A look back at the world’s first pure online bank

SIMON BROWN: I am now chatting with Christo Davel, founder of 22seven, also founder of 20Twenty, a bank [formed] in 2001. Christo, I enjoy the early hours. In 2001, when you launched 20Twenty, I was a customer. I am not saving the fee structure. I remember it was online only. I remember it was like we were living on the cutting edge of technology, in the early days of the Internet. It was heady days then. We had just had ADSL and I felt like we could do almost anything I guess.

CHRISTO DAVEL: [Chuckling] Simon, hello. We give our ages. That was 20 years ago – and you are right. We thought we could change the world.

SIMON BROWN: This is the problem we ran into because all these new banks are coming in now. I’m not criticizing the new banks, they are doing very well – Discovery Bank, TymeBank, Michael Jordaan and his colleagues at Bank Zero. They all trumpet the fact that they’re only online, they trumpet only the app. I keep on thinking, hold on you did this 20 years ago. Have we not seen progress in the banking sector in two decades?

CHRISTO DAVEL: Well I think that’s a bit of an unfair question because as we just went through the list. Twenty years ago, I remember telling people that we launched 20Twenty between September 11 and the dot-com bubble first burst. It was before social media. Facebook was launched in 2004, I think, and only got big in 2008. The iPhone was launched in 2007. We didn’t have the cloud or something like that. So online was literally new, the web was new, the internet was new.

Comparing what we could do then with what the new startup banks are capable of doing now is interesting because I think our obsession with doing what’s right for the customer is what gave us such loyal fans ago. 20 years.

SIMON BROWN: That was it. As I said, we had Internet banking in 2001. It was a bit awkward. It worked. I remember there was an Absa customer in Durbanville whose keyboard was hacked and her account was hacked – and suddenly no one wanted to. You come up and said, you know what, forget the branches – (we) aren’t going to do that. We will only be online. It was a little scary, but in a few years it worked because of course you used Saambou’s license and then two years later Saambou hit the wall and it took you out.


SIMON BROWN: But it worked as a concept. It was a functionally viable and, frankly, exciting concept that as it says on the sticker allowed us to build on it.

CHRISTO DAVEL: Yes, it was. It still brings back good memories. You mentioned the entry of Saambou into curatorship. Like I said, that was before social media. But customers have found a way to talk to each other on what I think we’ve called a “customer forum”; they held on. There were these loyalty clubs. I think there have been three or four loyalty clubs that have formed, completely without our intervention, just to make sure 20Twenty can survive.

I like to think it influenced the late John (Louw), the curator. It was a shame. He was such a guy, man. He kept us alive until we could sell 20Twenty to Standard Chartered Bank. These were the customers who gathered around the bank. It was incredible to see.

SIMON BROWN: Yes, customers love banks. I remember we had a braai when it fell, sort of a commemorative braai in a way, at KZN. I guess the focus was on customers, which was completely new. It was totally online. It was also completely new, (but) what we saw over the next two decades.

Perhaps it was unfair to say that the banks have not moved forward. I suspect a lot of what happens in the banking industry is probably down to back office processes, capacity, SnapScans, etc.

CHRISTO DAVEL: Hmm. Well I think one way to compare that is that I was fortunate enough to have the most amazing team around. I think I had just turned 40 and you were so idealistic and young. This Internet came along and we had this army of people who just believed in it. Then one of the lovely people on the team said, we’re almost riding like there’s a money fairy who has to know what I want before she wants it, who has to understand the whole story of my life and predict when I will have a problem.

It is therefore more a cultural state of mind that has guided the development of the product. The fact that we used the internet was simply because we saw it as the future. We were completely idealistic. So if you then ask if the big banks and the new incumbents have done this, that’s an interesting question, because I think that’s who will be successful among the new guys. Are they really relevant to the customer when they need something? When she needs something, then they have to be there, not because they’re the hottest brand or hottest tech.

SIMON BROWN: I understand your reasoning. It is this front end and this ability to engage and anticipate what the customer is looking for. It’s often really simple stuff. But we need it.

We’re going to leave it there. This is Christo Davel, as I said the founder of 22seven. Perhaps more exciting, the founder of 20Twenty – the world’s first pure online banking, launched in 2001. Christo, I appreciate the time. You, sir, are a legend.

Listen to Friday’s full MoneywebNOW podcast here.

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David A. Albanese

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