By Tony Seifart
02.27.12
Much has been said about the recent online spat between Standard Bank and First National Bank (FNB). If it really can be called a spat, since FNB hardly reacted to the attack. Both the official FNB account @rbjacobs and the FNB CEO @michaeljordaan chose to “remain above it all”.
In truth, the actions of Standard Bank seemed to mobilise an army of avid FNB fans who condemned the actions of the bank. The allegations were rebuked with seeming religious fervour and harking back to the old days of IRC, I stood amazed at the virtual flaming of @StandardBankGrp.
If you missed it all, here’s a quick recap:
Late afternoon Thursday, Standard Bank announced via its Twitter feed that it had instructed its lawyers to approach the Advertising Standards Authority (ASA) to lay a complaint against FNB for false advertising. It then followed up with specifics regarding a print ad that appeared in the Sunday Times about FNB claiming to have a few “firsts”, such as free internet banking and free accounts for low-cost earners.
It said (and this seemed hard to swallow for many people on Twitter) that it was doing this because it had the public’s “best interests” at heart. Come now, who really believes that?
So what should Standard Bank have done?
Even though Standard Bank has more Twitter followers than @rbjacobs, a fact it bandied around as proof of its superior social media strategy, FNB is far more engaging with its clients. Simply read through both tweet-streams and you’ll see the difference in interaction. Standard Bank remains professional, it’s almost aloof, while FNB makes the point of building a relationship with the people it interacts with — the very essence of a social media strategy.
FNB has Standard Bank waxed on many levels
The ease-of-use of its online banking app is beyond world-class. I’ve played with the apps of a few UK and US banks and find the FNB app far superior. Standard Bank doesn’t even have an app.
FNB has an easy to understand pricing-structure for accounts — a fixed fee per month for almost everything you need — even my maths-based engineering brain can’t figure out Standard Bank’s fee structure.
FNB offers its Gold and Platinum clients discounted tablets and smartphones with 0% interest loans to encourage transactions without needing to go into a branch. Standard Bank has no such offer.
FNB give you access to your own branch or you work directly with a Relationship Manager. Standard Bank insists you work through a call centre — every time you call, you have to talk to a different person, and explain everything all over again.
With FNB you can do everything over the phone, email, or Twitter. With Standard Bank you have to go into the branch for something as simple as changing a PIN.
My point is that it’s really quick to draw up a list areas Standard Bank can improve in — especially when working with a group of techno-savvy upwardly mobile customers — who are based on Twitter. It’s exactly what it should have done.
The irony is that the true issue from Standard Bank’s point of view, the false advertising, was completely lost as more and more people pointed out the bank’s short-comings.
Standard Bank went about this completely the wrong way — if you’re going to take on your competitors in a field they are completely dominating — then make sure that the product or service you provide exceeds theirs. And if it doesn’t, rather keep quiet and work on it.
Making a statement the way it did made Standard Bank look petty. Whether its claims are true or not is for the ASA to decide, but what is rather obvious is that, no matter what the result, Standard Bank comes out looking like sore losers.
I have spoken to a few FNB clients since the incident. They all told me they felt compelled to personally defend the bank. Every FNB Client who is active on Twitter has had some interaction with @rbjacobs who feels more like a person than a corporate Twitter account. It seemed as if the big corporate bully was picking on a friend who had helped people out of difficult situations — and friends protect friends.
So what’s the lesson for us all here?
Interacting on social media is unpredictable. I don’t think anyone at Standard Bank expected the highly zealous reaction from FNB clients. It tried to look like our “Banking Saviour” and, to put it bluntly, ended up looking a bit like the village idiot.
It’s also worthwhile considering whether or not Twitter is the right medium for such an announcement. It’s not easy to get a succinct message across without losing the plot in 140 characters. If you’re going to make announcements on Twitter, surely it would be better to provide a full press-release on your website or blog post and use Twitter to link directly to that.
The tweet is simply too short a message form to handle any really complex argument. The message can easily get lost and confused in the tweet stream, something which was made abundantly clear last week.
If your competitor online is doing something better than you — rather look to yourself. How can you improve your product or service? How can you turn clients into brand evangelists? It’s a strategy that has worked incredibly well for FNB — and it’ll work well for your business too.
http://memeburn.com
Tuesday 28 February 2012
Monday 27 February 2012
FNB lets you send money to Facebook friends with cellphone banking
First National Bank (FNB) has launched a service that allows cellphone banking customers to send money to their Facebook friends.
