Continental Free Trade Agreement] and contribute to economic growth".

It is further stated that individuals who transfer above R1 million and up to R10 million offshore in respect of foreign investment do not require prior approval, but will be subject to tax compliance. This is no different to the current process, meaning that where individuals use the annual SDA of R1 million for foreign investment purposes, a tax reference number must be provided. In addition, any use of the annual foreign investment allowance of R10 million requires tax clearance in terms of the SARS FIA001 process. The South African Reserve Bank (SARB) has advised that they will review these limits regularly.

Any foreign investment transfers in excess of the above would require a special tax clearance process and would be subjected to a more stringent verification process, much like the current process for individuals looking to make use of this special dispensation. However, this process is also going to include assurance that the individual complies with anti-money laundering and counter-financing of terror requirements prescribed in the Financial Intelligence Centre Act, 2001.

With regard to the changes on emigration, under the proposed new system, natural persons (emigrants and South African private individuals) will be treated identically, subject to capital flow management measures. The aim is to level the playing field between South African private individuals and emigrants, subject to tax obligations being met.

While ongoing engagement between Treasury, industry stakeholders and other stakeholders is ongoing, clarity has now been given on two measures designed to support trade and investment:

  • Loop structures for FDI purposes: Currently South African resident individuals and companies are restricted/prohibited from holding a local asset indirectly through an offshore entity, a so-called 'loop structure'. According to Treasury the full loop structure restriction will be lifted in January 2021 to encourage inward investments into South Africa, subject to reporting requirements. What is not clear is the full extent of this reform, for example if it will be extended to South African individuals and companies. But full details will be published closer to the date of implementation.
  • - Corporate foreign borrowings: South African corporates looking to raise funding abroad by way of bond and note issuances with recourse to South Africa will be able to do so subject to framework and reporting requirements as determined by the SARB. This will replace the current prior-approval process.

When the above was announced, the SARB also issued a circular in which they reclassified, as domestic, all inward listed debt, derivatives and exchange traded instruments referencing foreign assets traded and settled in South Africa in rands. Unfortunately there was some confusion regarding the impact of this on the investment industry so, in order to address this matter, the circular has been withdrawn and the SARB has requested comments from the public. We will participate in this process and will hopefully have more news to share soon.

Looking at these proposed changes from a broader perspective, Robertson notes that they are more in line with global thinking. "When you speak to a foreigner looking to invest in South Africa, they often struggle to understand exchange controls as it is a foreign concept for them, but they are well aware of capital flow measures since most developed countries have these type of systems in place, predominantly for reporting and compliance reasons," she says.

Touching on tax

Also tabled during the MTBPS were two draft tax bills which have tax implications for South African expats and private individuals.

With financial emigration officially coming to an end on 28 February 2021, the Taxation Laws Amendment Bill is seeking to deal with pension/retirement funds that were previously dealt with in terms of exchange control policy. It is worthwhile staying close to these changes as it provides some insight into what to expect on the exchange control changes.

Unpacking the perceived intention behind these tax amendments, Robertson explains that "the aim is to create a level playing field between South African individuals and emigrants, subject to tax obligations being met". She adds: "By treating all South African residents the same from an exchange control perspective, regardless of where they are living and working, you support the mobility of global citizens, both from an inward and outward investment perspective."

In short, the possible changes that will come into effect over the next 12 months will be a significant departure from the exchange controls system. While the framework has not yet been finalised we will unpack further developments as they transpire and will keep you informed should additional amendments be available.

Stay safe and secure this festive season

With global and local recessions looming, high unemployment numbers combined with financial pressures on both individuals and businesses, fraud attempts will continue to rise. While various sectors of the economy count the cost of lockdowns and pandemic-related regulations, fraudsters continuously change their modus operandi as they target those who let down their guard.

As the end-of-year approaches, vigilance is essential to ensure that you and your family do not fall victim to fraud this festive season. Please take note of the following fraud preventative information.

Fake fraud department calls

Fraudsters might claim to be calling you from FNB's fraud department to assist you with a fraudulent transaction or debit order. The purpose of such a call is to obtain sensitive information from you such as your OTP. The fraudsters might also ask you to initiate a transaction on the FNB App or FNB Online Banking as part of the fraud reversal process. This is a scam!

Contact our fraud department immediately when your cellphone is lost or stolen

The FNB App and FNB Online Banking are both extremely secure channels which require password access. Sometimes customers
unwittingly save these crucial banking passwords on their mobile devices, in the cloud or via their web browser.

It is for this reason that you should immediately contact FNB through the 24/7 fraud desk in the event of your mobile or smart device being lost or stolen. This will allow us to delink your lost or stolen device from your banking profile.

Don't get caught on the phishing hook

A phishing attempt is when you receive an email or message which entices you to open an attachment or click on a link that leads you to a fake website, which mirrors the real banking website. Once you've logged into this fake site, this effectively hands the fraudsters your credentials and access to your accounts. By making sure that you always log into the official and secure FNB Online Banking website you make sure that the site is always the real deal. NEVER access a site by clicking on links or attachments.

Guard against ATM shoulder surfing and card fraud

Since 1981, when the first ATMs changed the way we get cash, deposit cash and bank, these handy machines have sprung up all around South Africa. Even in this digital age they continue to offer a simple, effective and efficient way to bank. But it's vital to be vigilant when using these devices. Shoulder surfing is just one method used by fraudsters to take your cardand view your PIN details while you are using an ATM.Shoulder surfing can happen anywhere and to anyone, but you can protect yourself by not allowing anyone toassist or interrupt you while at the ATM. Be aware of your surroundings and those around you. Alternatively withdraw your money for free with FNB Cash@Till at Checkers, Shoprite, Pick n Pay and select Spar tills.

Enjoy digital peace of mind,

The safety and security of the FNB App and Online Banking ensures secure, flexible and self-sufficient banking at all times. Using these digital channels allows you to quickly and securely manage your cards and accounts.

On the FNB App, at a touch of a button you can:

  • Cancel lost/stolen cards or order replacements
  • Activate new cards
  • Control your transactional limits (both internationally and domestically)
  • View or change your PIN
  • Temporary block misplaced or stolen cards and lock/unlock when required.

Finally, remember that fraudsters are innovative and employ various techniques in an attempt to defraud people by means of various scams. This can range from holiday accommodation scams, romance scams, advanced fee schemes, business email compromise scams where emails are intercepted and banking information changed as well as WhatsApp scams where messages contain links or false information.

Trust your instincts, be ever vigilant and don't fall prey to tricksters and fraudsters.

If you suspect fraudulent activity on your account, then immediately contact the FNB fraud hotline on 087 575 9444 (or +27 11 369 2924 if you are dialling from abroad).

Top tips to help you outwit fraudsters

  • FNB will never ask you to share your username, password or OTP (one time pin).
  • Always know who you are dealing with. People claiming to be phoning from the bank might not actually be from the bank.
  • Do not let anyone claiming to be from FNB assist you with installing software on your computer. Fraudsters will use the installed software to get access to your sensitive information andpotentially your banking profile.
  • Immediately contact our 24/7 fraud line on 087 575 9444 to delink a lost or stolen device (including your lost or stolen cellphone) or to report a fraudulent transaction.
  • Never save your banking passwords to your internet browser, device or in the cloud.
  • Never open any suspicious email attachments.
  • Never click on any suspicious links contained in an email.
  • Take the time to confirm account information when making large payments on an invoice emailed to you. Always confirm bank account information directly with a service provider on the phone before payments are made.
  • Make informed choices regarding which email address to use, since some email services are not secure.
  • Enable additional security-related features to protect your email account, such as two-factor authentication.
  • Perform frequent anti-virus and malware scans on your personal computer and mobile device, using software that is up to date.
  • Use unique and strong passwords. Don't use one password for multiple profiles and accounts.
  • Limit the amount of personal information that you publish on social media and apply privacy settings where appropriate.
  • Guard your personal information and login credentials like a hawk.

Online fun for the whole family

For many, COVID-19 and the resurgence of lockdown measures around the world have derailed end-of-year trips and long-awaited family get-togethers. But that doesn't mean the holidays have to be a damp squib. For the intrepid online enthusiast a world of unique and fun experiences is just a click away, offering a range of fun ways to connect with the people who matter the most in your life - but from the comfort of your couch.

1. Flex your grey matter

Larry Benjamin hosts the best quizzes in Johannesburg. He offers diverse and fun categories from stage and theatre, to picture quizzes, sport, music and 'who am I'. And, in 2020, he rolled out an online offering. Gather a team and sign up with Quizwizz to enjoy weekly online quizzes that include a Thursday Speed Quiz, corporate quizzes and more. Pricing ranges from R320 and R480 for four quizzes.

For more information visit:

2. Touring with your Airbnb host

With lockdowns stopping global tourism in its tracks, Airbnb hosts needed a plan B. They came up with a bevy of virtual experiences from online cooking classes, coffee masterclasses, cultural tours and celebrations, and even sangria parties. If your tastes run to the food and culture of Mexico, for example, then join Carlos in Mexico City for his Mexican Food Game Día de Muertos Edition. Carlos has designed an entertaining event around the Mexican foods that have impacted the world, from fruits and vegetables toinsects and spices. Expect to be sprinting around your house searching your cupboards for examples of Mexican food in your home... you'll be amazed how many are hiding in your pantry!

For more information visit Airnb experiences and search for Carlos in Mexico City

3. Enjoy Italy with Shakespeare

If you are a Shakespeare enthusiast, then why not experience Shakespeare's Italy? Did you know that over 40% of Shakespeare's plays were set in Italy? Even more interesting is that it is widely held that Shakespeare never set foot in the country. In this enchanting hour-long experience you'll whiz through Venice, Padua, Verona and Rome, with maps, pictures and a quiz supplementing a range of fascinating historical and linguistic tidbits. By the end of tour you'll definitely have learnt something new; making this is a must for anyone looking for a new take on the Bard.

For more information visit:

4. Unlock the escape room

This top-rated online experience is a must for lovers of puzzles and games and will keep you enthralled for between one and two hours. T.R.A.P.T. is a US-based entertainment company that specialises in creating escape rooms. In early-2020 they launched an online escape room game called Project God-Particle, which featured five rooms to unlock. Navigating the maze of information takes serious collaboration and some serious out-of-the-box thinking. Currently only one online game is available, but a new offering is due out before the end of the year. This one is definitely worth the R200 per computer that it costs to play.

For more information visit:

5. Night at the ballet

Even if you aren't a passionate fan of the ballet you might be convinced to enjoy a night in celebrating the elegance and talent from afar. Gather the kids and the dogs and settle down with a glass of your favourite wine for an unforgettable and world-class experience. One ballet that really sets the tone for the holiday season comes courtesy of the Washington Ballet, which is offering the Nutcracker Suite as a December special - including behind-the-scenes content.

For more information visit:

6. Operatic extravagance

Fans of opera would be hard-pressed to imagine that the sheer magnificence of a highly-trained voice could be captured adequately through a computer or a television speaker. But, somehow, it can. For just US$20 the very best of The Metropolitan Opera is at your fingertips, from South Africa's own operatic sweetheart, Pretty Yende, to the effervescent Renée Fleming, Javier Camarena or Sir Bryn Terfel. Check out Metstarslive and dive into a wealth of top-quality virtual performances being streamed from around the world.

For more information visit:

7. Broadway's best

Broadway HD is the Netflix of stage performances. For just US$8.99 per month, or US$99 per year, you can access hundreds of virtual plays, musicals, ballets, operas, comedies and more. Over December, when work and school commitments calm down, why not try out a seven-day free trial and hit the town for a virtual evening with friends? From Death of a Salesman to Romeo and Juliet, Funny Girl, or Peter Pan the choice is yours...

For more information visit:

8. Virtual space tours

And for the kids we wrap up with a virtual space tour. Who doesn't like space? NASA Kids Club offers younger children hours of fun, while older kids and adults may find NASA at Home more intriguing. For those keen to beam themselves onto the NASA facility there is a virtual facility tour which offers pictures, videos, information and 360-degree views of all the different sections of the giant facility. Be warned,however, you can lose yourself for hours, so make sure you have loads of free time to enjoy everything NASA has to offer. And, if you want more, then the NASA's website is a treasure trove of information.

For more information visit: (Nasa's Virtual Tour)

While the world of online experience beckons, remember there is a codicil: The secret to enjoying online activities lies in gathering a group of people together to enjoy the event with you. Even if you are all scattered around the world in different locations, a WhatsApp group chat allows you to chat, pass comments and ask questions during these amazing shared experiences.

Introduction: It's not all doom and gloom

During the past quarter South Africans have been bombarded with news of economic malaise, lockdown blues and news headlines highlighting the plight of many people as a result of the containment measures put in place to fight the current pandemic. It's hard to stay positive and see the light at the end of the tunnel, but there are green shoots which we can, and must, celebrate.

The first is the unwavering generosity of South Africans, which FNB Private Wealth and the greater FirstRand Group have witnessed in the flood of donations being made to our South African Pandemic

Intervention and Relief Effort (SPIRE) initiative. We thank each and every one of you who has made a contribution for your humanity, your care and your kindness.

In this newsletter we highlight another focus on caring for elderly communities and specifically those in old age homes by providing much-needed personal protective equipment. We provide details of how you can donate to this worthy cause, either by making a cash donation or by contributing your eBucks.

For our clients who are retirees or who are knocking on the door of retirement, we are also delighted to share some good news: in the form of our new Retirement Solution offering. Given the pressure on retirees, many of whom are seeing their monthly incomes eroded as a result of market movements and interest rate cuts, we have created an option which not only offers support during the immediate COVID-19 crisis but also offers long-term benefits in the form of preferential rates, private banking perks and tangible rewards.

FNB Private Wealth is not the only organisation adapting to the pressures of the moment. With uncertainty around incomes and with livelihoods under pressure, many South Africans are turning to the 'side hustle' to augment their incomes. Keen to know more, we enlisted the help of Nic Haralambous to talk us through this concept and to share his insights on this dynamic aspect of our future economy.

Of course, when it comes to navigating this strange new world, there are considerable stressors at play. Therefore, we are happy to outline some of the insights that author and human potential expert Nikki Bush shared with our staff and clients during a well-attended webinar. She offered both insights and recognition of the feelings of frustration and angst, which are welling up in us all. By applying her tips, it is possible to find that illusive balance.

We also hope you will find value in the insights from global strategist and speaker Abdullah Verachia, whose new book, Disruption Amplified: Reset. Rewire. Reimagine Everything, outlines the shifts impacting the profound changes playing out globally and who gives us a taste of how virtual engagements will evolve in the months and years to come.

The world, says Verachia, is not in the midst of a 'new normal' but a new. And this brings countless opportunities. One is in the agriculture space where the impact on global supply chains is creating potential for Africa's agricultural sector.

Stay well, stay safe and stay strong.

CEO, FNB Private Wealth

Additional support for COVID-hit retirees

The potential impact of the COVID-19 crisis on African economic growth forecasts does not make for comfortable reading. This has wide implications for vulnerable communities, for those in extreme poverty, for companies and individuals employed in the informal sector. It is also impacting retirees and those about to take formal retirement.

An analysis by the Institute for Security Studies, the Frederick S. Pardee Centre for International Futures and the Gordon Institute of Business Science signals that the continental economy will be between US$349 billion and US$643 billion smaller by 2030, depending on the severity of the impact. This will put businesses under pressure, see unemployment rising and put an additional 38- to 70-million people into poverty. Social grants will increase, tax collection will be under pressure and so will incomes.

"This has notable knock-on effects for those currently in retirement and depending on fixed incomes, as well as those South Africans planning and saving for their retirement," says Eric Enslin, CEO, FNB Private Wealth.

With salaries being reduced, some companies and individuals are already seeking relief in terms of their retirement fund contributions. And many pensioners are seeing their monthly income reduced as a result of market movements and interest rate cuts.

"In light of these pressures on retirees, FNB has created a Retirement Solution that aims to help retirees through the immediate COVID-19 crisis and support them in subsequent years through a combination of preferential rates, reduced transactional account fees, private banking perks and rewards which put money back into their pockets," explains Enslin.

"By offering better rates, adding more options and increasing the rewards available to our retired clients, we hope to offset - to some extent - the impact of the current crisis so our clients can continue to enjoy the lifestyle they have worked so hard to achieve."

Reduced transactional account fees

One of the most attractive aspects of the Retirement Solution offering is that retirees stand the chance of paying no monthly fees or enjoying a reduced 50% monthly account fee on their FNB Private Wealth account.

How this works in practice is that clients with R2 million in a qualifying FNB Investment accounts will have their full monthly account fee rebated. If they hold qualifying investments of R1 million with FNB Private Wealth, they will receive a 50% rebate.

Preferential rates

Recognising the pressures on those living off fixed incomes, the Retirement Solution also offers attractive preferential interest rates on fixed deposits, which enables retirees to increase the monthly income drawn from their investments - even while interest rates go down.

According to Himal Parbhoo of FNB Savings and Cash Investments, there are options that people can consider to lessen the impact of COVID-19 and the associated rate cuts on their finances.

