LookSee by Standard Bank: Inspiring and enabling households to proactively address climate change Qorus-Infosys Finacle Banking Innovation Awards 2024

Addressing climate change in South Africa, classified as a developing country, faces numerous challenges given its economic and socio-political landscape. While both the public and private sectors are actively mobilising, engaging consumers can be difficult, particularly when they are more focused on challenges like rising inflation, high interest rates, and the cost-of-living crisis.

Understanding that achieving meaningful change in this area would require more innovation than a traditional approach to financial services, the LookSee team developed a strategy that would support a household’s sustainability journey from inspiring interest through to product installation and, ultimately, efficient living. This strategy was built on three pillars: retailing sustainable solutions, offering affordable finance options, and investing in consumer education and engagement.

HEADLINE RESULTS:

• +1.2 million people reached through education endeavours (253% growth) • +10,500 solar panels installed (271% growth) • +12,000 megawatt-hours of solar energy generated (363% growth) • +12,000 tons carbon offset (363% growth) • +R39 million in annual household savings (233% growth) • R220m in finance for sustainable solutions (536% growth) • R4 billion cumulative consumer green-aligned lending book • 81% growth in green-aligned lending since beginning of 2023

SUSTAINABLE SOLUTIONS:

While offering households sustainable products and solutions is not a traditional business model for the financial services sector, LookSee identified that South African consumers are far more likely to make these investments if they know the solutions on offer are from a trustworthy source and will deliver on the promised benefits.

Accordingly, LookSee engaged with Tier 1 market players to identify product offerings that would meet the needs of our customers and provide them with an attractive return on investment. These engagements have focused on residential solar solutions as this provides the quickest means for families to move their household energy consumption away from South Africa’s utility supply, which is predominantly coal powered.

The strategic decision to build an end-to-end solar product business had several motivators, including the ability to maintain control of equipment quality, warranties and access to production and consumption data from IoT connected power inverters. It also enabled the business to build a strong margin to strengthen the overall business case of selling home solar solutions either with or without a lending product linked to the sale. This margin can, in turn, be leveraged to provide incentives to customers such as additional free solar panels and support and maintenance contracts.

Today LookSee offers homes hybrid solar installations ranging from small, 5kW solar systems to extra-large, 3-phase 12kW solar systems. These offerings are supported by Energy Advisors that visit the customer’s home to conduct a structural inspection, understand the household’s specific needs and provide tailored recommendations.

Attention has also been given to the energy-intensive process of water heating as studies show that the average South African family spends between 40% and 60% of its energy bill powering their geyser. The prevalent water heating solution in South Africa homes, a geyser uses an electric element to heat up to 200 litres of water in a tank and maintain it at a set temperature. The energy consumption required for this continual heating of the water has been identified by South Africa’s government as a critical drain on the country’s power grid.

With this in mind, Standard Bank, through LookSee, was the first bank to offer conversions of grid-tied electric geysers to off-grid solar power. This low-cost solution involves the installation of solar PV panels and a controller which supplies power to the existing geyser. This innovative approach not only ensures best use is made of existing water heating and plumbing infrastructure and minimal installation costs, but also ensures that savings on the monthly energy bill exceed the finance costs for most households.

LookSee also offers other targeted water heating interventions including energy-efficient heat pump solutions specifically designed for the South African market, and subscriptions to smart geyser IoT devices for families that want to control and reduce their geyser’s energy consumption.

A key factor in the success of LookSee’s sustainable offerings has come from delivering the peace of mind that comes with knowing these solutions are backed by Standard Bank. Indeed, our stringent quality and service requirements mean we choose tier-1 equipment that has been tried and tested; work with qualified, experienced and fully vetted installation partners; and ensure extensive product and workmanship warranties are upheld.

This is backed up by Quality Assurance team that inspects installations to ensure the highest standards and a dedicated Customer Care Team which provides support to customers to make sure all questions are answered, installations arranged, applications processed, and documentation timeously delivered.

This confidence-boosting approach has been embraced by South African households leading to the installation of over 10,500 solar panels which have generated 12,000 megawatt-hours of renewable energy and offset almost 12,000 tons in carbon emissions. Just as importantly, these interventions are delivering an estimated R39 million in annual savings for households.