According to the FNB vouchers page on the bank’s website, standard charges apply for the transaction and the procedure for sending a voucher is as follows:
Login to Cellphone Banking
Select Prepaid
Select Buy FNB Voucher
Enter your One-Time PIN (OTP)
Select the purchasing account (incl. credit cards), enter your voucher amount and select an FNB Voucher PIN
Confirm the transaction
You’ll receive an SMS confirming your purchase and FNB Voucher Number
Login to Facebook, locate the FNB Vouchers application and send the voucher to your friend.
FNB added that vouchers can only be sent to Facebook users with South African mobile phone numbers. If you don’t send a voucher within 7 days, you will be refunded for the voucher purchase, excluding the service fee.
The recipient of the voucher can use it to redeem Prepaid Airtime or Convert it to cash using FNB eWallet.
FNB’s Facebook-oriented service joins that of another South African run startup, ZunguZ.
ZunguZ lets users of its Facebook application send money to any other Facebook user, which can be withdrawn at any South African bank. For now, international users are limited to using their Visa or MasterCard credit card.
http://mybroadband.co.za
According to the FNB vouchers page on the bank’s website, standard charges apply for the transaction and the procedure for sending a voucher is as follows:
Login to Cellphone Banking
Select Prepaid
Select Buy FNB Voucher
Enter your One-Time PIN (OTP)
Select the purchasing account (incl. credit cards), enter your voucher amount and select an FNB Voucher PIN
Confirm the transaction
You’ll receive an SMS confirming your purchase and FNB Voucher Number
Login to Facebook, locate the FNB Vouchers application and send the voucher to your friend.
FNB added that vouchers can only be sent to Facebook users with South African mobile phone numbers. If you don’t send a voucher within 7 days, you will be refunded for the voucher purchase, excluding the service fee.
The recipient of the voucher can use it to redeem Prepaid Airtime or Convert it to cash using FNB eWallet.
FNB’s Facebook-oriented service joins that of another South African run startup, ZunguZ.
ZunguZ lets users of its Facebook application send money to any other Facebook user, which can be withdrawn at any South African bank. For now, international users are limited to using their Visa or MasterCard credit card.
http://mybroadband.co.za
Friday 24 February 2012
Bank fees: baffle me with waffle
Pravin Gordhan says banks charge too much. So I asked my bank why an e-mail confirming a payment costs 65 cents.
By Ivo Vegter, Contributor
24 Feb 2012
I like my bank, by comparison with the rest of the big-four cartel. I like my bank like a mugger who doesn't stab me. By all accounts, it is easily the least expensive among the big four, and it gets a lot right about customer service. Seriously, you should all move to my bank (although I've heard good things about a smaller bank with a limited set of services but great value).
I asked my bank – let's call it Bank A – why it charges 65 cents to send a confirmation e-mail to the recipient of a payment.
After all, sending an e-mail costs... hey, anyone know this stuff? I mean, I know what I pay for bread per loaf, and bandwidth per gig. But what do you actually pay per e-mail? An entirely automated, outgoing e-mail, possibly encrypted, which requires no human intervention and is a feature of your business software?
E-mail is a truly trivial application in the 21st century, so I dug up a 10-year-old white paper. It said for an in-house solution sending 10 000 e-mails a week, you'd pay about 10 South African cents per e-mail. By 100 000 e-mails a week, it'd cost one cent, and for higher volumes, even less. Let's assume, generously, that it didn't get any cheaper in the last 10 years.
The price of 65 cents (a profit margin of 6 400%) looks extraordinarily high by this standard. Bank B charges 48 cents. Bank C charges 65 cents too. Bank D couldn't find space in its 58-page fees brochure for this information.
So I asked why. The customer service agents, who happily hang out on Twitter so I can yank their chains in near real-time, said: “This is a service charge associated with the technical administration of secure data.”
Ah, right. The technical administration... what?!
This is 2012. Banks don't employ typing pools anymore. The “technical administration of secure data” today involves no work at all. After a once-off installation of secure mail server software, connected to an Internet pipe on one end and a banking server on the other, it costs nothing measured in units bigger than bytes or microseconds.
In short, it's waffle. There is no such thing as the “technical administration of secure data”.