"FNB's response to supporting its clients through the crisis includes giving consideration to offering seniors truly competitive interest rates on their Fixed Deposits, with the benefit of having the interest paid out monthly to supplement income." He therefore encourages clients with FNB savings or deposit accounts to contact their bankers to discuss their interest options. He notes that clients can also discuss blending their savings products more effectively to maximise both the growth and income components of their cash portfolios, also considering Tax-Free Cash Deposits.

Finally, Parbhoo emphasises that seniors should view the lockdown situation as a valuable opportunity to change the way they bank and thereby benefit from the convenience and security afforded by digital platforms.

Quality advice

While banking fees are being reduced, the access and quality of the expert advice and banking support on offer remains the same. In fact, given the greater complexity of your financial arrangements in retirement, the level of holistic banking support is increased to cover everything from investments and lending to risk and fiduciary advice.

At the same time, Retirement Solution clients will qualify to pay reduced attorney fees and discounted estate administration fees. Furthermore, their families will receive guidance and support through the deceased estate administration process at a discounted fee.

Other advantages, from discounted bond registration attorney fees and preferential rates on home loans also apply.

As well as innovative options to enable you to capitalise on your assets; such as leveraging the equity in your existing property to stand surety.

More rewards

Finally, Retirement Solution clients can now spend and earn in eBucks on everyday purchases at Checkers, Engen and "It is our aim to support clients who are heading into retirement or who are already living off their investment income to get the most they can out of their years of planning and investing," says Enslin. "By offering better rates, adding more options and increasing the rewards available to our retired clients, we hope to offset - to some extent - the impact of the current crisis, so our clients can continue to enjoy the lifestyle they have worked so hard to achieve."

COVID-19 spurs on savvy side hustles

The side hustle may just be the kick-start a decimated economy needs to get South Africans earning again. How many people do you know who've spent lockdown making masks, or offering exercise classes online or taking a job as a delivery driver to tide them over? Other stories include shifting into offering ready-made meals and even selling Italian-style ice-cream online.

Each of these stories is one of perseverance and spirit. But the longer-term impact of this fresh approach to work is even more fascinating than the short-term boost it offers.
Dean and Director of Henley Business School, Jon Foster-Pedley, says that not only can side hustles help create jobs, especially in the small, medium and micro entrepreneurship space, but: "Just as importantly, this is a signal - if we ever needed reminding - that the old business practices, the humdrum 9-5 conformity drummed into all of us by the monolithic corporates of yore, is over."

What is a side hustle?

To apply a definition to the concept: A side hustle is paid work or a job that people do in addition to their main occupation. Side hustles serve as a means to augment income. They allow people to follow their true passions while earning a steady income, to try out a new business idea or even test disruption within industries. Side hustles, done well, can eventually become an individual's primary occupation and some even grow into multimillion-rand businesses.

Self-proclaimed 'obsessive entrepreneur', keynote speaker and expert on the side hustle, Nic Haralambous, says while side hustles have been around for a long time, the idea is now becoming more pervasive.

A 2019 Henley Business School report entitled 'What is the Future of Work in South Africa?' Examining the Side Hustle Economy, confirms that an increasing number of South Africans are holding down more than one job, with 27% of respondents saying they have two jobs.

These side-hustle jobs can take a number of forms. At the high-end they can be a rental-property portfolio, consulting or stock trading. But people can also look to earn money through skills such as translation, teaching music, gardening services, or rubble removal to list just a few. Basically, anything that people are willing to pay for can be used to set up a side hustle. Haralambous, who has written a free e-book with 51 side-hustle ideas, does warn that pyramid schemes like Amway and Herbalife are not considered side hustles.

Furthermore, side hustles are not just about individuals making extra cash in their spare time. They can also be something that has the potential to enhance the way a business operates.

The Henley report says that side hustles are a great way to stimulate and build skills. Haralambous agrees and says small businesses can use side hustles to expand their businesses by trying out new product offerings. For example, a small family-owned sock company might start a hustle into the non-slip custom dog sock space (yes, there is such a thing!), testing the waters in the high-end pet accessories market before committing more time and resources.

Large businesses can also benefit from adopting the notion of the side hustle. "Bigger businesses should be trying to disrupt themselves. If they don't, someone else will do it for them," says Haralambous.

By starting a side-hustle business, large organisations can test ideas and build potentially disruptive start-ups.

Have a go!

Henley urges businesses to actively encourage their staff to start a side hustle. "It makes compelling business sense to regularise and legitimise this practice in companies to everyone's benefits because these side hustlers and side jobbers are incredibly innovative and creative and already among a company's greatest assets.

They learn new skills that they bring back to their primary employment, says Foster-Pedley.

He adds: "Instead of developing national incubators, which are often seen to be of little value, we might incubate a whole new wave of entrepreneurs who are side hustling while working and building economic value and jobs. It may open the door to more job sharing and shorter working weeks as side hustlers spend more time on their other ventures."

The business school's report found that side hustlers are also more motivated and productive, and that they are considerably harder workers. Side hustlers average a 53 hour work week compared with the 43 hour work week of their colleagues.

In a country like South Africa, living through an employment crisis, an economic crisis and a savings crisis, more people are tuning into the notion of dabbling in a side hustle in the hope that it will pave the way for a better future.

Nine ways to kick-start your side hustle

So you want to start a side hustle? Nic Haralambous says the first step is to get over any hint of imposter syndrome and just do it. He also stresses that there is no need to formalise the structure of a side hustle, bogging yourself down in paperwork is simply a roadblock. Instead, he suggests following these key tips to get your "something on the side" up and running.

  • Turn ideas into cash: Think about what you are good at. Is it something people will be willing to pay you for?
  • Don't overthink your qualifications: Haralambous says we are living in a time where perspectives and paradigms are shifting. "People who have skills overestimate their audience's requirement for qualifications," he notes.
  • Get started with the 3 Fs: Start with family, friends and 'fools'. The 'fools' are the early adopters who want to try new things.
  • Start talking: Talk about your hustle, all the time. Be positive, confident and unapologetic. Talk up your hustle around the braai, post prolifically on social media or send out emails to your contacts. Word of mouth is also great advertising.
  • Stop protecting your idea: People will not steal your idea. Your idea is probably already out there, and most people are too busy with their own ideas to even think about stealing yours.
  • Welcome feedback: Input from people will help you to refine your product.
  • If you are good, people will continue to use you:... and, most importantly, refer you.
  • Keep at it: Side hustles are not a get rich scheme. Haralambous stresses that side hustles take time, patience and consistency to build. It may take five years for you to start earning a living from your hustle.
  • Be realistic with your time: If you only have two hours to dedicate to your side hustle, then start with two hours. Haralambous stresses that you do not need to work until midnight every night to get started.

Finally, never forget the words of French novelist Anaïs Nin:

"Good things happen to those who hustle."

Maintaining balance amidst unprecedented change

There are three things we cannot escape in life: death, taxes and change. When it comes to change, this shift is usually accompanied by a certain level of trauma - irrespective of whether the change is brought about as a result of our own decisions (such as emigration, changing jobs or starting a family) or is forced upon us through circumstances outside of our control (like the shift brought about by the COVID-19 pandemic).

To help FNB Private Wealth's staff and clients make sense of the change swirling all around us, a webinar was held with Nikki Bush. An acclaimed author and public speaker on human potential and parenting, Bush focused on ways in which to manage the disruption we are feeling as a result of the pandemic.

First and foremost, Bush stresses that this pandemic is not just an event, it is going to linger and impact us for at least 18 to 24 months. Therefore, as people seek to find balance in both their work and family lives, they cannot carry on with their business-as-usual-approach. There is nothing 'normal' about this pandemic, and even when it is over, it is unlikely the world will return to its old ways.

This, for many, brings up feelings of frustration, angst and hopelessness.

Seven stages of trauma

As we navigate these feelings, Bush believes it is important for people to familiarise themselves with the seven stages of trauma. Understanding our emotions at this time will help us realise that we are not alone and that our feelings are valid.

What are the seven stages of trauma?

  • Immobilisation - we freeze and feel we can't go on.
  • Minimisation - we try to minimise our feelings by saying things like: "If Nelson Mandela could survive 27 years in jail, there is no reason I can't get through lockdown."
  • Depression - we get depressed about our inability to cope.
  • Acceptance - we start to accept our new reality.
  • Testing - we begin to test new ways of doing things.
  • Searching for meaning - this, says Bush, is the stage many people are now reaching.
  • Internalisation - we adopt the new normal.

Bush stresses that working our way through the seven stages of trauma is not a linear process. We dance backwards and forwards between the stages until, over time, we come out the other end.


During the webinar Bush offered some useful tools to help manage the lockdown trauma. Acceptance was the first. Whether it's adapting to a new work situation or simply trying to prevent your family from imploding as you are forced together, Bush says it is critical to accept that each of us is going through a period of major disruption.

Sometimes this will well up into an intolerable situation and, when it does, Bush suggests making use of the collateral list. In the left column, list what she calls 'collateral damage', which is all the negative issues you are dealing with. In the right-hand column, list all the 'collateral beauty'. These are all the positives that have resulted from the change. Invariably, notes Bush, the positives will outweigh the negatives.

Once we recognise that change is not a negative, Bush says it is possible to begin adapting how we approach our lives and the way we do things. Bush uses this three-step process towards self-mastery:

During the webinar Bush offered some useful tools to help manage the lockdown trauma. Acceptance was the first. Whether it's adapting to a new work situation or simply trying to prevent your family from imploding as you are forced together, Bush says it is critical to accept that each of us is going through a period of major disruption.

Sometimes this will well up into an intolerable situation and, when it does, Bush suggests making use of the collateral list. In the left column, list what she calls 'collateral damage', which is all the negative issues you are dealing with. In the right-hand column, list all the 'collateral beauty'. These are all the positives that have resulted from the change. Invariably, notes Bush, the positives will outweigh the negatives.

Once we recognise that change is not a negative, Bush says it is possible to begin adapting how we approach our lives and the way we do things. Bush uses this three-step process towards self-mastery:

  • Be curious! How did today surprise you?
  • Reinvention. Ask what you can do differently?
  • Ownership.Take responsibility for your journey.

These three steps, she says, allow us to be open-minded about the changes we are working through. They shift us from trying to mirror the past to reinventing the future. This applies to both a new work environment as well as an intense home and family situation.

Adjusting to cope with work and home

When it comes to work, Bush says we all need to take responsibility for our outputs and career trajectories. Managers and team leaders are no longer able to micro-manage. At the same time, leaders need to realise that people are trying to work while managing new family dynamics, which requires an innovative approach to time management, meeting schedules and measuring the delivery of key performance indicators.

While at home, Bush urges people to be realistic about what they can achieve in a day. Many parents will need to start working before their children wake up and carry on after their children go to bed. This will require strict routines and boundaries to be put into place. Routines and boundaries, says Bush, are extremely important for children, because it gives them structure in a world where their predictability and support has been taken away. Regular mealtimes, she says, form the backbone of this routine. Another helpful tip is being mindful of the language you use; instead of positioning challenges as 'fighting a war' learn to describe it as an adventure. This approach will help transform children's feelings of fear into feelings of curiosity. Furthermore, when parents have a plan to lead children through this adventure, it becomes a lot easier for children to cope.

Be patient, adapting takes time

What we need to realise about change is that adapting to new circumstances is not easy and takes time. Bush says we shouldn't expect things to get better for at least three to six months. If, after that timeframe you and your family are really struggling to come to grips with the 'new normal', Bush urges families to seek help through coaching or counselling.

The following are a list of resources that could be life changing for all and are taken from the South African Depression and Anxiety group which can be found at: www.

Cipla 24hr Mental Health Helpline: 0800 456 789
Pharmadynamics Police &Trauma Line: 0800 20 50 26
Adcock Ingram Depression and Anxiety Helpline: 0800 70 80 90
Department of Social Development Substance Abuse Line 24hr helpline: 0800 12 13 14 or
SMS 32312
Suicide Crisis Line: 0800 56 75 67
SADAG Mental Health Line: 011 234 4837
Akeso Psychiatric Response Unit 24 Hour: 0861 43 57 87
Cipla Whatsapp Chat Line: 076 882 2775
Rape Crisis - Tears: 010 590 5920

The future of virtual engagements

Before COVID-19 struck, and words like lockdown and digital burnout became part of our daily lives, had you even heard of the digital platform Zoom? Was Microsoft Teams part of you or your company's long-term meetings outlook? Now they are our lifeline to a new world of virtual engagement.

For organisations such as FNB Private Wealth and the broader FirstRand Group, a toolset such as Microsoft Teams has been essential as the bank shifted to online meetings, client consultations and webinars. "It was an absolute blessing in that we had previously migrated to Office 365 on the Cloud," says Raj Makanjee, CEO of FNB Retail and Private Banking.

A number of other organisations have also gone this route, but the challenge now is how to become comfortable with this rapid-fire digital shift as an organisation and, most importantly, among employees.

Companies that enjoyed a head-start in this digital transformation definitely had a leg up when the COVID-19 crisis struck, says Makanjee, "this acted as a fast-track driver for plans and thinking that were already percolating within the FNB family. Now it is forcing a more radical rethink about webinars and other types of eventing, where we can touch more clients and have more meaningful interactions."

The future looks digital

This, believes global strategist, speaker and academic Abdullah Verachia, is the way of the future. The role of technology in our lives will only increase from here, opening doors to new ways of communicating and connecting in a seamless and frictionless digital fashion.

In his new book, Disruption Amplified: Reset. Rewire. Reimagine Everything, Verachia outlines the macro shifts which are currently working together to spur on profound and far-reaching changes across society, such as globalisation, interdependency and interconnectivity. These forces, he says, are forcing changes on how we work, live, shop, entertain ourselves, raise our children and think about the world. And, in our context, how we engaged with one another both socially and in our work environments.

After years of paying lip service to virtual meetings and conferencing, COVID-19 has highlighted how technology is more than up for the task of providing humanity with the tools to connect virtually. Instead of flying around the country, or the world, to attend board meetings and conferences - at great expense both environmentally and financially - Verachia believes a hybrid model will emerge in the future, merging digital and virtual events with virtual reality and smaller, more bespoke physical engagements.

"Conferencing as a sector, for example, might also become micro in nature, meaning that instead of 1 500 people travelling to a central venue we could rather see a meeting of people in groups and pockets through a virtual experience, with those from the same region potentially meeting in person," he explains. "We could also see smaller, more personal engagements, so a group of tech entrepreneurs in Nairobi, might meet up virtually with a group of peers in South Africa. All of this will require top-level technology and fast and reliable digital connectivity in order to make these realistic virtual experiences a reality."

On a personal level we are also stepping into the adoption of big tech on a wide scale. "This will become our daily reality," says Verachia.

"The mere fact that families, individuals and even technophobes are accelerating their personal adoption of technology, shows this cognitive shift is already in play."

Verachia singles out the Zoom phenomenon which, in just the first three months of 2020 (to end April), saw revenues soar by 169% to US$328 million on the back of the hike in usage. The Financial Times newspaper reported in April that the number of people attending meetings on the platform on a single day peaked at 300 million, compared with a daily total of 10 million in December 2019.

People who showed no desire to connect via video technology, will now be socialising via Zoom, or Skype, or Microsoft Teams or the new Google Meet, he says. "People are having birthday parties online and becoming more aware of the ability of technology to connect the world and bring families together."

But it is in the business space where the implications of this shift will be particularly profound. Even when office spaces open up again in a new form - many as smaller spaces with a greater focus on remote work and digital engagements - we are likely to see a heavy reliance on digital channels.

The implications for productivity are noteworthy, says Verachia, who adds: "I can finish breakfast with my wife and kids at 7.59am and be in a meeting at 8.00am. In the old world I would have had to leave home at 6.30am, drop the kids at school and creep through bumper-to-bumper traffic to get to my place of work for the day. Each of these tasks were energy-sapping experiences. Now it takes me 30 seconds."

How we manage these engagements, guard against burnout and learn to incorporate them into our daily working and living realities will continue to unfold in the months to come, as we make friends with this new reality. Already, some companies are putting limits on meetings to 45 minutes, with a compulsory 15 minute break between sessions. Some are declaring certain days 'meeting free', to avoid overload. Organisations are in the midst of a learning curve around adapting and finding the best ways to harness the benefits of virtual engagements while ensuring that we also have adequate time to 'unplug' from technology to recharge both physically and emotionally.

We are, says Verachia, putting the reset button on how we interact. This is no 'new normal', this is just new. And the opportunities are endless.

An opportunistic eye on agriculture

Food security across Africa and the developed world is an area of concern in the wake of the COVID-19 lockdowns, which have highlighted the precarious nature of food availability in poorer and rural communities. With the global population projected to rise to 9.8 billion by 2050, according to the United Nations Department of Economic and Social Affairs, the world's food production will have to increase in step by around 60%. Africa, which is expected to have 2.5 billion inhabitants by 2050, and is already a food insecure continent, must urgently address issues of insecurity, malnutrition and the failure of internal economic policies.

Chantal Marx, Head: Research and Content, explains: "It's important to look at food security at a national and a household level, which highlights the notable difference between the situations in sub-Saharan Africa and South Africa. While South Africa is probably one of the only food secure countries on the continent, not all our households have sufficient food."