FLEXIBLE AND AFFORDABLE FINANCING:

Access to affordable finance options will always play a significant role in enabling consumers to make sustainable choices. Accordingly, Standard Bank has put effort into developing a range of flexible lending offerings to assist households.

This commitment meant it was the first South African bank to launch a residential offering based on government’s Energy Bounce Back Loan Guarantee Scheme. The resulting LookSee Solar Loan is a gamechanger for families that can’t, or don’t want to, finance a solar installation on their home loan. Featuring personalized interest rates that start at prime +1% and are capped at prime +2.5%, and flexible repayment terms up to 5 years with no penalties for early settlement, the Solar Loan can be used to finance any sustainable intervention that includes the installation of at least 1 solar panel.

The Solar Loan has reduced the total cost of credit by 30%, when compared to purchasing a solar solution on a traditional term loan. The product’s 58% approval rate is well above the industry average of 32% for unsecured lending and is a strong indicator that we are helping the majority of clients who request financing.

Home loan-based lending has also been enhanced to assist customers including the introduction of an automatic assessment for an additional 20% ‘Future Use’ registration amount on new home loans enabling homeowners to invest in acceptable home improvements such as solar power installations. Additionally, the bank remains sensitive to the sustainability needs of existing home loan customers, offering re-advance and further loans for those that qualify.

This focus on enabling households to make sustainable investments saw the cumulative value of the bank’s consumer green aligned lending book approaching R4 billion, representing a growth of over 81% since the beginning of 2023.

CONSUMER EDUCATION AND ENGAGEMENT:

A key challenge in the fight against climate change has always been motivating consumers to adopt new behaviours and invest in sustainable choices. This is particularly true in South Africa, where economic strain is putting household budgets under significant pressure.

Understanding that consumer education would play an essential role in bringing about change, LookSee developed an ecosystem that focuses on providing easy-to-understand insights and practical tips that help households see the benefits that these choices can bring – not just for the environment at large, but for their family’s financial resilience and generations to come.

Starting with a Knowledge Hub channel on its website, LookSee empowers households with free access to expert advice on reducing energy consumption within the home, as well as insights into sustainable investments and how these can save money.

To extend the message further, LookSee entered into strategic media partnerships with a singular focus on providing authentic educational and advisory articles and interviews. Through this, LookSee empowers journalists to address current household energy concerns and highlight interventions that could have a meaningful impact.

This innovative approach to engaging with the media has seen significant success, with online publishers reporting that the content relevance has resulted in readership figures which are significantly higher than average. This includes several articles competing with the news of the day to making the week’s ‘most read’ list. To date, these articles have attracted almost 950,000 readers, while radio interviews have attracted audiences in excess of 280,000 people.

While LookSee’s offerings are open to all households, regardless of who they bank with, the needs of existing banking clients feature high on its priorities, requiring a concerted effort being undertaken to engage with these customers through the bank’s traditional channels.

This includes the development of a LookSee add-on which was rolled out on the bank’s mobile banking app. The feature delivers daily energy-efficiency and solar power tips for the home; enables customers to assess the generation potential of their roof through the bespoke Solar Score system; and makes getting a solar quote, personalized to their family’s needs and budget, quick and easy.

At a branch level, LookSee’s sustainability messages feature on in-branch videos and effort has gone into training Solar Champions to speak with confidence and expertise to customers in person.

A tailored approach has also been taken to direct customer messaging which considers affordability, personalized interest rates, the customer’s current portfolio and any existing solar installations. Similarly, personal and private bankers have been empowered to have informed customer conversations about solar power and the finance solutions best suited to their needs. This has ensured that our customer engagements present the best and most relevant offer possible for each client.

A key factor in the success of this educational ecosystem has been the development of ‘investment cases’ to support the messaging. This aligns with our belief that consumers are more likely to act in a positive manner if they’re easily able to identify how that action will benefit their family. Accordingly, we developed in-house calculations for each promoted behaviour change and investment option which we used to demonstrate both immediate and long-term savings taking into account projected increases in the cost of energy as well as inflation.