When I asked how many people the bank employs at their very own Bletchley Park for this evidently quite expensive service, they dodged the question again: “Every e-mail you send needs to be secure, as it contains personal data. Hence we need to have systems that maintain your privacy.”
So, none then.
In a subsequent e-mail, a spokesperson for the bank said the price was intended “to address infrastructure and other costs”.
More lies, then. After all, neither my e-mailed statements nor the paper ones the mailman sticks in the gate next to your mailbox for any passing identity thief to find, attract this “technical administration” fee. Yet they are far more complex, both in the database query that produces it and the infrastructure costs that support it.
The average customer, with average access to the average call centre, is meant to get baffled by this very average waffle.
The CEO of the bank in question was more honest. “Convenience fee. Just copy and paste screen in mail to save 65c,” he told me. At least he's honest: banks do it because they can, and because while it costs them nothing, it's a pain in my neck not to ask them to do it.
However, a similar argument goes for other fees, which aren't so easily dodged.
Internal transfers, which can't cost the bank more than a fraction of a cent in computing time, get billed to the customer at R3.30 a pop. Inter-bank transfers – despite being a simple data message – cost far more. On top of that, the banks between them sit on the electronic data representing your money for 48 hours, stealing your interest.
The pricing guide that lists all these fees runs to 148 lines in a spreadsheet, and that's just for one type of account. There are dozens of these little bitty fees for essentially cost-free actions. Some of them can be avoided, and some can be bundled into flat-fee type accounts, but many can't. When multiplied by the number of transactions and number of customers a bank has, they add up to loads of lovely lolly.
Even bottom-of-the-range “Mzansi” accounts siphon off fees this way, which explains why low or irregular income earners aren't too keen on formal banking. It doesn't earn or save them any money, and the costs are just too high relative to their income.
Pravin Gordhan, in his budget speech on Wednesday, 22 February, said: “Fees for many products in the financial sector remain too high. High costs in savings products undermine the national objective of getting our people to save more.”
Indeed. Saving once earned customers money. Now, they pay to deposit money, pay to keep money in the bank, pay when they withdraw it, and pay hefty penalties for the most trivial “offences”. To add insult to injury, the interest they get is hardly enough to cover the price of an e-mail.
In the heavily regulated world of banking, the barriers to entry for new competition are very high. Cartel incumbents have no incentive to shoot themselves in the foot by aggressively going after each other on price. It is much less expensive to compete on brand marketing and customer service. There's no need to throw in cost-free services as extras just to make an account more attractive, because they're too small to quibble about individually.
So banks get away with the drip, drip, drip of surreptitious gouging, and when a customer does make a complaint, they baffle them with plausible-sounding nonsense. And, as my bank demonstrated, even the best of them do so.
Back when I was a young tech reporter, the exact same bank explained the great benefit of information technology: it allows banks to change their business model, from making money the old-fashioned way, on the difference between loan interest and deposit interest, to making money by charging for every single transaction you make.
“Brilliant,” I thought. “That way you can charge both savers and borrowers, and they'll never even notice how they're being swindled.”
No wonder nobody saves anymore.
http://www.itweb.co.za
By Ivo Vegter, Contributor
24 Feb 2012
I like my bank, by comparison with the rest of the big-four cartel. I like my bank like a mugger who doesn't stab me. By all accounts, it is easily the least expensive among the big four, and it gets a lot right about customer service. Seriously, you should all move to my bank (although I've heard good things about a smaller bank with a limited set of services but great value).
I asked my bank – let's call it Bank A – why it charges 65 cents to send a confirmation e-mail to the recipient of a payment.
After all, sending an e-mail costs... hey, anyone know this stuff? I mean, I know what I pay for bread per loaf, and bandwidth per gig. But what do you actually pay per e-mail? An entirely automated, outgoing e-mail, possibly encrypted, which requires no human intervention and is a feature of your business software?
E-mail is a truly trivial application in the 21st century, so I dug up a 10-year-old white paper. It said for an in-house solution sending 10 000 e-mails a week, you'd pay about 10 South African cents per e-mail. By 100 000 e-mails a week, it'd cost one cent, and for higher volumes, even less. Let's assume, generously, that it didn't get any cheaper in the last 10 years.