Limpopo and Gauteng are South Africa's most food secure provinces, while the North West and Northern Cape have the lowest levels of food security.

With growing population numbers putting pressure on local agricultural industries to up their game in terms of land use and increased yield, the impact of COVID-19 has also put the issue of food security firmly on the table.

In a recent article, Cambridge University Masters student Daniella Salazar Herrera wrote that the pandemic has heightened existing food security concerns. "The pandemic threatens to add to the 820 million people living in chronic hunger, as the measures adopted to stop the spread can hinder food production and distribution as well as people's ability to purchase food," she wrote.

Marx, who adds that even households in developed nations are coming under pressure, notes that there have been some interesting developments around food security in Africa recently. "Cambridge University, in an analysis of trends in food supply chains, noted that the breakdown of global supply chains had resulted in a reduction in cheaper global imports and a greater reliance on local sources. That has been very positive for traders, farmers, fisheries and fishermen in many sub-Saharan African countries," she says.

However, an open-source working paper penned by Mahamat Kabirou Dodo from the International Academy of Social Science in the United States argues that the fact that Africa suffers from food insecurity today "and has been suffering from it for so long" is "simply because of the utter failure and lack of vision, political courage, and sound economic policies of the African leaders and economic decision-makers of all political and ideological stripes on the continent."

The paper, entitled 'Understanding Africa's Food Security Challenges', singles out external factors such as the economic policy prescriptions formulated by the World Bank and International Monetary Fund in the 1970s, 1980s and 1990s which encouraged African countries to remove subsidies and "let the markets take care of everything", in an effort to modernise the African economy. Dodo argues: "Because of those policy prescriptions, African farmers lost income supports from their respective governments, and millions of low-income African families became victims of food insecurity and nutrition deficits."

Marx notes that there has been a concerted push by the Zambian and Congolese governments to address the situation of food security, and "although there are challenges, Kenyan agriculture is also doing quite well."

While household food security will remain an issue, a current confluence of issues, from external factors to the positive impact of COVID-19 on local food producers, could mark a positive movement for African food security overall, adds Marx, who points to the experiences of listed South African companies in the agriculture space.
"Astral Foods, the poultry producer, has been complaining about cheap American, Brazilian and European Union poultry imports, or dumping, which makes them uncompetitive in the local space," she says. "Similarly, Tongaat-Hulett and Illovo Sugar, when it was still listed, have for years complained about cheap sugar imports and how this has impacted the local industry."

With COVID-19, and the associated challenges facing agri exporters from the likes of the United States and Europe, those food producers who stay in business in South Africa could be looking at a positive outlook; at least in the short term.

As such, says Marx, "there are lots of opportunities to invest in listed vehicles in sub-Saharan Africa. You don't necessarily have to go and buy a farm to benefit from these trends."

Businesses to follow

"Companies that might benefit include the likes of Omnia Holdings, the fertilizer group, which could benefit from an increase in farmed land. Chemicals group AECI has exposure to plant and animal health and nutrition, and they have businesses such as Lake Foods, Infigrow (which assists in horticultural growth process) and Nulandis (which provides farmers with natural resources to reduce the reliance on chemical fertilizers to increase crop yields)," says Marx.

Kaap Agri, which is the only JSE-listed cooperative, is most exposed to South Africa and the Cape region, but they also have exposure to Namibia, says Marx, while the Senwes and TWK Agri cooperative agricultural companies are listed on the ZAR X alternative exchange.

"Zeder Group is another company to watch," says Marx, highlighting a business with a 41% stake in Kaap Agri. "Zaad Holdings is their seeds business, which exports seeds into Africa and they also distribute agro-chemicals into the rest of the continent. Similarly, they hold 96.7% of CapeSpan, which does production and marketing of fruit world-wide and operates across 12 countries and distributes into Africa. While Agrivision Africa, in which Zeder has a 56% stake, is focused on the grain value chain and has large exposure to Zambia."

Even investing in food producers from around the continent is another way to benefit from an internalisation of Africa's food supply chain, says Marx, adding: "There is no reason why COVID-19 can't drive a positive change."

African spotlight: Zambia

Farming in Zambia, as is the case across the African continent, is largely focused on smallholder farms; which comprise around 85% of the overall community. While the sector only contributed around 6.7% to the country's GDP in 2017, it is a significant employer which provides jobs for close on 54% of the Zambian labour force, according to the Zambia Agri-Business Market Report, 2019 from Research & Markets.

Highly rainfall dependent, small-scale farmers and the country's agricultural output are largely at the mercy of weather patterns. Zambia's main competitive advantage is the availability of water resources yet to be exploited for commercial irrigation and about 30% - 40% of water bodies in Southern Africa lay in Zambia - this goes to allay apprehension of would-be investors around water.

The government has also recognised the need to add to the 200 000 ha of irrigable land which is heavily skewed toward commercial production and presents an opportunity for increasing the number of producers using irrigation and area under irrigation. The irrigated land, meanwhile, which is skewed toward commercial farms, also dominates access to machinery and funding. While commercial farming remains small as a percentage of the total number of farms in the country, they produce most of the country's sugar cane, tobacco, wheat, potatoes an soya beans.

FNB Zambia is well-placed in the local farming market to work with clients and fund both innovations and potential purchases. Over the years, FNB Zambia has worked successfully with both small and medium-sized businesses within the agricultural sector. We are poised to assist clients interested in seizing valuable opportunities in the Zambian and other south, east and west African farming sectors.

For more information please email Willem Bredenkamp on

Working to help the vulnerable in society

When FirstRand's South African Pandemic Intervention and Relief Effort (SPIRE) fund was launched in lockstep with the March lockdown, the focus was clearly on ensuring that personal protective equipment (PPE) was made available to healthcare workers and that the healthcare supply chain, from testing to equipment, was supported. Supporting vulnerable communities through the health crisis was another key focus.

In line with this commitment, FNB has begun focusing its attention on caring for the elderly in our communities, those most affected when contracting the coronavirus.

As a recent Mail & Guardian article (COVID-19 stalks elderly residents of Jo'burg's inner-city care homes) notes, 57% of COVID-19-related deaths in South Africa (to date) have been among those aged between 60 and 99. "According to Statistics South Africa, the country has the largest population of older people in Africa. In addition, about 40% of South Africa's old people are poor, leaving many dependent on the precarious public healthcare system," said the newspaper.

In Europe, more than 95% of COVID-19 fatalities have occurred among those people older than 60, according to the World Health Organisation.

As such, FNB is now making it easier for our clients to support the elderly in our communities by donating either money or eBucks towards the purchase of PPE for old age homes in need.

All cash donations over R500 qualify for a section 18a tax certificate in terms of the Income Tax Act 58 of 1962. A tax certificate cannot be issued, however, for donations made via the eBucks website.

Be part of the FNB #RealHelp movement. Make a cash donation today using the dedicated banking details below:

Account Name: FNB Old Aged Person Support
Account Number: 62857331450
Reference: Use the province you would like your donation to be used in, as the payment reference.

Alternatively, click 'Donate eBucks' through the 'Help Old Age Homes' banner via the FNB website or FNB App home page.

All donations are administrated by FNB Philanthropy Donor Choice Foundation Trust, a registered public benefit organisation which has all the appropriate internal controls in place. The donations and distributions to the Trust are verified by PwC.

Dissecting the disruptors

Technology continues to make an indelible mark on the world in which we live. It has enabled disruptive technologies like Uber, Airbnb and cryptocurrencies which change the way we travel, book accommodation and transact across borders. It's seen the creation of banking innovations like nav» Home and now nav» Car, which creates a new world of convenience for you within the FNB banking ecosystem. And it has driven the creation of Secure Chat, the closest and most convenient way for you to chat to a dedicated team of Support Bankers any time of the day or night.

Across all these innovations, however, the importance of secure channels and ongoing protection of your personal information and digital devices has never been more critical. So, in this newsletter, we highlight not only the possibilities but also look to arm you with essential tips to ensure your cyber security.

In the wake of a 25 basis point drop in the repo rate, we take this opportunity to examine what this means for bonds. And, with the impact of megatrends firmly on our radar, we introduce a new segment on investment trends and what these political, social, environmental and demographic game changers might mean for the investment universe. We get the ball rolling with a look at 'globesity'.

As always, we include a segment from eBucks Lifestyle and included a "What's on?" section so you know what's happening on the social scene.

We hope you enjoy the features assembled for this newsletter and welcome any feedback and ideas.

What investors need to know about 'globesity'

You wouldn't put your money into a new product, company or sector without asking some key questions, would you? Well, neither would your financial advisor. This is why so much of our time at FNB Private Wealth goes into dissecting long-term political, environmental, social and demographic 'megatrends'; developments which impact your long-term investment returns.

There are a range of megatrends which FNB Private Wealth keeps on its radar, says Chantal Marx, Head of Research at FNB Securities. "Some are quite in-depth, such as the emergence of the sharing economy, demographic changes, the rise of 'globesity', energy and other scarce resources, the impact of disruptive technology and how Millennials are changing consumption patterns," she says. While others are more general. All, however, have the potential to change the way we live, work and invest.

In forthcoming newsletters we'll take the time to outline a number of these megatrends, giving our views and insights into the possible implications. From a South African perspective many of these global developments are likely to impact our society too, some for the better and others less so. For example, globesity - the increase in obesity around the world - is just one example of a ticking time bomb with a possible upside for astute investors.

Research from Wits University's Priceless research unit in 2016 tells us that obesity-related diseases, like heart disease and diabetes, are now responsible for 13.1% of deaths in South Africa. Compared with 13.8% attributable to HIV/Aids complications. This, says Marx, makes globesity of particular importance to the health of South Africa's citizens and also impacts healthcare resources, pharmaceutical companies and medical aids.

But it's not all bad news. With statistics from the Heart and Stroke Foundation telling us that South Africans are the heftiest in sub-Saharan Africa - with 70% of women and about 33% of men being classified as overweight or obese - this has spurred on a counter trend towards health consciousness.

"In emerging markets we have a disparity of income," explains Marx, and an associated disparity in trends. "Higher income individuals are generally in the healthier phase and they are teaching their kids these lifestyle behaviours. And while fast food is still a megatrend for this group, their choices are more health conscious, for example shopping at Woolies or Kauai or using systems like dinner kit delivery service UCook."

These healthier habits are increasing the uptake of wearables too, she explains, highlighting the likes of Garmin and Fitbit fitness trackers, which are, in turn, providing benefits for the insurance industry. "Discovery, for example, is using this data to improve its actuarial efficiencies," explains Marx. Adding these devices into the medical aid mix also makes consumers 'stickier' when it comes to retaining and using memberships to fitness and health clubs. This, says Marx, also keeps up demand for athletic-leisure wear, a bandwagon onto which the likes of Adidas, Reebok and Under Armour have been quick to jump onto in recent years. This specialisation also extends to the type of clothing that fitness fanatics need for yoga versus Crossfit versus spinning.

On the other end of the spectrum are South Africans for whom fast foods - not a Fitbit - represent an 'aspirational' lifestyle choice and, of course, there are also those who find it cheaper to eat convenience foods that to buy fresh produce. "Companies like Famous Brands benefit at this lower end of the market," says Marx. "Pharmaceutical companies and health groups benefit in the middle, although it's a challenge for medical aid companies because a lot of these individuals are employed and covered by medical aid."

After unpacking these divergent themes, the skill comes down to carefully distinguishing between a trend and a fad. Fads don't change the way people live, says Marx, but trends like globesity do. "At FNB our job is to adapt to these things, to take them seriously and to spot the opportunities." It's research and analysis like this that highlights the current - and long term - potential of a group like Brait (which owns Virgin Active), Holdsport, Mr Price Sport, Discovery and of offshore companies like Apple and Fitbit. It's this approach that keeps FNB's investing thinking one step ahead of the pack.

What you need to know about Bitcoin and blockchain

Even digital currency sceptics are being won over by the rampant surge of cryptocurrency Bitcoin over the past 12 months, a rise which saw its value touch US$5,000 a few weeks ago before coming down quite significantly to below $3,000 and now stands at just below $4,000, having overtaken the price of gold in March.

Despite the volatility of cryptocurrencies like Bitcoin, Litecoin, Dash and Ethereum, these digital currencies - which operate independently of any central bank - have surged into our collective financial lexicon in recent months on the back of uncertainty over issues like the United States and North Korea, Brexit and rising global tensions, says John Joyce, Portfolio Manager at Ashburton Investments. "This is not unlike the reaction we see from gold as a haven during uncertain times," he says.

The value of Bitcoin lies in the fact that just 21 million Bitcoins will only ever 'be mined', so, like gold, supply is limited. This gives them value. Some, like the Chinese central bank, argue that while Bitcoin's value makes it an asset, it is still not a currency and that regulation is needed. In mid-2017 German central bank member Carl- Ludwig Thiele told Handelsblatt newspaper that: "Bitcoin is a means of exchange which is not issued by a central bank, but by unidentified actors. I do not see it as a currency. If you think Bitcoin would be as safe as the euro or the dollar, you have to take responsibility for it." Some would argue that digitisation of banking has already desensitised consumers to the need to hinge a currency to a concrete, physical value or, indeed, to a central bank, opening the door for what JP Morgan calls "the audacity of Bitcoin", which is "a stateless, virtual and peer-to-peer currency".

Equally important is the vital technology behind the likes of Bitcoin. Blockchain technology, which was originally devised as the system behind Bitcoin, is essentially a public ledger of information duplicated thousands of times over a network of computers. The data isn't stored in one place, rather it is hosted on thousands of computers at the same time.

Farzam Ehsani, Blockchain Lead for RMB, is a recognised authority on blockchain technology and believes it will be as transformative to the global financial system as the internet has been to the world. "Blockchain is the underlying technology that allows a distributed and decentralised community to come to consensus about the true state of a system," he explains. "Bitcoin is an asset on top of this technology. Other assets can also use these consensus protocols and technology."

It's because blockchain data is not centralised and can't be hacked or disrupted at a single point, that it's become such a sought-after technology. So much so that even Bitcoin sceptics like American tech billionaire Mark Cuban recently told Bloomberg News that he'd be investing in 1confirmation, a fund which aims to raise US$20 million to invest in blockchain companies. Cuban might not rate Bitcoin, but he believes blockchain is a "foundation platform from which great applications can be built".

Ehsani points to the home buying process as one sector that is inevitably going to be disrupted by blockchain. "Imagine the ability of buying or selling a house and it being transferred into your name not in weeks or months, but in a matter of seconds or minutes. To me this is not some crazy theory, this will be reality in the not too distant future. It is just a matter of time."

Similarly, Joyce notes that the emergence of cryptocurrencies could be a significant disruptor to the banking system as we know it. "These currencies bypass the bank," he explains. While banks are unlikely to disappear as a result, being cut out of the loop will have adverse consequences for the traditional system. This is why banking groups like FirstRand are quick to investigate the potential of blockchain.

The implications of blockchain on banking, believes Ehsani, include disrupting payments - which currently makes up about 30% of total global banking revenue. "Right now, using Bitcoin, one could transfer monetary value and it would arrive in the United States or any other part of the world in 10 or 20 minutes, an hour at the most. And it would probably cost a grand total of less than R10 regardless of the amount being sent. In addition, it doesn't touch a single financial institution to get there. This can be viewed as a threat to financial institutions but can also be seen as a tremendous opportunity as costs come down and volumes increase. Banks need to start thinking creatively about this new paradigm," he says.

Right now, however, making a cryptocurrency mainstream looks unlikely, believes Joyce, citing the limited supply as just one hindrance. But the change is coming and FirstRand is working to understand the disruptions as well as the opportunities. "The idea of cross-border payments will, in the future, become as silly as the idea of cross-border email," says Ehsani. "Value is able to be transferred instantaneously, just like information. That's what the blockchain does."

What does the rate cut mean for government bonds?

When the South African Reserve Bank took the market by surprise with a 25 basis point repo rate cut in July 2017 it handed indebted consumers a fillip; a reduction in their monthly home loan and credit card payments. The general advice from the experts was, however, not to squander this relief, but rather to save through these uncertain times and build a nest egg.

But, while the average investor might be concerned with their property bond, there is another bond which is also impacted by a rate decrease, and that's government bonds. These have more of an impact on you and your investment portfolio than you might think; forming as they do a healthy proportion of any pension fund. So what does a rate cut mean for these bonds?

According to Justin Louw, Relationship Manager at FNB Securities, the 'bonds 101' fact we all need to know is that when interest rates go up, bond prices go down. And when interest rates go down, bond prices go up. "So, in a decreasing rates environment, like we have at present, government bond prices are going up. This means that our clients who have bonds in their portfolios or are invested in multi-asset funds could benefit," says Louw.

This may seem contradictory, because South Africa's sovereign debt has been downgraded to sub-investment this year, but, explains Louw, the market had priced in this downgrade possibility well ahead of time and had already reacted to ongoing South African political uncertainty and instability. So, even during this period of doubt and uncertainty, government bonds have delivered solid returns.