The price of 65 cents (a profit margin of 6 400%) looks extraordinarily high by this standard. Bank B charges 48 cents. Bank C charges 65 cents too. Bank D couldn't find space in its 58-page fees brochure for this information.
So I asked why. The customer service agents, who happily hang out on Twitter so I can yank their chains in near real-time, said: “This is a service charge associated with the technical administration of secure data.”
Ah, right. The technical administration... what?!
This is 2012. Banks don't employ typing pools anymore. The “technical administration of secure data” today involves no work at all. After a once-off installation of secure mail server software, connected to an Internet pipe on one end and a banking server on the other, it costs nothing measured in units bigger than bytes or microseconds.
In short, it's waffle. There is no such thing as the “technical administration of secure data”.
When I asked how many people the bank employs at their very own Bletchley Park for this evidently quite expensive service, they dodged the question again: “Every e-mail you send needs to be secure, as it contains personal data. Hence we need to have systems that maintain your privacy.”
So, none then.
In a subsequent e-mail, a spokesperson for the bank said the price was intended “to address infrastructure and other costs”.
More lies, then. After all, neither my e-mailed statements nor the paper ones the mailman sticks in the gate next to your mailbox for any passing identity thief to find, attract this “technical administration” fee. Yet they are far more complex, both in the database query that produces it and the infrastructure costs that support it.
The average customer, with average access to the average call centre, is meant to get baffled by this very average waffle.
The CEO of the bank in question was more honest. “Convenience fee. Just copy and paste screen in mail to save 65c,” he told me. At least he's honest: banks do it because they can, and because while it costs them nothing, it's a pain in my neck not to ask them to do it.
However, a similar argument goes for other fees, which aren't so easily dodged.
Internal transfers, which can't cost the bank more than a fraction of a cent in computing time, get billed to the customer at R3.30 a pop. Inter-bank transfers – despite being a simple data message – cost far more. On top of that, the banks between them sit on the electronic data representing your money for 48 hours, stealing your interest.
The pricing guide that lists all these fees runs to 148 lines in a spreadsheet, and that's just for one type of account. There are dozens of these little bitty fees for essentially cost-free actions. Some of them can be avoided, and some can be bundled into flat-fee type accounts, but many can't. When multiplied by the number of transactions and number of customers a bank has, they add up to loads of lovely lolly.
Even bottom-of-the-range “Mzansi” accounts siphon off fees this way, which explains why low or irregular income earners aren't too keen on formal banking. It doesn't earn or save them any money, and the costs are just too high relative to their income.
Pravin Gordhan, in his budget speech on Wednesday, 22 February, said: “Fees for many products in the financial sector remain too high. High costs in savings products undermine the national objective of getting our people to save more.”
Indeed. Saving once earned customers money. Now, they pay to deposit money, pay to keep money in the bank, pay when they withdraw it, and pay hefty penalties for the most trivial “offences”. To add insult to injury, the interest they get is hardly enough to cover the price of an e-mail.
In the heavily regulated world of banking, the barriers to entry for new competition are very high. Cartel incumbents have no incentive to shoot themselves in the foot by aggressively going after each other on price. It is much less expensive to compete on brand marketing and customer service. There's no need to throw in cost-free services as extras just to make an account more attractive, because they're too small to quibble about individually.
So banks get away with the drip, drip, drip of surreptitious gouging, and when a customer does make a complaint, they baffle them with plausible-sounding nonsense. And, as my bank demonstrated, even the best of them do so.
Back when I was a young tech reporter, the exact same bank explained the great benefit of information technology: it allows banks to change their business model, from making money the old-fashioned way, on the difference between loan interest and deposit interest, to making money by charging for every single transaction you make.
“Brilliant,” I thought. “That way you can charge both savers and borrowers, and they'll never even notice how they're being swindled.”
No wonder nobody saves anymore.
http://www.itweb.co.za
Time to smash SA’s bank charges racket?
Chinese government gets tough on bank charges. SA should do same.
Author: Jackie Cameron |23 February 2012 12:37
BEIJING - South Africans are right up there with Chinese consumers in paying exorbitant, hazy bank charges. The difference is that the Chinese government has heard the voices of discontent and is set to implement rules aimed at preventing banks from charging excessive fees.
China wants to make bank charges more transparent and less complicated. Chinese consumers are fed up of trying to figure out how their bank charges are levied – and the huge profits banks are making on their backs has been a growing source of irritation.
If only the South African authorities would consider doing the same. Finance Minister Pravin Gordhan grumbled about high bank charges when he unveiled the National Budget this week, and threatened further steps, but what we need is some firm, fast, Chinese-style government action.
South Africa’s shockingly high bank charges have long been a bone of contention. It is clear banks can’t, or won’t, jack up their act on their own.
In spite of the occasional shock report or exposé that reminds customers how hard they have it in South Africa, banks continue raking in easy money through retail bank charges. This has been brought home to me living outside South Africa and watching bank charges being continually deducted while there is next-to-nothing going on in my accounts back home.
In one case, an ordinary Big Four personal cheque account – a requirement for taking out a mortgage with that bank some years ago – costs more than R150/month. And that’s before there’s any movement in my account, like a request for an annual interest statement that hasn’t arrived in the post or telephone payments.
Add up all those monthly instalments for a year and I’ve got enough to pay for an out-of-season budget flight on the high traffic Beijing-London route. This is more than most people earn in a month in South Africa.
Tally the basic charges on two accounts and I could soon have enough for a return air fare from Beijing to Johannesburg. That really seems like money-for-jam for the Big Banks involved, which there’s no point naming because they’re all the same.
Looking at it another way, my life assurance which is deducted from that same bank account costs roughly the same each month as my basic bank charges. The financial planner who sold me the insurance cover is counted among that group of intermediaries regularly chastised for doing a job once and getting paid a steady income stream indefinitely.
Yet, my bank is doing exactly the same, and arguably worse. I get nothing back from the bank, really, other than a place to facilitate five monthly electronic payments. There’s no interest being earned on my credit balance, so the bank gets my cash for free.
At least there’s a potential financial benefit at the end of the R150/month life cover - which, incidentally will include various fees, like commissions, that are deducted behind-the-scenes.
Banks usually like to tell us that their bank charges are going up less than the rate of inflation, so are in effect declining in real terms. We’re supposed to be grateful that we’re being squeezed a little less than the banks have in their power to do.
It is hard to shop around because the fee structures vary, and are being continually re-arranged. And, even if you do, you can’t really expect a significantly different picture out of your current bank’s nearest competitor.
It is a similar picture for Chinese consumers. But, this is a year in which a change of national political leadership and growing social unrest globally and nationally are giving the ruling Communist Party of China clique the heebie-jeebies. Growing consumer unhappiness about hefty bank charges is an obvious problem to nip in the bud.
The Chinese government has drafted regulations to compel banks to follow government-directed prices in some cases and in others to be more transparent in setting out market-related prices. It’s not dilly-dallying about the matter either: earlier this month it asked for public comments on the regulations by 20 March.
Last year three banks - Industrial Bank, CITIC Bank and Postal Saving Bank of China – were given large fines for levying excessive charges. One money-spinner entailed charging every time individuals re-set their secret passwords. That apparently netted not far off ¥6m (about R6m) for the banks involved (shhh: don’t tell our Big Four.)
Bank fees contribute about 20% in revenues for China’s banks. These banks already take a juicy income on the back of a guaranteed gap between lending and deposit rates.
China has some of the biggest, most profitable banks in the world. This includes ICBC – which owns a sizeable chunk of South African blue chip Standard Bank, which is listed on Johannesburg’s stock exchange (JSE: SBK).
ICBC was the world’s most profitable bank in 2011, according to China Daily newspaper. It is rated in the top 10 most valuable banking brands in the world, with Brand Finance also including other Chinese banks in the world’s top 20 (ICBC: 8; China Construction Bank: 10; Bank of China: 17).
South Africa’s banks don’t look too shabby, though. Moody’s, a ratings agency, gave the South African banking sector the thumbs up in a report in late 2011. And, Standard Bank and Absa (JSE: ASA) are rated among the top 100 most valuable banking brands internationally; Nedbank (JSE: NED ), Investec (JSE: INL) and FNB (part of JSE-listed FirstRand )are in the world’s top 200.
There is a well-worn saying in some circles that you are likely to enjoy a better return if you buy a life company’s shares than give it your money to invest on your behalf. The same credo could be applied to South Africa’s major banks as well as China’s big banking organisations: it probably makes more financial sense to buy their shares than be one of their customers.
http://www.moneyweb.co.za/
Author: Jackie Cameron |23 February 2012 12:37
BEIJING - South Africans are right up there with Chinese consumers in paying exorbitant, hazy bank charges. The difference is that the Chinese government has heard the voices of discontent and is set to implement rules aimed at preventing banks from charging excessive fees.