"What has been beneficial for us is that the carry trade [where investors borrow at low interest rates and invest in assets that offer higher returns] has been perpetuated, so there have been positive foreign bond flows following the March cabinet reshuffle and the downgrade," explains Louw. "Inflation has come lower, which is very beneficial, this has been aided by the relatively low oil price and the relatively strong rand. The rand strength came from an improvement in the current account balance and the carry trade. Because inflation has come down, the South African Reserve Bank has a bit of room to cut interest rates."

The carry trade can be explained by the real yield differentials at play, explains Louw. Assuming South African inflation averages 5.5% and the bond yield at the time of downgrade was 9%, then you had a 3.5% differential of a real yield. "If you look globally there is no real yield available," he says. "In the United States inflation is around 1.7% and the bond rate is 2.2%, so you have 0.5% yield. That explains why investors are coming here. They are looking for real yield."

While it has been beneficial for bond prices and the rand, foreign ownership of South African bonds is also a concern because it could have a massive volatility effect if foreigners sell. "At the end of the day, if someone sells something you hold, en masse, then the price can go down a lot and you can lose money. The opposite is also true so it pushes the value around," says Louw. "Volatility in something as conservative as a bond isn't great, as bonds tend to be used for more defensive stable retirement vehicles and older clients, so you don't want to be exposed to that volatility."

This volatility is evident in the fact that in 2016 bonds produced roughly a 15% positive total return, however the previous year they declined by around 16%. In summary, FNB expects further volatility in bonds and the only way to avoid this is if you hold them to maturity. "You'd have to hold the R186, for example, till 2026, to guarantee that 8.6% return currently," explains Louw. "Bonds are instruments utilised for income generation in portfolios and especially if you have an offset from a tax point of view or a tax beneficial structure they are attractive with the current real yield."

He also notes that, as a fund manager, "you cannot afford not to have a bond strategy for both sides of the coin on the table", but you do need to constantly consider the risk and timing given this volatility. "This is where a good advisor comes in," he says, noting that the timing of buying and selling bonds in volatile times should constantly be appraised.

There has been some negative sentiment around bonds lately, with the likes of Coronation shedding South African government bonds in its flagship Balanced Plus fund earlier this year. In most part this was because they regarded bonds as being too strong and, in their view, the price did not reflect the risk inherent in the market due to the political uncertainty South Africa is currently experiencing, explains Louw. "The R186 as a reference was about 8.40%, which really was too strong pre the rate cut. We also didn't think it would price in further downgrades, so we lightened our long exposure."

But that was before the surprise interest rate cut. So now, if bonds do weaken again, Louw notes that "we might push our weighting in bonds up as they are still attractive, not necessarily for individuals from a tax perspective, because the distribution is considered as interest, but if you have a pension fund then bonds are attractive due to current yields. At this point you get a percent or so higher return than in the money market, but note this does involve putting capital at risk compared with, for example, a money market."

With FNB Securities projecting at least one more rate decrease this year - potentially in October or November - and possibly another in early 2018, we are in the throes of what is expected to be a shallow interest rate decline cycle of around 75 basis points. This bodes well for existing holders of bonds.

Don't fall prey to cyber criminals

If you use a computer, a tablet or a mobile device, but you don't back up, have antivirus, a secure password and are not actively trying to protect your online identity, then read on because you are not alone. The South African Fraud Prevention Services (SAFPS) recently released statistics which show an increase of more than 200% in identify theft in South Africa over the past six years. And, says SAFPS, a staggering 8.8 million South Africans were caught out by cyber criminals in the past year.

Cybercrime is not just a plot line on popular TV shows like CSI: Cyber or Mr Robot, it is a very real threat in the real world and, as such, it's important to take active steps to protect yourself, your data and your identity.

Kovelin Naidoo, the man they call 'Mr Robot' at FNB Private Wealth, may be an expert in this field, but he still stands by some basic steps we can all take to ensure we are a lot safer in the cyber world. Some of these are just good digital hygiene, he says, like keeping all your devices up to date in terms of software.

"Run all your updates and, if it's Microsoft, keep all the security patches up to date," recommends Naidoo, who suggests making use of automatic updates. "Also make sure your security software is up to date. If you are a FNB Private Wealth client we provide you with an antivirus software licence. When you log in you can download a licence key for Trend Micro." Trend Micro is just one option, he notes, "any antivirus would do. As long as it is up to date."

Once you have these protections in place, then you need to be brutal with your password selection. The days of birthdays, names and star signs are over, today's hackers are wise to these tricks and will break through them quickly, so it is essential to ensure that you have a relatively strong password in place, particularly for your online banking. Naidoo suggests that the minimum password length should be eight characters and it should be relatively complex.

He explains: "If we look at hackers and how they operate, it is relatively easy to hack simple words from a dictionary, and family and pets names are freely available on social media. So we recommend you use password phrases - like 'My dog's name is Bingo!' - which would be incredibly difficult for a hacker to break into." So pick a favourite phrase from a book or a poem and type it as it appears in the book; capitals and spacing's included. Ensure you have applied this change to all your sensitive information, emails and applications. Social media accounts do have additional security and privacy settings, so enabling these also ensures the security and privacy of your information.

But, even if you've done all the right things, never fall in to the trap of being complacent. Cybercrime often features well-coordinated attacks and FNB works closely with law enforcement to try and identify syndicates. But there are also individuals operating in this space, says Naidoo. "We've all heard of ransomware over the past six months. And the barriers to entry there are low." To protect yourself in the event of ransomware, it is vital to back up your data on a remote storage device regularly, says Naidoo. Do so at least once a month. "So, if you can't gain access to vital information, then you can fall back on your storage and data."

But, ideally, you've put in place behaviours and security which keep you and your data safe. This includes being suspicious of any emails and attachments which seem unusual. "Most computers are affected through an email with a virus," explains Naidoo. "Cybercriminals are quite masterful when it comes to Photoshopping emails from municipalities or telecoms or banks, links might look right but that link will send you to a malicious site. So scrutinise links and attachments." Do remember that RMB Private Bank will never communicate by using links in emails, nor will be ask clients to send sensitive information or details via email.

Naidoo recommends, from a banking perspective, that you transact using the FNB Banking App. "There is strength in all our security but we believe the FNB Banking App is the way to go, because we know it is difficult for cybercriminals to target mobile applications," he says. "In the FNB Banking App you are fully in our ecosystem and you aren't reliant on other software. But outside of that App there is a whole ecosystem which we can't control."

For example, SIM swaps are an increasingly popular technique which cybercriminals use to gain access to your personal data. But, using the Banking App, allows the bank to pick up anomalous and suspicious behaviour which we can proactively block or request you to confirm via a trusted mechanism. "SIM swaps are the first step to identity theft and financial fraud by criminal elements, all they need is your cell number, a utility bill and a copy of your ID. That's it to legitimately do a SIM swap," explains Naidoo.

Identity theft is a big issue in the cyber world, but it transcends the digital sphere. In the real world you should always keep documents like IDs and passports in a secure location, says Naidoo, and shred sensitive information, like FICA or RICA documentation, once used. "Cybercriminals also look to target your garbage in the real world, and if I have your utility bill and your ID I can do a lot of damage. If you run a small business then also ensure that this security awareness extends through the organisation. If hackers can't get to you, then they will try those close to you, such as your PA or your children. So these practices should cover all devices and people in your circle."

Remember, concludes Naidoo, that all your banking needs can be fulfilled using the secure FNB Banking App, "from everyday banking, to renewing your car licence, to evaluating your property price. Many of our clients are still exploring the many things you can do with the App."

In the drivers' seat, courtesy of your smartphone

Finding the easy and the smart way to help you navigate life's hassles is central to the FNB Private Wealth nav» Home innovation. First we started with home buying, looked at the 'angst points' in the process and working out a slick system to help you with everything from instant home loan pre-approval for qualifying clients, to getting a free instant property estimate, to searching for your ideal home, and even finding schools and services in your new suburb.

Now we've rolled out nav» Car ... so you need never stand in line to renew your vehicle licence again!

With nav» Car we aim to make vehicle ownership and compliance just that bit easier, by giving you instant access to a range of tools using the award-winning FNB Banking App.

For starters, explains Orsheran Singh, Imagineer (Head of Product Development) at nav», you add your vehicle to the App by scanning your licence disc or using a manual entry method. This will give you instant access to information about your car such as value estimates, specs, licence reminders and will even alert you to traffic fines, which you can pay using the FNB Banking App.

For many the hassle-free ability to renew your licence at the touch of a button is the biggest winner. Simply make an in-App payment and your disc will be delivered to your door, says Singh. The handling and delivery fee of R199 excludes the renewal amount, and saves you queues, questions and the frustration of computer malfunctions at the Traffic Department or Post Office.

Plus, once you join up to nav» Car you can opt to take up the On-road PROTECT bundle too. For only R95 a month, this add-on puts you in the driving seat by offering:

  • Vehicle licence renewal assist: Free handling and delivery to your door for up to five vehicles (excludes renewal amount).
  • Fines assist: Instant fine notifications and discounts negotiated on your behalf.
  • Bail assist: 24/7 bail assistance at roadblocks.
  • Claims assist: Tyre repair due to pothole damage and road Accident Fund claims.

According to Jolande Duvenage, Chief Imagineer (CEO) of nav», every nav» solution is designed to free up your time and put you in control. "We underestimate how much the bank can help you," she says. "We are seeing the growth of the self-help client and we need to allow for that client." One way to do that is to ensure that the tools needed for ease of use and instant action are at your fingers tips courtesy of your smartphone.

Want to put nav» Car to the test? Simply open the FNB Banking App and select nav» Car. Right now this is the closest you will come to a self-driving experience!

Secure Chat. It's like WhatsApp, only better

The days of clients fitting in with companies are over. Today it's up to corporations to listen to their clients and deliver solutions that bring value. That's the approach which gave birth to Secure Chat, FNB Private Wealth's interactive messaging platform on the FNB Banking App.

According to Giuseppe Virgillito, Head of Digital Channel, the creation of Secure Chat started with this realisation: "Our clients require personalised service and we need to fit into how our clients' lives work." From there the team put themselves in the shoes of a busy client whose most convenient means of communication on a day-to-day basis is his or her smartphone.

"Our clients are busy and they often don't have time to call the bank, or go to the bank. So, with Secure Chat, they can, at their convenience, log in and have an open conversation with a skilled professional," says Virgillito. This puts your bank in your pocket, be it during a board meeting or while you are waiting for your next flight at the SLOW Lounge.

For those clients still learning their way around the FNB Banking App, clients can access Secure Chat by logging into the App, clicking 'More' and then opening up the 'Messages' tab. You'll access Secure Chat in the top right-hand corner.

The Secure Chat service automatically drives customers to the FNB Banking App, and this is an intentional move on the part of the bank. "The App establishes a secure connection irrespective of how you access the App, even through a public WiFi connection. Locally or internationally you can connect to a hotspot and talk to your banker with confidence because, by using the App, you are secure and authenticated," explains Virgillito. "This means that you don't have to go through the authentication process and this allows us to service you faster and let you get on with your day."

The App exists to help clients meet their daily banking needs, and Secure Chat adds to that service by giving FNB Private Wealth clients 24/7 access to a skilled professional who understands their requirements and can deal with any query. Or, if a client requires an additional level of service, the request can be rapidly escalated to the right expert.

"In time, Secure Chat will evolve into a one-stop-shop where you can talk to us day or night and where we'll be able to invite highly skilled and highly trained specialists into the conversation," says Virgillito. But, for now, you have access to a trained professionals and a personalised service which offers the following services:

  • Obtain stamped bank statements
  • Request Visa letters
  • Query debit orders
  • Get online banking and FNB Banking App support
  • Report fraud
  • Query your eBucks Rewards.

While these are all great services, Virgillito stresses that "a client should not be limited to these five things. The App and Secure Chat service are about giving you access to your information in the palm of your hand, all day and all night. Secure Chat is just a more convenient, more secure and more accessible way of delivering you the best service. Ultimately it comes back to 'how can we help you to help yourself'."

In this respect the award-winning FNB Banking App has been a huge breakthrough in banking convenience. The FNB Banking App has been analysed and ranked by MyPrivateBanking Research as the fourth best in the world, out of 70 mobile Apps from 30 leading wealth managers globally. "We are not only the first [banking App] in South Africa, but we have been renowned internationally," says Virgillito. This requires that FNB keeps innovating and ensuring that clients find personal value in using this platform, even if their support team generally deals with their banking needs or they are comfortably reliant on their private banker.

Secure Chat adds another layer to the FNB Private Wealth banking proposition. Like a WhatsApp conversation it is easy to use, says Virgillito, and a record is kept of every conversation. It's what our clients called for. And we answered.

eBucks Lifestyle brings you the definitive wine-tasting experience

eBucks Lifestyle has teamed up with Wade Bales Fine Wine and Spirits, the 'personal bankers' of the wine industry, to create three unique and exclusive Cape wine-tasting experiences for discerning FNB Private Wealth clients.

They have assembled three experiences from which you can choose:

Heritage meets contemporary flair at Steenberg

Your Steenberg experience includes a superb neo-bistro three course meal prepared by Executive Chef Kerry Kilpin at Bistro Sixteen82, an establishment rated among 20 of the world's best winery restaurants.

Marvel at the mountain views at Beau Constantia

Beginning at just R500 per person, you will enjoy a glass of Cap Classique on the steep agricultural slopes of Constantia Neck as you take in the beauty of the Beau Constantia boutique wine farm and gaze out over False Bay. Then enjoy a private tasting of all Beau Constantia's Premium Wines - each of which has been awarded more than 90 Robert Parker Points - in the owners' exclusive VIP Bronze Box Glass Conservatory.

You will be treated to the culinary excellence of acclaimed Executive Chef Ivor Jones (formerly of The Test Kitchen) who will prepare a gourmet set menu of eight tapas served over three courses at the Chef's Warehouse - a gastronomic delight that you won't want to end.

Reconnect with the land at Klein Constantia

Starting at just R1 000 per person, you will embark on an off-road 4x4 tour up into the spectacular vineyards where you will enjoy a glass of bubbly while taking in the exquisite views.

Thereafter, you'll be whisked off to the quaintly named Duggie's Dungeon for a traditional country-style lunch of succulent chicken, pickles, homemade jams and patès, freshly baked breads, delicious quiches, cured meats, cheeses and fresh salads.

Subject to his availability, you could also experience meeting Matthew Day, one of the new wave of young winemakers energising the Constantia Valley and get his personal take on the rich history of the Klein Constantia Estate.

And that's not all...

With December just around the corner, now is the perfect time to consider enhancing your Wade Bales Fine Wine and Spirits experience with additional eBucks Lifestyle special offers in order to get maximum value and enjoyment out of your Cape Town visit.

For example, you could enjoy a discount of up to 40%* when you fly from Johannesburg to Cape Town and when you make use of Avis car rental. Or you could enjoy a discount of up to 53%* on Rovos Rail, the most luxurious train in the world, as you relax in reconditioned wood-panelled coaches and recapture the romance and luxury of a bygone era.

When you get to Cape Town, choose to stay at Rovos Rail's stately seaside St James Guesthouses fronting onto Kalk Bay at a discount of up to 53%*.

Furthermore, to ensure that you enjoy your tasting experience without worrying about drinking and driving, take advantage of eBucks Lifestyle's point-to-point vehicle transfers from Avis.

To find out more about any of these exclusive offers or to book, log in to and click on the Lifestyle tab.

* Discounts exclude all taxes. Terms and Conditions and Disclaimers, including Tax Disclaimers, located above apply to your participation in the eBucks Rewards Programme. By participating in the eBucks Rewards Programme you acknowledge that you have read the latest version of our Terms and Conditions and Disclaimers and consented to them. Please contact our Contact Centre 087 320 3200 if you cannot access our Terms and Conditions and Disclaimers.

What's on?

Coffee and Chocolate Expo Cape Town 2017 7-8 October 2017, Durbanville Racecourse, Cape Town
If you're a coffee aficionado or lover of chocolate then brace yourself with a celebration of cocoa and beans during the third instalment of Cape Town's Coffee and Chocolate Expo. Find out about the origin of your favourite hot beverage and learn how to pour the perfect cup at the Chocolate Theatre. Additional highlights include a chocolate pairing with various liquors, whiskies and, of course, fine wines. Plus expert chocolatiers who be on hand to discuss the craft of fine chocolate making.

Prince Albert Leesfees 2017 3-5 November 2017, Prince Albert, Western Cape
For the sixth consecutive year this charming book festival returns to the picturesque town of Prince Albert. Words in all their manifestations are the focus of the Leesfees, and this year comedy and satire join the programme in the form of comic talent Nik Rabinowitz. For all the readers out there, this festival is a must!

Ficksburg Cherry Festival 2017 16-18 November 2017, Ficksburg, Free State
This annual festival, held in the sleepy town on the foothills of the Maluti Mountains, is the longest-running crop festival in South Africa, dating back to 1968. It is also Ficksburg's main opportunity to grab some of the action on the South African tourism circuit. A number of programmes run concurrently throughout the festival, including children's events, and live music to workshops. Popular events include wine and chocolate pairings, an introduction to cooking with cherries, and a range of sports events, including a fun run and road cycling race. A great event for the whole family.