China wants to make bank charges more transparent and less complicated. Chinese consumers are fed up of trying to figure out how their bank charges are levied – and the huge profits banks are making on their backs has been a growing source of irritation.
If only the South African authorities would consider doing the same. Finance Minister Pravin Gordhan grumbled about high bank charges when he unveiled the National Budget this week, and threatened further steps, but what we need is some firm, fast, Chinese-style government action.
South Africa’s shockingly high bank charges have long been a bone of contention. It is clear banks can’t, or won’t, jack up their act on their own.
In spite of the occasional shock report or exposé that reminds customers how hard they have it in South Africa, banks continue raking in easy money through retail bank charges. This has been brought home to me living outside South Africa and watching bank charges being continually deducted while there is next-to-nothing going on in my accounts back home.
In one case, an ordinary Big Four personal cheque account – a requirement for taking out a mortgage with that bank some years ago – costs more than R150/month. And that’s before there’s any movement in my account, like a request for an annual interest statement that hasn’t arrived in the post or telephone payments.
Add up all those monthly instalments for a year and I’ve got enough to pay for an out-of-season budget flight on the high traffic Beijing-London route. This is more than most people earn in a month in South Africa.
Tally the basic charges on two accounts and I could soon have enough for a return air fare from Beijing to Johannesburg. That really seems like money-for-jam for the Big Banks involved, which there’s no point naming because they’re all the same.
Looking at it another way, my life assurance which is deducted from that same bank account costs roughly the same each month as my basic bank charges. The financial planner who sold me the insurance cover is counted among that group of intermediaries regularly chastised for doing a job once and getting paid a steady income stream indefinitely.
Yet, my bank is doing exactly the same, and arguably worse. I get nothing back from the bank, really, other than a place to facilitate five monthly electronic payments. There’s no interest being earned on my credit balance, so the bank gets my cash for free.
At least there’s a potential financial benefit at the end of the R150/month life cover - which, incidentally will include various fees, like commissions, that are deducted behind-the-scenes.
Banks usually like to tell us that their bank charges are going up less than the rate of inflation, so are in effect declining in real terms. We’re supposed to be grateful that we’re being squeezed a little less than the banks have in their power to do.
It is hard to shop around because the fee structures vary, and are being continually re-arranged. And, even if you do, you can’t really expect a significantly different picture out of your current bank’s nearest competitor.
It is a similar picture for Chinese consumers. But, this is a year in which a change of national political leadership and growing social unrest globally and nationally are giving the ruling Communist Party of China clique the heebie-jeebies. Growing consumer unhappiness about hefty bank charges is an obvious problem to nip in the bud.
The Chinese government has drafted regulations to compel banks to follow government-directed prices in some cases and in others to be more transparent in setting out market-related prices. It’s not dilly-dallying about the matter either: earlier this month it asked for public comments on the regulations by 20 March.
Last year three banks - Industrial Bank, CITIC Bank and Postal Saving Bank of China – were given large fines for levying excessive charges. One money-spinner entailed charging every time individuals re-set their secret passwords. That apparently netted not far off ¥6m (about R6m) for the banks involved (shhh: don’t tell our Big Four.)
Bank fees contribute about 20% in revenues for China’s banks. These banks already take a juicy income on the back of a guaranteed gap between lending and deposit rates.
China has some of the biggest, most profitable banks in the world. This includes ICBC – which owns a sizeable chunk of South African blue chip Standard Bank, which is listed on Johannesburg’s stock exchange (JSE: SBK).
ICBC was the world’s most profitable bank in 2011, according to China Daily newspaper. It is rated in the top 10 most valuable banking brands in the world, with Brand Finance also including other Chinese banks in the world’s top 20 (ICBC: 8; China Construction Bank: 10; Bank of China: 17).
South Africa’s banks don’t look too shabby, though. Moody’s, a ratings agency, gave the South African banking sector the thumbs up in a report in late 2011. And, Standard Bank and Absa (JSE: ASA) are rated among the top 100 most valuable banking brands internationally; Nedbank (JSE: NED ), Investec (JSE: INL) and FNB (part of JSE-listed FirstRand )are in the world’s top 200.
There is a well-worn saying in some circles that you are likely to enjoy a better return if you buy a life company’s shares than give it your money to invest on your behalf. The same credo could be applied to South Africa’s major banks as well as China’s big banking organisations: it probably makes more financial sense to buy their shares than be one of their customers.
http://www.moneyweb.co.za/
Tuesday 21 February 2012
In South Africa, banking convenience meets controversy
By Dave Mayers | February 20, 2012, 9:58 AM PST
JOHANNESBURG–The launch of a new online system meant to track South African users’ spending habits has erupted in controversy here, calling into question the close-knit structure of South African banking and the power these banks wield over local startups.
Three weeks ago Christo Davel launched 22seven, an aggregated web-based financial management application meant to give users insight into their spending habits. While not a new idea — similar tools like Mint have been available for years in the U.S. — the continuously updated 22seven is the first of its kind in South Africa.
Allistar Fairweather at the Mail & Guardian describes how the app works
"It collects data on your financial habits, slices and dices it, and reveals the hidden costs of those impulse buys and late-night ATM visits. Then, by prodding you gently, it shows you how to save and spend more wisely."
On its face, what 22seven is offering is pretty straightforward — more information on a user’s spending patterns. However, to get that information the company first needs banking log in details. Michael Jordaan, CEO of First National Bank, one of the “big four” of South African banks, summed up the feelings of the country’s banking sector on twitter:
In the immediate aftermath of 22seven’s launch, all the members of the big four cautioned against giving out account details, some going as far as trying to block the service and saying they were no longer responsible for any fraud on users’ accounts if they disclosed banking details to 22seven, even if the fraud was unrelated to the Davel’s application. People were understandably wary of giving their banking information to the site.
For its part, 22seven has assured the safety of its users’ information. The site uses a U.S.-based company, Yodlee, to collect and store account information. It’s all done automatically, and at no point does anyone from Yodlee or 22seven have access to any account details. Yodlee boasts a long track record of keeping its users’ information safe.
Some within South Africa were disappointed in what they saw as an overreaction on the part of the country’s banks. Simon Dingle at the local technology site Tech Crunch said:
What does surprise me is how SA banks, instead of partnering with Yodlee like their leading international counterparts have done, are advising customers not to use the system. It’s just another example of how backward our banks are in their thinking about personal finances, even if they are improving on the service front.
Some argue that this whole dust up could have been avoided if 22seven had approached the local banks beforehand and arranged for a free application programming interface, or API, to be made available to third party sites. Even an official at local bank Absa, Christo Vrey, has singled a willingness to make an API available, although he remains ambiguous about a time frame for doing this. Absa is reportedly also working on its own financial management application that it wants to roll out to its customers soon.
Last week Jordaan’s FNB became the first bank to break from the big four, indicating its desire to work with 22seven in an email sent to its customers. The bank decided to allow users to create a limited profile in order for the company to gain to access their accounts.
22seven will be free while it’s in beta testing. The full version will cost users roughly $10 a month. While the site is being heralded by some as a “world-class” product, the current version runs on oft-maligned Flash, making its design outdated at launch. The company has said that it plans to develop apps for mobile devices like iPhones and iPads that aren’t Flash-friendly.
http://www.smartplanet.com
JOHANNESBURG–The launch of a new online system meant to track South African users’ spending habits has erupted in controversy here, calling into question the close-knit structure of South African banking and the power these banks wield over local startups.
Three weeks ago Christo Davel launched 22seven, an aggregated web-based financial management application meant to give users insight into their spending habits. While not a new idea — similar tools like Mint have been available for years in the U.S. — the continuously updated 22seven is the first of its kind in South Africa.
Allistar Fairweather at the Mail & Guardian describes how the app works
"It collects data on your financial habits, slices and dices it, and reveals the hidden costs of those impulse buys and late-night ATM visits. Then, by prodding you gently, it shows you how to save and spend more wisely."
On its face, what 22seven is offering is pretty straightforward — more information on a user’s spending patterns. However, to get that information the company first needs banking log in details. Michael Jordaan, CEO of First National Bank, one of the “big four” of South African banks, summed up the feelings of the country’s banking sector on twitter:
In the immediate aftermath of 22seven’s launch, all the members of the big four cautioned against giving out account details, some going as far as trying to block the service and saying they were no longer responsible for any fraud on users’ accounts if they disclosed banking details to 22seven, even if the fraud was unrelated to the Davel’s application. People were understandably wary of giving their banking information to the site.