Celebrating the 'can do' spirit

Entrepreneurs are the lifeblood of any successful and sustainable modern economy. Their innovation, drive and passion is to be applauded and supported. So, having celebrated entrepreneurship week in November, we turn the spotlight on the creators, the drivers, the entrepreneurs, the future business magnates in this, our last newsletter of 2017.

Not only do we look at the ways in which to foster business development for entrepreneurs, we also explore the world of young entrepreneurs and unpack ways in which to spur on children's instinctive entrepreneurial spirit. It's a fascinating world and one which holds great promise for the future of this country.

Despite this positive potential, entrepreneurship too is being hamstrung by the current spate of uncertainty in our economy and politics. Therefore many hopes are being hinged on the ANC Elective Conference in December to restore a sense of normality. As a result of the importance of this event to the future of our country, we take an in-depth look at the possible scenarios on the table and what each might mean for South Africa and for your investments in the year ahead.

A trend we have observed in 2017, which could be due to the political uncertainty in South Africa currently, is emigration. At this juncture we would like to remind clients looking to relocate to other countries to discuss the process and implications with FNB Private Wealth. For those simply looking to externalise more wealth, there are a number of options on the table, from taking advantage of the R1 million annual Single Discretionary Allowance, the R10 million annual Foreign Investment Allowance and a more regulated ability to take amounts in excess of R10 million offshore. In all instances we can provide further guidance and, where necessary, assist you via Ashburton Investments and FNB Securities.

Finally, with the festive season upon us, we take the opportunity to run through some essential security tips and insights. Our message is simple: Enjoy a hardearned rest and recharge your batteries, but remain ever vigilant in both the real and online worlds.

The FNB Private Wealth team would like to take this opportunity to wish you and your family a happy and peaceful holiday season. We look forward to finding new ways to help you in 2018.

Best wishes

Bell rings on a bruising year

Every year since 2008 commentators have looked back and described the years that was as a 'rollercoaster' ride filled with uncertainty. Egged on by Nenegate in December 2016, 2017 was billed to deliver more uncertainty to South Africa. And it certainly delivered.

The beginning of the year set the tone for a period during which South Africa - like the rest of the world, was impacted by external economic factors, as well as by internal political and policy concerns. The upswing in global growth - from which South Africa usually benefits - was quickly eroded by the unexpected cabinet reshuffle in March, which was followed by an earlier-thanexpected credit ratings downgrade by Standard & Poor's. Moody's and Fitch followed shortly thereafter. The economy entered a technical recession and, as I write, confidence remains weak with no signs of recovery, unless we see aggressive and forward-thinking policy amendments coming on stream rapidly. Furthermore, government finances have disappointed and it appears that fiscal consolidation has been placed on the back burner. This has increased the risk of another sovereign downgrade, as the country witnessed in late-November when Standard and Poor's again led the pack by downgrading South Africa's local debt. This time, Moody's and Fitch stood firm on their assessments.

But it's not all doom and gloom. There are green shoots worth noting on the economic, social and political front; all of which come together to paint a more positive picture of the future for our somewhat tender country.

We are currently living through a time during which previously hidden issues are being aired in public, from allegations of state capture, to the condition of our stateowned companies. This rising level of transparency is heartening, both from a civil society and a political perspective. In particular, we have seen a rising involvement in 2017 of business both taking a stand and being compelled to walk the compliance talk, putting the spotlight - quite rightly - on ethical practices, responsibility and integrity. In this context, the fact that people can voice their objections openly speaks to the strength of our Constitution and judiciary, as well as the country's strong culture of civil action. This trend will certainly continue in 2018 and beyond.

From an economic perspective, South Africa has just weathered a significant drought to produce what is likely to be the largest harvest of grain in 36 years. Broadly, and most fortunately, the economic underperformance experienced over 2017 has been cushioned by an upswing in global growth, commodity prices, and a search for yield. And, despite unsettling events at home, the rand has remained resilient. Inflation continues to moderate and this has allowed the central bank to ease interest rates. Our external balances continued to improve over the year the current account deficit for the first six months of the year is -2.2% of GDP, notably better than the -3.3% recorded for 2016.

These positives highlight the fact that, fundamentally, South Africa remains an attractive investment destination. And yet we have the threat of additional ratings downgrades hanging over our heads. Why? Well, these pending downgrades are a function of weak economic growth and the lack of implementation of growth enhancing policies. With that said, there are low hanging fruits which could boost confidence in the short term but which require follow-through in the medium to long term. In short, it is possible to turn the situation around. In the absence of action, however, South Africa will unfortunately find itself not only out of the World Government Bond Index, but facing multiple downgrades.

Much hinges on the outcome of December's ANC Elective Conference and the certainty or uncertainty which comes from that key vote. South Africa should know the outcome by 20 December 2017; this will give us guidance as to which policies will be adopted by the ANC and who will be leading the party into the 2019 elections.

Uncertainty and the undoubtedly rollercoaster year to come are, of course, also opportunities to examine how we do things, how we innovate and how we improve our service offering. Both from a strategic perspective and from a technological vantage point, we will continue to build on our digital, efficiency and client-centric focus of 2017. This trend will continue and accelerate in 2018 and beyond as we strive to constantly improve the way you transact, lend, invest and insure.

Like 2017, the next 12 months will raise challenges and bring up uncertainties. At FNB Private Wealth, we approach years like this with the conviction that how we steer ourselves through these events will set us up well for the future. In the words of the great statesman Winston Churchill: "Difficulties mastered are opportunities won."

Diversification key to managing uncertainty

Most countries around the world are currently living under a pervasive and globally relevant trend: Uncertainty. "The world has become a lot more uncertain over the last five or six years and this is not just South African politics," admits Chantal Marx, Head of Research at FNB Securities.

Marx cites the recent Kenyan elections, Brexit in the UK, the leadership uncertainty in China as Xi Jinping's tenure comes to an end, as well as geo-political tensions between North Korea and the United States as examples. "Globally there is a lot going on at the moment and, locally, the ANC Elective Conference in December is just our version of this same uncertainty," she says.

Much of this South African uncertainty springs from who the ANC will elect as its next leader and, most likely, the next president of the country. While much speculation about the ultimate outcome is engulfing the country currently, what is crystal clear is that whomever the victor, they will be faced with a strong need to prioritise economic growth if South Africa is to lift out of the stagnation.

"While political uncertainty remains extremely high, the adoption of appropriate polices will help lift sentiment and economic growth," says Mamello Matikinca, Chief Economist for FNB. FNB Private Wealth is, therefore, focusing less on the candidates and more on the macroeconomic policy and institutional regimes that could shape the macroeconomic outlook of the country. They are:

Positive structural change

In this scenario, says Matikinca, South Africa would experience domestic structural change that lifts productivity as well as business and consumer confidence meaningfully. Measures which need to be adopted to achieve this could include: ensuring political certainty against a market-friendly policy backdrop; privatisation of state-owned enterprises; increased infrastructure spending and an improvement in education outcomes, health delivery and a clamp down on corruption. In this regime, South Africa experiences strong economic growth, lower inflation and repo rate, and South Africa will eventually earn back its investment grade status.

Reformist stalemate

This stalemate outcome, explains Matikinca, would see a high degree of policy uncertainty being maintained and structural reform stagnation continuing. Business and consumer confidence would not improve if such a scenario were to play out. In fact, trend growth would remain weak, resulting in further pressure on government finances. South Africa would lose its investment grade status and sovereign ratings would remain under downward pressure. However, the independence of South Africa's institutions is seen as remaining relatively strong.


Populist policies that lead to more government intervention in the economy and a shift from fiscal prudence to fiscal carelessness would be adopted under such a scenario. The shift to popular spending would lead to increased domestic demand, which would be met by low production capacity. Consequently, inflation would lift notably and monetary policy would rise in response to higher inflation. Confidence and investment activity would decline yet further. In this situation, South Africa would experience a protracted recession from 2020 onwards which would translate into the further deterioration of government finances and multiple downgrades, says Matikinca.

In light of the above, it is clear that South Africa has everything to play for as it heads towards the December ANC Elective Conference.

What does this mean for your investments?
Irrespective of the outcome of the ANC Elective Conference in December, diversification will continue to be the dominant theme in the year ahead. This ensures that portfolio risk is reduced, while taking advantage of the growth opportunities inherent in a diverse investment portfolio. In this way clients will be well positioned to maximise their risk-adjusted returns.

Based on the above scenarios, our base case of the most likely outcome is the Reformist Stalemate which, we believe, had already been largely priced into the asset class valuations. So, our weightings are not too far from their respective benchmarks. More specifically:

  • Bond yields have already more than priced in junk status. We are close to a neutral positioning here.
  • Equity positions (neutral weighting) are very well diversified. There is a natural rand hedge bias with 65% of the portfolio likely to benefit from a weakening rand. Of this 57% reflects positions where assets, costs and revenues are derived from offshore, 6% reflect positions where costs are randbased, but where revenues flow from offshore, and 2% where positions reflect an element of import substitution. Exposure to South African economic sensitives, where revenues and costs are South Africa-based, make up 28% of the portfolio, while a further 8% of the portfolio reflects positions with an import cost component but where revenues are South Africa based.
  • South African listed property reflects a slight underweight position given the very challenging local economic outlook. There is, however, a significant rand hedge component with 41% of the portfolio exposed to offshore assets.
  • Offshore exposures also reflect a neutral stance right now, ahead of the December conference.
  • South African Cash exposures are slightly elevated to ensure that we have some powder dry to invest on any meaningful market-moving outcomes.

Looking offshore? We have your back

With talk of looming downgrades and amidst economic and political uncertainty, many South Africans are looking to externalise their wealth. Fortunately, explains Chantal Robertson, Head: Global Wealth Solutions at FNB Wealth and Investments. FNB Private Wealth's simple and effective processes and systems for building your wealth also extend to sending your money offshore.

South African residents have the broad ability to invest offshore and, as an FNB Private Wealth client, you have various options to diversify and access international markets. South African resident individuals of 18 years and older are entitled to:

Single Discretionary Allowance of R1 million

This may be used for a range of cross-border transactions, including travel, gifting and foreign investment. No tax clearance is required should you wish to avail yourself of all or part of your Single Discretionary Allowance for foreign investment.

Foreign Investment Allowance of R10 million

These funds can be used to invest in any foreign asset and you have the freedom to structure such investments using an offshore trust and/or company. This allowance is subject to tax clearance, but fortunately FNB Wealth and Investments can assist you with the tax clearance application process.

Foreign investment in excess of R10 million

Not many people are aware that an individual may apply to take out more than the allowances mentioned above. This application requires tax clearance, a full South African Revenue Service audit as well as approval from the South African Reserve Bank. Certain conditions are imposed on how and what you invest in offshore, however thr FNB Wealth and Investments team can guide you through the process.

With FNB Private Wealth's innovative solutions your investment strategy can be fairly flexible whilst remaining within the regulatory framework, thereby giving you the freedom to choose how and where you would like to invest your wealth.

Plus by using FNB Private Wealth's online banking service or the FNB Banking App, (login and go to the Forex tab) you can transact internationally while saving on transaction charges, securing a better exchange rate, and even enjoying eBucks rewards on Global Payment and Global Receipt transactions (standard eBucks Rewards rules apply). For more information about the Foreign Exchange services search for 'Forex' on the FNB website. If you're looking to invest offshore and require more information please get the ball rolling by speaking to your Private Banker.

A gentle reminder...

Any unutilised portion of your Single Discretionary Allowance (SDA) and Foreign Investment Allowance (FIA) will fall away on 31 December 2017. Should you still wish to make use of the 2017 FIA, we encourage you to get in touch with us as soon as possible to get the process moving as the tax clearance process can take up to one month.

Wealthy 'angels' getting behind entrepreneurs

Each November, a week is dedicated to celebrating the world's entrepreneurs. Globally this takes place through discussions, presentations and the active support of current and would-be entrepreneurs. Business owners, large and small, are the lifeblood of any economy; and fostering their development and success is widely regarded as boosting a nation's bottom line.

Anyone who enjoys history, and particularly unpicking the makings of the United States of America, will point to the spirit of innovation which spurred on that country's 'start-up' culture and capitalistic credentials. In his book, Americana: A 400 Year History of American Capitalism, Bhu Srinivasan looks at the influence of entrepreneurs like Andrew Carnegie and John D Rockefeller on that country, and highlights the United States's gold-rush past and make-it-big dream. "I think that the cultural aspect is certainly there," Srinivasan said in an AEIdeas podcast in October 2017. "I mean, we do encourage entrepreneurship in very big ways. The fact that you have a lack of stigma in this country with failure - that I think is a very big thing."

In South Africa, this failure-friendly, risk-open approach to starting a business is less evident, which is likely why we have fewer Zuckerbergs, Gateses and Jobses rising up. However, in the ranks of the wealthier segments of society, many high-net-worth individuals are increasingly willing to take on more risk when investing in promising business start-ups. Often, this investment finds its expression through early-stage angel investing (which tends to provide seed capital courtesy of affluent families or individuals) or, in more formalised cases, venture capitalism (for start-up businesses or to facilitate expansion).

In South Africa, the match-up between willing angel investors and good entrepreneurial ideas holds great potential. It also presents endless opportunities for wealthy individuals who have a keen eye for talent and are eager to back viable concepts in order to make a good return.

"However, angel investing remains highly risky and can result in financial losses if proper due diligence is not conducted," cautions Eric Enslin, CEO of FNB Private Wealth. This includes investing in expert advice. You need to be adequately informed about the sector, the type of business, current and past trends, as well as risks, in order to determine if you are making a good investment, says Enslin. Seeking advice from knowledgeable experts who have earned their stripes in this field can only work to your advantage.

He points out that would-be angel investors should also bear the following in mind:

  • Beware of the risks

To be successful you need to have an appreciation for entrepreneurship. Given the high failure rate of new businesses that get started in South Africa, you have to make room for failure. Success is never guaranteed.

  • Don't factor in overnight returns

Patience is important. You may only begin reaping the rewards after 5 to 10 years.

  • Look behind the concept

While you may be captivated by an innovative concept, don't lose sight of the basics, like a comprehensive and succinct business strategy, drive and determination of the leadership, passion, risk appetite, expertise, financial management and business culture.

  • Get involved

Angel investors often offer more than just capital injection, but have a good level of involvement in the businesses they are supporting. This can be in the form of mentorship support or offering strategic direction as an executive board member.

"Angel investing is a long-term investment strategy and should not be rushed into, but rather carefully considered and researched in order to prevail as part of a sustainable wealth building plan," adds Enslin. Investing in the personal and professional growth of the entrepreneur is also of the utmost importance. As much as affluent individuals enjoy the input of wealth advisors and specialists working behind the scenes, so too do entrepreneurs need financial support and know-how. In this respect FNB Business, voted South Africa's Top Business Bank by the Sunday Times Top Brands Survey 2017, is structured to work with entrepreneurs to streamline their financial operations.

FNB Business provides free accounting services, such as Instant Accounting, online documents reservation services, and is currently forming a partnership with the CIPC to digitise South Africa's business registration processes. All pain points for the average entrepreneur.

"Our message to entrepreneurs is that we understand that it isn't just business to them and that is why we remain committed to providing meaningful solutions to help them grow," says Mike Vacy-Lyle, CEO of FNB Business. "Going forward, we have some exciting developments that will take us further in our digital journey, and through this we will continue to launch amazing services, products and partnerships, all aimed at taking the anguish out of doing business."

For all young entrepreneurs willing to take the plunge of being a self-starter in an effort to make their own mark, there are some fundamentals to success, believes Enslin. Entrepreneurship can only be successful if a solid wealth management plan, which encompasses goals and aspirations, has been established. When executed correctly the model and principles can be replicated across multiple generations, he says. That includes building a profitable venture which can be sold for a premium, being open to diversification, looking towards the long-term future of a business, and taking each step along the road seriously.

Launching, running and nurturing a business is not a short-term game, it is a responsibility which - for some - will be handed down from generation to generation; all the while growing communities and empowering individuals. This is why we celebrate entrepreneurship and those who dare to dream.

Outwit villains with vigilance

December may be the season to be jolly, but it also goes hand-in-hand with fraud attempts, theft and mall robberies. While some events are thrust upon us, others we have full control to avoid. You can outwit the scammers and the skelms, here's how and what to be aware of:

ATM shoulder surfing

Since the first ATM changed the way we get cash, deposit cash and bank, back in 1981, ATMs have sprung up around the country. Today there are over 29 000 ATMs around South Africa, reports BusinessTech, making these handy machines a simple, effective and efficient way to bank. But that doesn't mean you don't need to be vigilant when using these machines, warns Cheryl Odayar, Head of Legal, Risk and Compliance at FNB Private Wealth. She points out that 'shoulder surfing', a method used by fraudsters to take your card and view your PIN details while you are using an ATM, is something of which you should be particularly aware of.

'Shoulder surfing' can happen anywhere and to anyone, but there are some habits you can get into to protect yourself:

  • Don't allow anyone to help or interrupt you while using the ATM.
  • Be aware of your surroundings and who is around you.
  • If you need help, only ask an FNB appointed official.
  • Cover the keypad as you input your PIN with the other hand and stand as close to the machine as possible to shield the keypad with your body.
  • Put your cash, card and slip away before stepping away from the machine.

If you are a business owner and you deal regularly in cash deposits, then you must exercise particular caution, says Odayar. If anything seems dubious or out of the ordinary, then cancel the transaction and report your suspicions by calling the number on the back of your FNB card.

Stay alert to avoid card skimming

Another common technique used by criminals is card skimming, where a skimming device is installed into an ATM or a POS device (mobile point-of-sale terminal) to obtain the details of the card. If, when inserting your card, the port seems unstable or 'wobbly' then cancel the operation immediately and report the machine. An ATM machine will always ensure a snug fit for your card.

Keep your card, PIN and digital login details secret

Never compromise your PIN details, as it is your personal gateway to your account. This includes never writing it down or sharing it with anyone - even your family, friends and bank officials.

Similarly, when it comes to online banking login details, these too should be private and for your eyes only. Nobody should have your login information but you.

This also applies to online shopping, where you have to input your credit card details onto external websites. "Always use secure and reputable websites for online shopping," says Odayar, "when in doubt make sure that the web address starts with https:// and that there is a padlock image in the address field." If not, you might be handing over your details to someone nefarious.

SIM swap fraud: Beware of signal loss while transacting digitally

SIM swap fraud occurs when SIM card details are changed so fraudsters can access your One-Time Pin (OTP) codes and SMS notifications. "If you are banking and you lose reception while expecting a notification, then log off, call your network provider and check if a SIM swap has been activated and change your login details immediately. Remember, if you use the FNB Banking App there is an additional layer of security to avoid SIM Swap Fraud.

Save FNB Fraud's contact details

Keeping an open line of communication with the bank is essential. If your cellphone is stolen, or if you change cellphones, you should immediately let the bank know in order to de-link your FNB Banking App from the previous device and reconnect to your new or replacement cellphone. This can be achieved via Online Banking or by contacting FNB.

There are also instances where things go wrong with technology so, if your card is swallowed by an ATM, ensure you call FNB immediately to cancel the card.

Keep the FNB Fraud number saved in your phone:
087 575 9444.

Remember: When in doubt, err on the side of caution. Leave the risk taking for the roulette table and not for the banking universe.

Card & account control at your fingertips

If you can remember the days of pre-online banking, when lengthy queues and branch visits were the order of the day, then you'll also remember how any change to your banking profile or account required time and patience. These days, using FNB Online Banking and armed with the FNB Banking App, you have full control over your cards and your accounts.

No matter where you are, sunning yourself on a tropical beach or exploring a new city, FNB Private Wealth's digital channels allow you to quickly and securely manage your cards. At the touch of a button or the swish of a screen you can:

  • Cancel lost/stolen cards or order replacements*
  • Activate new cards
  • Control your transactional limits (both internationally and domestically)
  • View or change your PIN
  • Temporary block misplaced or stolen cards on the FNB Banking App and lock/unlock when required.

There is no better travel companion than the peace of mind which comes with secure, flexible, self-sufficient banking, courtesy of the FNB Banking App and Online Banking. Now the only queues you need to worry about involve getting into a renowned Michelin starred restaurant or one of the world's finest galleries or museums.

*Simply download the FNB Banking App, select the arrow next to the Account Number, then "Cards". Select the card, then the "Cancel Card"/ "Update Limits" option and follow the prompts.

eBucks Lifestyle unveils frontrow sporting experiences

eBucks Lifestyle has combined its expertise in travel with the best in sport to bring you the ultimate in sports travel experiences for the new year. What does that mean for you as a valued eBucks Lifestyle client? Well, this new offering affords you the opportunity to enjoy some of the world's most iconic sporting events courtesy of our tailored sporting getaways.

For 2018 we've created an array of unforgettable opportunities for the sporting enthusiast, here are four to whet your appetite:


Golf's most famous names kick of the year by competing for the coveted Falcon Trophy at the Abu Dhabi HSBC Golf Championship. As an eBucks Lifestyle client you'll not only enjoy four days of up-close excitement, but you are invited to play three rounds at any of the following prestigious golf clubs: Saadiyat Beach Golf Club, an unparalleled location skirted by the cobalt waters around Saadiyat Island; Abu Dhabi Golf Club, a 27-hole oasis in the desert dotted with palms and saltwater lakes; and Yas Links Golf Club, a magnificently designed course which is renowned for testing professionals, enthralling amateurs and exciting beginners.

When: 17 to 24 January 2018
From R21 320 per person sharing


Be there for the most anticipated match of the 26th English Premier League Season as Manchester United face Liverpool at home. You'll be treated to the finest Lanchashire hospitality courtesy of your eBucks Lifestyle credentials, while being entertained by outstanding action from the uninterrupted views of the luxurious Sir Alex Ferguson Stand.

When: 9 to 12 March 2018
From R24 800 per person sharing


Enjoy summer in July at the All England Lawn Tennis Club as the world's best tennis players battle it out for the prestigious title of Wimbledon Champion. Your eBucks Lifestyle membership will secure you Platinum Hospitality and a sought-after reserved seat for one day on Centre Court to enjoy the atmosphere and enchantment that comes with the world's oldest tennis event.

When: July 2018
From R40 070 per person sharing


The US Masters is one of golf's most prestigious events. This invitation-only tournament is in its 82nd edition at the celebrated Augusta National Golf Course and continues to attract the cream of the world's golfers. Through eBucks Lifestyle, enjoy access to the Rocky Patel premium cigar lounge and grab the chance to show off your skills at the three-hole putting course.

When: 1 to 9 April 2018
From R42 580 per person sharing

As we move into 2018 now is the ideal time to pen some downtime into your diary and secure your front-row seat When: 17 to 24 January 2018 at some of the world's finest sporting extravaganza.

Foreign exchange made easy

There are countless things to do before you jet off for a well-earned break: checking your phone has roaming, getting the dogs into kennels, reading up on your chosen destination and ensuring you have sufficient travel insurance in place.

High on your list of things to do is likely to be foreign exchange. Fortunately, FNB has your back when it comes to quickly and easily placing your order, be it in foreign notes, a Multi-currency Cash Passport™ (travel card) or a combination of both. Simply log into your Online Banking profile, order your forex within 60 days of departure and, hey presto, it will be delivered at no charge to your home or office. You can also top up the balance using FNB Online Banking while travelling, if something appealing unexpectedly catches your eye.

Plus you'll benefit by earning 50% back in eBucks on your transaction charges when you spend foreign currency online to pay for the likes of accommodation, car hire or theatre tickets in advance. Showing that it really does pay to plan ahead!

With the rand likely to come under more pressure in the months ahead, given poor fundamentals in the economy, there are many travellers who are looking every further ahead, to next year's holidays or even 2019 and beyond. If, like these individuals, you are worried about the exchange rate's impact on your vacation plans then consider opening a FNB Global Account, which allows you to save in foreign currency at any time of the year. Off to Greece? Then save in euros and spend in euros? Heading to the Big Apple? Then save in euros and spend in euros.

In addition to this, travellers who have a Multi-currency Cash Passport can transfer funds from their Global Account and use the Cash Passport to make purchases and withdraw from ATMs displaying the Mastercard acceptance mark in any of the four currencies available on the card.

Safety tips for trips

While you are on the road or outside the country this festive season, remember that your team of dedicated FNB Private Wealth support bankers are just a message away. Connect via Secure Chat or by using the FNB Banking App anywhere in the world and enjoy the same convenience when banking at home.

The FNB Banking App universe is fully secure, making transacting via the App your best option for international banking transactions. Simply log on via a Hotspot and we'll take care of the security. Plus, for your peace of mind, enable overseas roaming to get SMS alerts to help you monitor your spending while travelling.

By virtue of using the FNB Banking App we'll know if you are travelling abroad, but it's always better to be safe than sorry so do notify your Private Banker about your trip, where you are visiting and how long you'll be away. This will ensure we keep a vigilant eye on your accounts in the event of any suspicious activity.

Bear in mind that fraud is not just a South African affair - international gangs and syndicates prey on overseas tourists so, if you are out of the country or even just out of town, be mindful of protecting your personal information against identity theft. Don't leave cards and passports lying around your hotel room, rather make use of the safe in the room. Also, never forget that FNB will never communicate with you via email or SMS in a manner that requires you to open links, so be aware of the nature of emails and SMSes you may be receiving on your cellphone. When in doubt, delete.

The Ins and Outs of Priority Pass

While travelling abroad FNB Private Wealth clients have the option of kicking back in a variety of independent airport lounges between flights by making use of the complimentary Priority Pass service courtesy of eBucks Lifestyle.

To qualify for your complimentary Priority Pass Membership, you need to order a Priority Pass card online. You can do this through the FNB Banking App or via (log in and then select the Lifestyle tab). It takes 17 working days to process your Priority Pass order, so don't leave the application process to the last minute if you are planning to travel in the near future.

Priority Pass gives FNB Private Wealth clients access to a network of more than 700 airport lounges worldwide, provided you have booked in advance and have the required reward level. Because Priority Pass works on a tiered rewards level, make sure to check that you qualify for the benefit before applying by checking on the FNB Banking App or calling the Service Suite on 087 730 6000. Entries which exceed the number of complimentary visits available to you, will be billed to your account at US$27 per entrance per person. Rather be safe and view your remaining available visits ahead of time via the FNB Banking App or

Remember, Priority Pass is exclusively for international airport lounge access; not for domestic lounge access. Domestically you can make use of the the home-grown SLOW lounge, which is found at OR Tambo International, Lanseria International, Cape Town International and King Shaka International Airport.

To view your complimentary SLOW lounge visits available to you, please log into the FNB Banking App > eBucks Rewards > Airport Lounges.

Please note: If you do use a Priority Pass lounge in South Africa the charge will be US$27 per entrance per person.

Budding business owners need skills, guidance and faith

It is often said that South Africa is a microcosm of the world, a fact that is reflected in the country's youth employment statistics.

Globally those under 24 years of age comprise 40% of the world's population and 41% of the world's unemployed, according to the United Nations. In South Africa, those younger than 34 comprise 66% of the total population and, in 2017, Statistics South Africa noted that more than 54% of youngsters under 24 were unemployed.

So, not only does South Africa mirror the global state of affairs but the situation here is worse. Faced with these daunting statistics, entrepreneurship has been touted as an elixir for the country's youth and as a possible engine to ignite economic growth across the board. The question is: How best to nurture the instinctive entrepreneurship of young South Africans to enable them to spot opportunities and have the confidence in their abilities to start businesses across multiple sectors.

Within the FirstRand Group, two avenues for youth entrepreneurial support exist: Leveraging off the expertise within divisions such as FNB Private Wealth for the entrepreneurial children of wealthier individuals and, for young hustlers making their own way in the world, FNBy's youth accounts have been especially tailored for those younger than 25. The FNBy package includes a yCard, free online and FNB Banking App usage, unlimited internal transactions, and unlimited card swipes. Perhaps the biggest benefit of this package is access to a library of educational videos to upskill the young in terms of their money saving and spending habits.

For FNB Private Wealth clients, their future business tycoons do have the added advantage of access to an incredible platform of experts from investment to offshore lending, business advice and family services. This access is vital not only from an entrepreneurship perspective, but also from a legacy point of view. According to a study published by the Williams Group wealth consultancy in 2015, 70% and 90% of wealthy families lose their wealth by the second and third generation respectively. For such families, the need to pass on legacies to a younger generation of leaders who will be responsible for breathing new life into wellestablished corporations or scaling high-growth potential businesses to new levels is essential.

Entrepreneurship in this wealth context can only be successful if a solid wealth management plan, which encompasses goals and aspirations, has been established. When executed correctly the model and principles can be replicated across multiple generations. But, getting this right requires expert input and guidance.

Mentorship is not only vital for wealthier individuals, it is an essential component when fostering business abilities. HDI Youth Marketeers's Client Service Director, Cuma Pantshwa, believes access to mentors can help young people to examine their business plans and ideas, and set clearly defined goals. This, together with the ability to learn relevant skills, is of utmost importance to this generation - particularly those looking to embark on an entrepreneurial path. "What we've found is that young adults want money. And, in this space, they seek brands that will help them to achieve. They seek brands that will get them to the next level and help them achieve their dreams. They are worried about their futures and whether they will get a job, and that is where entrepreneurship comes in, because they've identified that in the midst of huge unemployment there is a gap," she says.

HDI, which shares its youth insights annually through the Generation Next report, points to a youth generation that is hungry for success (22% want to be rich and 27% want a good career, according to the 2017 report) and who prize quality education (29%). They have all the ambition, resilience and drive required of entrepreneurs, but they are being let down by their know-how. Pantshwa notes: "The missing link in South Africa, I believe, is that the education system is not giving young adults practical entrepreneurial skills and key business tools to enable them. We've also identified that young adults want brands that can help them get these skills; from how to sell yourself to how to turn your business idea into something lucrative. They are looking for these skills."

When it comes to know-how, business management and executive skills rank way above all other abilities (at 20.9%) and 19% of the youth polled in the Generation Next report regard being their own boss as the coolest job imaginable - an insight which shows a decided affinity with being in control of their own destiny.

Because this group is so aspirational, because they want cars and luxuries, international travel, property ownership and the ability to study further, they are well suited to entrepreneurship; they just need greater exposure to this as a career option. That said, a whopping 40% of youngsters polled by HDI already want to open their own business, says Pantshwa, who believes South Africa's youth are well able to succeed in their entrepreneurial ambitions. "They are innovative and they are wellconnected in terms of digital, so they are in a good space to evolve. They have what it takes to come up with businesses, so we have to help create an environment for them - and critically their parents and families - to see this as a viable career choice."

In line with this thinking, HDI runs a knowledge-sharing platform called Shift which aims to inspire and encourage youngsters towards greatness by exposing them to talks at university as well as through online interactions. At the younger level, educational institutions like Future Nation Schools - founded by former FirstRand CEO Sizwe Nxasana and his wife, Dr Judy Dlamini - and SPARK Schools are also changing the way they educate children to develop more inquisitive, technologically savvy and self-motivated youngsters; all traits which future entrepreneurs need.

Where businesses and brands, parents and families across the spectrum of society can play a role is by encouraging youths to take action and then supporting their efforts; this is critical if South Africa is to pave a better way forward for the next generation and encourage entrepreneurship among the youth to bloom. For companies, there is much value to be imparted by working to understand the pain points for young business owners, be it around registering a business or opening an account, how to get market access and funding, or even accessing basic how-to information, all while increasingly shifting services into the digital realms with which youngsters are so comfortable. "It's also important that brands and organisations help these young entrepreneurs by investing time and skills which will, in turn, unlock massive potential since youth entrepreneurship offers innovative solutions for economic growth among our young people," says Pantshwa. Make no mistake: their future is our future.

A game-changing year

Already 2018 will go down in history as a game-changing year. From a delayed State of the Nation Address by President Cyril Ramaphosa, to a challenging Budget Speech, which saw the first increase in VAT for 25 years this eventful few months has spurred on positivity and cautious optimism in the future of South Africa. Moreover, the ratings agency upgraded the country's credit rating outlook from negative to stable. As a result, we've seen investor confidence come out of hibernation.

This positive upswing in sentiment is the reason why we are focusing on a "leveraging" solution. Securities Based Lending is an underutilised alternative to unlocking liquidity or to introduce gearing into portfolios. This is an interesting option and certainly has a place within client's wealth portfolios. We remain focused on providing holistic solutions that address the diverse needs of our clients. As a result, we continue to enhance our Global Wealth Solutions platform to enable our clients to effectively diversify their portfolios offshore.

Finally, we proceed with our mega-trends series, taking an intriguing look at the 'sharing economy' and examining the implications this shift has for established businesses and investments. And don't forget to view the latest offerings from eBucks Lifestyle.

A positive and optimistic tone has certainly been set for 2018. We look forward to helping you harness these opportunities.

Best wishes,

Eric Enslin, CEO of FNB Private Wealth

Banking and investing for the global citizen

Travel, information at the touch of a button, and 24/7 news has made the world a smaller place. South Africa is no longer a million miles from New York or Beijing and we no longer see ourselves as just citizens of a single country. As our identities have transcended geographies and political borders, so too have our banking and investment requirements changed. Today we have, and in fact demand, the freedom to cross borders and transact anywhere in the world.

But where to start?

"When articulating the freedom that individuals now have, we talk about global citizens, and this encompasses a varied audience with different needs," explains Chantal Robertson, Head: Global Wealth Solutions at FNB. "Some are young professionals who are starting their journey, while others are established business owners who are seasoned travellers with different requirements. Global Wealth Solutions is a complete offering comprising the best that the FirstRand Group has from a forex, banking and foreign investment perspective. It caters for the first-time international investor to the seasoned pro by providing an end-to-end cross-border solution that can be tailored to suit your specific needs."

What that means in practice is an offshore investment solution that encompasses foreign exchange (forex) online, a variety of offshore saving options, tax clearance assistance, and ongoing advice and expertise. "Our role is to deliver a customised solution based on your personal circumstances and investment goals, whether you are looking to invest offshore for your child's tuition at an international institution, if you wish to acquire an apartment in London, New York or Berlin, or you are simply looking to hold a portfolio of foreign equites," explains Robertson.

When transacting across borders each rung of the ladder invites more questions and requires specific expertise. Often the initial conversation starts with a discussion around forex and the annual allowances, and the question 'what can I do and how?' arises. In some cases the single discretionary allowance of R1 million per South African resident of 18 years and older is sufficient, while some clients require assistance with tax clearances to take advantage of the annual foreign investment allowance of R10 million.

Once a client has made the decision as to which foreign currency to move into, then the conversation becomes: 'But I don't have an offshore bank account, how can I open one?' Here FNB Private Wealth has two options on the table: the FNB Global Account or a FNB Channel Islands account.

What is the difference between the two accounts? And which one do you need?

The FNB Global Account, explains Robertson, is a simple currency account that can be opened online within a few minutes. "You can see your Global Account on your FNB Private Wealth banking profile and it is easy to fund." For a first-time offshore investor this is the best way to start and it allows for monthly amounts to be accumulated in your chosen offshore currency. "Should you be using the Single Discretionary Allowance, no tax clearance would be required," notes Robertson.

Your Global Account is extremely beneficial when you are travelling, as you can fund your Multi-currency Cash Passport from this account using the FNB Online Banking platform. When it comes to investing, this account can also be regarded as a stepping stone to foreign currency exposure.

If you have built up a tidy balance then it makes sense to use these funds to fund a new FNB Channel Islands account or, if you are looking to shift from one fund to another then your Global Account can serve as a handy investment clearing account; allowing you to move foreign funds without having to switch back into rands and out again.

FNB Channel Islands is a branch of the FirstRand Group, based in Guernsey. It is regulated in the Channel Islands, and provides all the benefits that one would expect from an offshore bank account, including online banking and a debit card. In addition, you can link your Channel Islands account to your FNB profile in order to keep an eye on your funds, but you cannot transact due to the different jurisdictions. For that you have access to online banking via the Channel Islands website as well as the FNB Channel Islands team, who are fully versed on the regulatory environment and saving options available.

An excellent benefit is that your FNB Channel Islands account will not attract any fees, provided that you have a minimum balance of £2500.

When you have acquired sufficient offshore change, then the next question becomes: 'What now?' And, again, Global Wealth Solutions can seamlessly step in with a FirstRand-tailored solution courtesy of FNB Securities or Ashburton Investments. With the help of skilled experts you take advantage of the market-leading advice of FNB Securities, voted Intellidex's Top Advice Broker in 2017, or buy directly offshore funds such as the Ashburton Global Growth Fund or the Ashburton Chindia Equity Fund, a repeat winner of the prestigious Raging Bull Award. Or ask for advice on investing in other third-party funds.

"Being a global citizen is no longer in question, but it is a different journey for each one of us," says Robertson, "and offshore investing is not only the domain of the super wealthy or the well connected. Global Wealth Solutions as a client value proposition is accessible across the bank's client base, in that it is exactly the same offering for FNB Private Clients and FNB Private Wealth. This means you can grow into your account and investment options as your wealth grows." And FNB will grow with you each step of the way.

Take note

Remember that South African residents over the age of 18 can take funds offshore using the following allowances for 2018:

  • Single Discretionary Allowance of R1 million:
    Individuals can use this for travel, gifting or foreign investment and no tax clearance is needed. But be careful not to exceed the R1 million limit. And remember that if you wish to use any part of this allowance for foreign investment, you must be registered for tax purposes.
  • Foreign Investment Allowance of R10 million:
    You will require tax clearance to take advantage of this allowance, but once received you can invest the funds in any foreign asset and can also make use of offshore trusts or companies to invest. We have an experienced team who can assist you with your tax clearance application.
  • Foreign investment in excess of R10 million:
    This process requires approval from both the South African Revenue Service (SARS) and the South African Reserve Bank (SARB), and can take from four to six months as it entails a full SARS audit. In addition, the SARB imposes certain conditions on the proposed investments and the holding thereof. While we cannot assist with the SARS process, FNB Private Wealth can provide guidance on and the submission of the SARB application.

Securities based lending lets your assets work for you

Globally the use of Securities Based Lending (SBL) has found particular favour in the United States with the likes of Morgan Stanley and Bank of America leading the way. Both recognise that borrowing is an important component of wealth management and achieving key financial goals, so making use of SBL within a portfolio puts more options on the table for the client.

So, what is SBL?

Mishaal Desai, Head: Securities Based Lending at FNB Private Wealth, explains that the concept involves using investments in listed shares, unit trusts and offshore shares (among others) as collateral in order to raise finance for a range of activities. "The beauty of the product lies in its simplicity," says Desai. "SBL allows clients to gain access to liquidity without having to liquidate existing investments."

In short: SBL allows you to leverage off your assets, but on your terms. Rather than liquidating an investment account or shares when you need access to funds, often incurring hidden costs such as tax liabilities and a loss of future growth along the way, SBL offers a lending solution that is time sensitive, flexible, simple and effective. Which is why international investors are increasingly interested in including SBL among their wealth management tools.

This same interest is increasingly being observed among South African investors, particularly those in the high-networth category. In terms of FNB's SBL offering, Desai says it has certainly been attracting attention. "Word of mouth has spread quickly across our client base, with particular interest from existing clients with security portfolios and senior executives with vesting share options," says Desai. "Together with favourable interest rates and turnaround times to implement, there are no restrictions on where the funds can be applied. So the SBL product is a powerful tool in unlocking liquidity and preserving wealth."

When to use your SBL?
Since FNB launched its SBL product, clients have been eager to take up the facility to gain exposure to other business ventures, to obtain property overseas, for vehicle financing and, in increasing numbers, to pay off tertiary education fees or MBA study costs at the start of the year. According to UBS Bank in the United States, the most common uses for SBL in that market are to fund real estate purchases and business opportunities, to refinance high-interest debt, to pay tuition fees, taxes and other large yet unexpected expenses.

Desai explains that, in South Africa: "The most successful deals concluded to date have been to introduce gearing into the clients' portfolios, thereby increasing the rate of return on the investment. By making use of a geared portfolio, the client can then set stop-losses in line with his or her appetite, while enjoying the full appreciation in portfolio value. Given the performance of the markets over the years, clients have been able to generate substantial value through the gearing effect."

Desai notes that structures implemented for clients with cyclical cash flows have also been a popular use of the SBL product. "Clients in cyclical industries may have excess cash on their balance sheets for large periods of time, which is a major hindrance to investing for the long term. In these instances, the client may elect to invest cash into higher-yielding investment portfolios and make use of an SBL facility to access liquidity for the shortterm against their long-term investment strategy," says Desai. "In essence, SBL is able to create a solution for clients in cyclical industries or professions."

How it works
Once the investment portfolio has been accepted as collateral, the client may choose from two repayment profiles offered by the bank: an interest-only option, which involves monthly repayments on the interest portion, and an interest roll-up option, designed to work around client cash flows. The interest roll-up portion is particularly useful when providing tailor-made structuring solutions to match interest payments with a client's cashflow constraints.

Step one
While there are several applications for SBL within your investment universe, it is important to start this journey by educating yourself about the facility and working with your trusted advisor to determine if SBL has a place in your portfolio. Certainly as a holistic wealth management tool there is growing demand for the inclusion of such lending options, but taking the time to assess the appropriateness, risk and potential for you or your business is vitally important.

Involve your family in financial decision-making today

Often a failure by families to deal with important financial decisions as a unit can hamper members of the family from fully understanding complicated - and sometimes not so complicated - money matters. This is why involving your spouse and children in finances, and empowering them to make the right financial decisions on their own, is a worthwhile undertaking.

This family-focused approach starts, believes Preenay Sathu, Head of Advisory at FNB Private Wealth, by encouraging your spouse and your children to be financially informed. You could start by introducing your spouse to your private banker and inviting them to attend important annual reviews. This level of exposure can help to ensure that your spouse is capable of managing your estate in the event that you cannot, or at least be fully informed of the process and who will be managing it.

Including your spouse in wealth planning decisions also has implications for the structuring of your estate, where, for example, you save exponentially on estate duty by bequeathing most of your assets to your spouse. "Similarly," explains Sathu, "you would want to ensure that, where appropriate, there are beneficiaries nominated on your insurance policies so that your estate is able to save on executor's fees." These are discussions to be had as a family, to ensure that everyone understands why your estate is being structured the way it is. It is also vital that one's spouse and loved ones are fully aware of all assets and liabilities held as part of your total financial portfolio.

Central to this approach is your FNB Private Wealth Banker. "Your private banker, working hand-in-hand with a team of experts, will advise not only you but will take a holistic family approach which considers the needs of the household. Your private banker will then work to find the most appropriate experts to respond to the financial needs of yourself and your loved ones, including the traditional banking services you require," says Sathu.

Yes, it can be complicated when you bring another person into your financial decision-making, admits Sathu, particularly when philosophies diverge, but there are distinct benefits to this approach in terms of planning, approach, execution and risk diversification. Men and women have different strengths and perspectives when it comes to money management, and your superconnected, confident and socially-minded Millennial children can bring a different level of understanding to any financial discussion. So creating a space for all parties to be heard is important.

For many parents learning to speak the same financial language as their Millennial children is a challenge, so creating space for meaningful conversations about money, legacy, risk-taking behaviours, borrowing and the future is vital. In 2017 the Wells Fargo Millennial Study in the United States painted a worrying picture of a Millennial generation that is anxious about finances, with 98% focusing on financial security as important but only 32% feeling confident in their financial status.

At the time of the report's release, Wells Fargo Asset Management CEO Kristi Mitchem told a media gathering that: "Millennials tend to put their money worries in a box, separate from the rest of their lives. They need to take them out of the box and deal with the things they can."

Over and above talking to not only Millennials but all upand- coming generations about money, parents can and should leverage off the range of FNB Private Wealth expertise to put in place trusts, insurances and retirement planning strategies, as well as instilling healthy savings habits, to give children and young adults peace of mind in an uncertain world. Learning to talk about money and sharing and discussing the deep insights and pertinent information which is available to FNB Private Wealth clients is just one way to build financial confidence.

This approach has veracity for spousal partnerships too, which is why FNB Private Wealth's spousal offering has been tailored to foster solid relationships and deliver consistent and expert wealth investment advice. Says Sathu: "We believe that successful financial and investment planning should reflect the concerns and aspirations of both partners or spouses." This is why, through FNB Private Wealth's spousal offering, your spouse or life partner can benefit from the same private banking experience that you enjoy.

Having the same team of trusted advisors on hand to guide you, your spouse and your children is hugely important when it comes to crafting specialist financial solutions for your family, says Sathu. "Our experts take the time to understand your family's wealth goals and that makes our approach unique, because we consider not only the individual, but the business and the family as well." This extends to helping to guide your children's prudent financial behaviours, being there to assist in opening their first FNBy account to offering advice on offshore investing, risk cover, study loans - in later years - their own family and fiduciary considerations.

Share and share alike: Welcome to the sharing economy

If you've ever played with a toddler, you'll know that sharing doesn't come easy to the human psyche. But it seems that humankind may finally be growing out of its infancy; that is if you note the rise of the 'sharing economy'.

The term refers to the phenomenon of collaborative consumption, which is facilitated by technology. Services which began as niche digital offerings are now making a pervasive impact on the world around us, so much so that FNB Private Wealth now regards the sharing economy as one of the major disruptions - or megatrends - to watch over the next decade and beyond.

Elaborating on what collaborative consumption means for the way we live, invest and establish businesses, Chantal Marx, Head of Research at FNB Private Wealth, explains that technology, usually Apps or websites, facilitate the sharing of underused assets of services for a fee. "The sharing economy is concerned with the better utilisation of resources. A car, for example, is an underutilised asset as it lives in a garage at home and a parking lot at the office for the majority of its life. So ask yourself: what are you paying per second for the time you drive your vehicle? Then consider how the likes of ride-sharing App, Uber, has revolutionised how we use these assets. It's about eliminating waste from the system."

In the process of creating a new form of resource sharing, this collective mentality is fundamentally changing the way established businesses operate. "One does not have to look far to see the impact of disruptive technology, even in South Africa," says Marx. "Just think of the arrival of Uber, which had rendered the meter taxi almost obsolete and resulted in the significant disruption of old, outdated business models."

While the world's leaders and well-connected gathered at Davos in Switzerland in January 2018 to discuss 'creating a shared future in a fractured world', the conversation remained predictably around growth, tackling inequality, global instability, the rise of populism and climate change. The focus on technology, which continues to evolve at a rapid pace, offered few new insights into a disruption which is expected to collectively have a US$14 trillion to US$33 trillion direct global economic impact by 2025, according to consulting firm McKinsey. But it is the likes of Uber, short-term rental giant Airbnb, Cohealo (which allows hospitals to share equipment), BlaBlaCar (for sharing long-distance road trips) and RelayRides (where people can borrow cars from their neighbours) that will change the way the world consumes. This, in turn, will ultimate affect turnovers and disrupt business strategies.

"Platforms like Airbnb have disrupted several industries," says Marx, who points out that many Airbnb rentals are running at 60% occupancy, which is on par with established hotels. This should send out a warning to investors about how and where they funnel their funds in the future. Right now you can't invest directly in the Airbnb platform or the Uber platform, but "these Apps are coming to market eventually", says Marx. "The other way, rather than waiting for the inevitable IPO, is to invest in the underlying assets, like a second property which you can put on Airbnb."

There are, of course, challenges and risks which are already evident with some of these disruptive sharing platforms, not least of which is social resistance to some of the innovations. Uber, for instance, has encountered heavy push back from meter taxies and that, says Marx, "is a big problem". So, for investors looking at these new businesses with interest there should be a healthy appreciation of the current lack of regulation and also the potential risks involved.

"As an investor you might not want to invest in these platforms right now, but what you should be doing is looking to avoid investing in industries that are likely to be disrupted," says Marx. And that raises questions around hospitality and logistics, education, media, travel, insurance, banking and even healthcare equipment. That said, forward-thinking companies in these sectors that are investing in technology and learning from the agility of App-based platforms, still have merit. Locally banks are still holding their own in the heavily-impacted financial sector and, despite the rise of ride-hailing Apps, "there is still value in car rentals", says Marx, in part thanks to South Africa's strong tourism numbers.

But, make no mistake, as the appeal of the sharing economy grows so will the list of companies unsettled by a new way of doing things. Most importantly, this type of peer-to-peer consumption is going nowhere. It holds huge appeal to the Millennial market (those born between 1982 and 1999), which is five times more likely to share than the Baby Boomer generation (mid 1940s to mid-1960s), says Marx, referencing Bank of America Merrill Lynch research. As for the Centennials (born between 2000 and 2017) this is their 'normal'.

While Millennials and Centennials make up a staggering 70% of the South African population and 49% of the world population, they are not the only drivers. "Interestingly, Boomers are the fastest-growing demographic of Airbnb hosts in the United States," says Marx. "After all, they have the assets while 75% of Millennials prefer to spend money on an experience rather than a material possession."

In South Africa, Baby Boomers are also getting in on the act, says Marx, who recently encountered her first Boomer Uber driver. "If the Boomers are already involved, then the shared economy has gone mainstream," she declares. "So mass adoption is imminent."

eBucks Travel: Your passport to a European escape

Just like there are numerous ways to earn eBucks, there are countless ways to enjoy and travel through Europe. eBucks Travel has selected a range of unique and interesting ways in which to savour the magic of Europe: from sailing and touring, to rail travel and self-drive options. Getting there should also be part of the fun, so get up to 40%* off when you book with Emirates, the airline promises to get you into a holiday mood even before you book into the SLOW Lounge.

Simply start by selecting the summer destination which gets your heart singing and eBucks Travel will take care of the rest, leaving you free to experience Europe your way.

Immerse yourself in the vibrancy of life amidst Greece's island paradises. From Naxos to Paros, spoil yourself with a hassle-free island-hopping experience with all your flights, transport and accommodation covered. From R22 492 for 9 nights per person sharing.

Fall in love with the romance and splendour of the French Riviera as you sample the playground of the world's rich and famous. This French cuisine dining experience perfectly complements this incomparable offering. From R10 904 for 4 nights per person sharing.

The picturesque, historical and enchanting Loire Valley is just a short distance from Paris and yet it transports you back to the very foundations of French culture and gastronomy. What better way to experience this huge UNESCO World Heritage Site than to meander through the valley on two wheels. From R17 719 for 7 nights per person sharing.

Exploring Croatia's cities, coastlines, national parks, medieval towns and cobalt waters is an opportunity of a lifetime. Only a sail boat experience can capture the magic of this tourism gem. From R13 695 for 7 nights per person sharing.

Journey to Tuscany and travel back in time to a period of creativity, artistic expression, fine wines and superb cuisine. Take in must-see sights like Pompeii and Capri as you fall in love with the beauty and majesty of the region. From R29 721 for 8 nights per person sharing.

Looking for the ultimate authentic Irish experience? Then a self-drive journey of this enchanting island gives you the freedom and time to explore the Irish countryside, while still keeping an eye on a handy itinerary designed to get you seamlessly from A to B. From R16 392 for 7 nights per person sharing.

These three impressive European capitals are best savoured courtesy of a romantic rail experience. Enjoy Prague's breath-taking Old Town, Vienna's musical past and Munich's mixture of artistic history and modern-day high-tech industries. From R22 261 for 6 nights per person sharing.

Why book through eBucks Travel?

eBucks Travel boasts world-class deals to destinations all over the world, compiled by a team of highly professional industry experts. Furthermore, as an eBucks Rewards client you can bank on convenient and flexible payment options, which allow you to pay with your FNB Private Wealth cards, eBucks or a combination of both.

Book with eBucks Travel and our partners become your partners:

  • Uber: Sign-up and use the promotion code EBUCKS to get R200 off your first ride or earn up to 15%* back in eBucks
  • SLOW: Enjoy and relax with complimentary* SLOW Lounge visits
  • Forex: Earn up to 50%* back in eBucks through FNB Foreign Exchange.
  • Emirates: Get up to 40%* off Emirates flights (*Discounts exclude all taxes)

*T&Cs apply.

eBucks Lifestyle: Wade Bales Wine offers

eBucks Lifestyle has teamed up with Wade Bales Fine Wine and Spirits, to bring you three exclusive wine offers for discerning FNB Private Wealth clients.


1. South Africa's First Growths

6 bottle case @ R1650
Receive 1 bottle of each of these
6 wines @ R998 (Save 40%)
Klein Constantia Cabernet
Sauvignon Shiraz 2016
Delaire Graff "De Caelo" Red
Blend 2016
Rust end Vrede Estate Syrah 2014
Rustenberg Peter Barlow 2015
Tokara Reserve Cabernet
Sauvignon 2014
De Toren Z 2014

(High profile producers with long track records of premium quality.)

2. Prestige Red Collection

6 bottle case @ R650
Receive 1 bottle of each of these
6 wines @ R398 (Save 40%)
Buitenverwachting Meifort 2012
Waterkloof Circle of Life Red
Bilton Sir Percy 2009
Mischa Estate Shiraz 2014
Le Riche Private Blend 2015
Louis Strydom Shiraz Cabernet
2016 (Ernie Els)

(Rare and Exclusive reds selected for their remarkable value for money.)

3. Premium Imported Bordeaux

6 bottle case @ R2 300
Receive 2 bottles of each of these
3 wines @ R1 380 (Save 40%)
Chateau Potensac 2011
Prelude de Frombrauge 2014
Les Allees de Cantemerle 2014

(Just landed from France, these are classic Bordeaux blends of predominantly Cabernet Sauvignon and Merlot.)

Our youth are our wealth

Celebrating Youth Month is more than just an acknowledgement of the past and the sacrifice made in the fight against apartheid in 1976. Youth Day 2018 also represents an opportunity to focus on the future, a way to celebrate the wealth of talent and potential that exists in South Africa's young people.

According to research firm GfK, South Africans under the age of 23 (the so-called Centennials) comprise 37% of the country's population, followed by the Millennials (those in their 20s and 30s) who make up 27%. Given the size of the youth market in South Africa - and not withstanding a 38.6% unemployment rate for youths aged between 15 and 34 - brands, companies and researchers are increasingly determined to know and understand these individuals and their motivations.

Experts suggest that they are demanding, impatient, socially-minded and digitally driven. They prize education, have lofty ambitions for themselves and care deeply for humanity and the planet. These individuals, particularly the Millennials who are increasingly moving into the workplace, are beginning to reshape key industries and sectors with their unique approach to life. Philanthropy, as you'll read in this newsletter, is adapting to their influence; savings and investment firms are taking notice of this group's pressures and pleasures; trends like gamification are influencing the way we all learn and earn; and our economy is also adapting to the youth's more collective mentality (just think about how Airbnb and Uber has changed the way we travel).

Current leaders and high-status individuals in society - many of whom come from the Generation X and Baby Boomer cohorts - have much to learn from the youth in this country and how they are challenging old ways. A sterling example of an innovation which holds merit across generations is nav» Money, a financial tool which puts control of your finances in your pocket. Like other FNB nav» solutions, nav» Money is changing the way our clients bank and oversee their portfolios, and their expectations of financial services.

South Africa's youth are revolutionising how we view work, balance, skills, social responsibility, wealth and flexibility. They are the future of our country, and our planet. This makes Youth Day an opportunity to understand and appreciate our future, and celebrate the dynamic generation poised to shake up our understanding of the world.

Trends: Get in the game with gamification

What is it about that Fitbit on your wrist or the pedometer app on your smartphone that inspires you to clock 10 000 steps a day? Why does real-time feedback on your driving spark better habits? The human psyche responds to these forms of 'gamification'; a fancy way to describe the confluence between the real and the virtual worlds. The question is why? As part of FNB Private Wealth's megatrends series, we get under the skin of this emerging trend.

The gamification sector is expected to grow into a US$11 billion industry by 2020, according to Research and Markets in the United States. This is being driven not only by user uptake but also by a growing realisation that incentivising people through gamification can improve not only customer relations but employee engagement. Investing is no different; something which global asset management firm BlackRock's co-founder, Rob Kapito, told a conference in London last year when he stressed that financial services institutions would have to become more like game developers to appeal to younger investors. "It's a game," he was quoted as saying by the UK's Business Insider. "All of the technology is gamification... What we need to do is find the financial game that makes people feel comfort and safety. The winners, in my opinion, are going to be the people who have that game, have the technology, and have the brand."

The reasons for this are manifold, and include the feel good factor associated with the rewards offered by gamification platforms, the fact that these offerings are designed to be fun and engaging, and that they celebrate achievements (even if it's just moving up a level in recognition). Furthermore, researchers suggest that because the human brain can get bogged down by information and the myriad options we are exposed to daily, having an app on hand to direct your behaviour helps to relieve cognitive overload.

Most of us, of course, don't associate these benefits with the word gamification, which instead conjures up images of virtual reality headsets and military-style 3D operations. "It's a word that sounds like you'll get stuck in a video game and be a digital version of yourself," admits Chantal Marx, Head of Research at FNB Securities. "But what gamification does is optimise human behaviour by making it fun to do things that you don't always enjoy."

An example of this is Discovery's Vitality innovation, says Marx, who explains: "Discovery is basically de-risking their own book while encouraging people to look after themselves." Loyalty and rewards programmes, such as FNB's eBucks Rewards and Dis-Chem Pharmacies' Loyalty Benefit Card, have a similar ethos of rewarding 'good' behaviours. In the case of eBucks, the focus is on rewarding customers for how they bank and enabling them to save money and do more when they spend their eBucks. "Dis-Chem Pharmacies is an example of how giving people points for purchases makes them want to frequent your establishment," explains Marx, and this rationale works across retail, the health sector, insurance and education.

In fact, says Marx, "studying or learning a new skill is often not a massively fun experience, but gamification is changing the face of education and how we learn".

Language app Duolingo is a great example, which uses cartoons, quizzes and short learning sessions to impart vocabulary and grammar in a fun and interactive way which rewards you as you climb from level to level, much like a video game. "They make it fun for you to learn and it's less of an effort than going to a language school where it's all about sentence construction," says Marx. "This approach can work for both easier and more complex subjects. Just look at Stanford Online or Coursera to see how much more gamified education has become and how opening up learning from home has made education far more accessible."

A less flashy example of gamification is using this approach in the workplace, harnessing this fun and interactive approach to improve employee morale and productivity. "If you can get a really good interface going, where employees can make career goals and plot their way forward and track their progress, then you have a smart tool for guiding employees through their careers while retaining talent," says Marx. This level of gamification is slowly coming to South Africa, but in Hungary professional services firm PwC makes use of a free game called Multipoly which simulates what it is like working in an accounting firm by presenting similar business problems to work through. Aimed at college students, PwC Hungary claims a 78% increase in candidates looking to work for them as a result of the game. This is precisely the sort of approach which BlackRock's Kapito finds so exciting. "Millennials want to game. It's a game society," he said at the 2017 conference.

Given the digital focus of gamification, it makes sense that this type of approach appeals to Millennials (those in their 20s and 30s) and Centennials (under the age of 23), says Marx, but it also works across generational lines. How many 60 year olds do you know with an Apple Watch? "While they are fixating about making their points, they are become a healthier version of themselves. At the same time the company's risk has been reduced."

It's hardly surprising, therefore, that companies are jumping on the bandwagon and looking to adapt their way of doing business to the 'game society'. This, explains Marx, is creating investment opportunities. BlackRock, for example, invested €30 million into Scalable Capital, an Anglo-German digital investment platform, in 2017; putting its money where Kapito's mouth is. Marx believes the savvy investor should also be paying attention to companies that are innovating in this space by launching their own programmes. She also singles out companies that are creating this gamification content, "those tech start-ups in the US as well as IT companies, the guys who are building the apps that are being deployed into businesses to help improve efficiencies through gamification".

In South Africa's tech space most of these companies are conglomerated, so you'll have some exposure even though it may be diluted, notes Marx. And that's a good thing, after all gamification is here to stay and with the youth hungry for more engagements of this nature, gamification is likely to be a meaningful for years to come.

Youth battered by stubborn, persistent unemployment

As Statistics South Africa (Stats SA) unveils another Quarterly Labour Force Survey replete with negative numbers, the country is once again forced to take stock of a stubbornly high official unemployment rate of 26.7% and a high and rising youth unemployment rate.

For youngsters aged 15-24, the data shows that 52.4% of South Africans in this age bracket are unemployed (up from 51.1% in the final quarter of 2017). Broaden that to the 15-34-year-old age group and the number sits at 32.4%, the highest in the world ahead of Greece (25.2%) and Spain (22.2%).

These statistics are deeply worrying, and the negative impact on both the economy and the psyche of the country cannot be overstated. Unless South Africa is able to rein in these numbers, any chance of meeting the National Development Plan's stated objective of reducing youth unemployment to 6% by 2030 will continue to be just an unrealistic vision.

Until policy interventions, the promised jobs summit (mentioned by President Cyril Ramaphosa during his State of the Nation Address in February 2018) and a notable improvement in South Africa's growth figures are achieved, any chance of wrestling these figures to more acceptable levels will remain a pipe dream, says Jason Muscat, Senior Economic Analyst at FNB.

"We continue to remain downbeat on the prospects for meaningful declines in the unemployment rate," says Muscat. "Despite the forecast for economic growth of approximately 2%, GDP (gross domestic product) will have to grow at more than double that rate to impact the unemployment rate."

This is not to say that some attempts to address the problem are not unfolding. In March 2018, Ramaphosa launched the Youth Employment Service (YES) which aims to bring government and business together in an effort to create a million paid work experiences for young South Africans over the next three years.

Initiatives like YES are important since the longer someone is unemployed, the deeper their discouragement, the more chance they will continue to miss out on opportunities and, eventually, the higher the likelihood that they will stop looking for work altogether. South Africa is not short on such initiatives, be they government- or private sector-driven, but to date such efforts have failed to make a significant and perceptible dent in unemployment numbers, particularly among the youth. Furthermore, in an economy dogged by slow growth and weighed down by structural inequalities and inefficiencies, the precarious position of the youth becomes even more precarious, says Muscat, as they are often the first to lose their positions and the last to be rehired.

One role which corporate South Africa can fulfil to counter this worrying trend centres on supporting the entrepreneurial focus of the country's youth. This means ensuring ongoing education around business ownership and, in the case of the financial services sector, working hard to share tips and insights around developing sound financial behaviours, both personally and for young business owners. Mentorship plays a substantial role too, and has the potential to guide young people towards business ownership in a supported fashion with a longterm and sustainable focus. Working closely with tertiary institutions to ensure that graduates enter the workplace armed with the right skills is another avenue ripe for collaboration; one which has the potential to ensure that opportunities and skills complement one another in the economy.

However, more needs to be done to get all stakeholders onto the same page. Just recently Business Day newspaper noted that unless the private sector substantially increases its fixed-investment spending in the country, the rise in business confidence fuelled by the optimism around Ramaphosa's presidency will not translate into meaningful numbers of jobs being created. This disconnect between the private sector, the government and unions is very real and its impact on prospects for job creation are tangible, says Muscat. So initiatives like YES do have an important role to play in bringing all economic players to the table.

In this respect it is important to take notice of inputs from the likes of the World Economic Forum (WEF), which touts an approach to turning around youth unemployment that hinges on five strategies:

  • Boosting job creation and labour demand
  • Better preparing youth for the job market
  • Creating pathways towards productive work
  • Improving financial well-being
  • Fostering entrepreneurship.

In order to get each of these steps into play, the need for intelligent collaboration across all players in society is a must. There is no way around this, as Sean Rush, President of JA Worldwide, a youth-focused global nonprofit organisation, wrote in a recent WEF blog: "Only through the concerted efforts of several parties - and a willingness to stick with it over the long-term - can we address the world's youth unemployment challenge and achieve lasting change."

Muscat agrees: "The reality is that the faster an economy grows, the more jobs are created. Over time, as the fourth industrial revolution gains traction and jobs are increasingly replaced by machines and software, this relationship will break down, so it is all the more reason to tackle our systemically high unemployment rate before it is too late."

Philanthropy embraces the Millennials

"Philanthropy is the thing that I am really excited about, and having success means I can do more." These are the words of, entertainer, actor and Grammy Award winning musician. This modern-day poet's view encapsulates what philanthropy is all about and, having sown the seed, 43-year-old and his more socially-minded Generation X cohort have certainly set the stage for the new Millennial grouping (those individuals currently in their 20s and 30s) to build on this culture of giving back.

While South African philanthropy body Inyathelo's 2017 Annual Survey of Philanthropy in Higher Education shows a substantial rise in the number of high-net-worth individuals in South Africa giving to worthy causes, like education, the truth is that many in this space have been giving consistently for years. Increasingly, these high-networth individuals are involving their children - and grandchildren - in their efforts.

According to Prince Siluma, Head of the FNB Philanthropy Centre, the next generation of philanthropists is clearly coming through. These individuals are savvy, digitally driven and socially minded. "For the Millennial, philanthropy is more about alignment to their values and about creating long-term relationships," says Siluma, who believes this aspect of the Millennials, and other even young generations, will reshape the sector. "Non-profit organisations need to start thinking how they communicate their stories to these individuals," he says, noting that "if you get hooked up with a Millennial then you have a partner for life".

This insight applies equally to the work being done by the FNB Philanthropy Centre, which caters to the social investment needs of affluent individuals and corporates, by assisting them to create their own philanthropic social investment foundations. The centre facilitates and guides clients through the establishment of the necessary legal structures; applies for tax exemptions and rebates; assists with identifying qualifying causes; undertakes ongoing fund and investment management in accordance with best practice governance; and monitors and reports on the impact of these social interventions.

The Philanthropy Centre also keeps a keen eye on trends in this space, and the generational shift is an interesting one. "For many of our clients who start family or private foundations, a major focus is getting their children into philanthropic causes and encouraging them to participate. With the Millennials being more socially conscious than other generations, this sets up these foundations well for a sustainable future," says Siluma.

Citing a recent example, Siluma explains: "We started a foundation for a client at the end of last year and she has roped in both her kids, one is a trustee and the other is managing the foundation as the MD. Both youngsters are working with the foundation on a full-time basis and both are in their early 30s. They love it. I follow them on Twitter and they are always promoting the foundation's work."

While a foundation such as this has no shortage of passion and dedication, often the input of experts is needed to help create the largest impact. "There are a lot of causes out there, and you can't help everyone," stresses Siluma, "so when I engage with my clients I encourage them to focus on a particular cause and then decide what they want to achieve. If you want to help previously disadvantaged children around education, that's too broad. Rather narrow it down in order to make an impact which you can monitor."

This practical approach to philanthropy is in line with a more action-driven generation that wants to see rapid improvements on the ground. "People always ask me what the difference is between philanthropy and charity," says Siluma, "and I always use the old-fashioned saying about teaching someone to fish. That's what philanthropy is all about. If you solve a systematic problem you solve a social problem. If you invest in the systematic problem and you solve it permanently, then you have a more sustainable solution."

Over the years wealthy individuals have thrown themselves into supporting good causes, either through giving or putting their skills to good use. Often these actions go unnoticed and unreported, frequently at the behest of the philanthropist. "I don't think we give enough credit for these actions," says Siluma. "Philanthropists do this because it is the right thing to do, so they tend to shy away from the media and talking about what they are doing. Look at education, a number of foundations I know are doing magnificent things when it comes to education. Do you hear about it?"

But, as the social, digital and collaborative nature of the Millennials grows in this space, there is every possibility that this more siloed, behind-the-scenes approach will give way to sharing, circulating stories and real collaboration, something the sector certainly needs, believes Siluma. "The reporting in this space is not that great and collaboration is still in its infancy," he says, explaining that many foundations and companies just don't like to collaborate and prefer instead to hold onto their projects. "We need to get to a point where collaboration is the norm because when we are focusing on complementary areas then the impact can be huge."

As former Public Protector Thuli Madonsela remarked during the recent Business in Society conference in Johannesburg: "Most Millennials are about creating the world they want to live in." And that opens the door for a philanthropic future driven by action more than by words.