For its part, 22seven has assured the safety of its users’ information. The site uses a U.S.-based company, Yodlee, to collect and store account information. It’s all done automatically, and at no point does anyone from Yodlee or 22seven have access to any account details. Yodlee boasts a long track record of keeping its users’ information safe.
Some within South Africa were disappointed in what they saw as an overreaction on the part of the country’s banks. Simon Dingle at the local technology site Tech Crunch said:
What does surprise me is how SA banks, instead of partnering with Yodlee like their leading international counterparts have done, are advising customers not to use the system. It’s just another example of how backward our banks are in their thinking about personal finances, even if they are improving on the service front.
Some argue that this whole dust up could have been avoided if 22seven had approached the local banks beforehand and arranged for a free application programming interface, or API, to be made available to third party sites. Even an official at local bank Absa, Christo Vrey, has singled a willingness to make an API available, although he remains ambiguous about a time frame for doing this. Absa is reportedly also working on its own financial management application that it wants to roll out to its customers soon.
Last week Jordaan’s FNB became the first bank to break from the big four, indicating its desire to work with 22seven in an email sent to its customers. The bank decided to allow users to create a limited profile in order for the company to gain to access their accounts.
22seven will be free while it’s in beta testing. The full version will cost users roughly $10 a month. While the site is being heralded by some as a “world-class” product, the current version runs on oft-maligned Flash, making its design outdated at launch. The company has said that it plans to develop apps for mobile devices like iPhones and iPads that aren’t Flash-friendly.
http://www.smartplanet.com
Friday 17 February 2012
Mzansi accounts reach dead end
The big banks in South Africa are scrambling to lure the country's 27-million customers in the mass market with more innovative and cheaper product offerings in a move that marks the near death of the Mzansi account.
FNB was the first bank to challenge Capitec in offering a no-frills, simple bank account when it launched EasyPlan almost two years ago. The other banks have followed and all are now aiming to provide low-cost banking for less than R30 a month.
In July last year Nedbank launched the Ke Yona account; this month Absa extended its Transact account across all its branches and Standard Bank will soon announce its Access account, a paperless, electronic origination bank account.
These banking products are in essence a maturing of the Mzansi bank account. For some banks, Mzansi was a kneejerk reaction to the financial sector charter and it never became fully integrated into their overall banking model. Instead, it was an expensive exercise written off as a social obligation, rather than a real acquisition strategy.
"Mzansi was loss-making," said Leon Barnard, director of Standard Bank inclusive banking. "It had high cost origination in-branch, servicing was expensive and customer utilisation was very low."
Even Nedbank, which had a highly successful Mzansi drive resulting in the largest number of Mzansi accounts of the big four banks, conceded that it experienced a shift away from the Mzansi account as clients' needs continued to change and more appropriate products were designed.
"With the Nedbank Ke Yona offering, we have seen a significant uptake more than three times that of the Mzansi account. Nedbank has more than three million entry-level clients, which include the youth," said Anton de Wet, managing executive of client engagement at Nedbank.
Gift Manyanga, chief executive of FNB EasyPlan, said customers tended to feel ambivalent about Mzansi. "Some customers find it a good fit; others felt it was a poor person's bank account. There are also limits and it becomes expensive with a high number of transactions, or if you have more than R15 000 in the account." Manyanga said there had been a dramatic fall in the uptake of new Mzansi accounts, but the transactional levels remained static.
For many customers the banks' own branded accounts are now cheaper than Mzansi. For example, an FNB Mzansi customer will pay R5 for a cash withdrawal, whereas an EasyPlan customer will pay R2.95. The only real cost advantage of Mzansi is that there are no additional Saswitch fees when withdrawing from another bank's ATM.
More than a bank account
The key for the banks is not to make the same mistakes. Therefore these new accounts come with a new strategy. They need to be sustainable and offer cross-selling opportunities, and they must not be just for low-income, low-transactional earners. In most cases customers earning up to R100 000 a year will find these accounts more cost-effective than present bank offerings. For example, Manyanga said FNB EasyPlan had customers earning up to R300 000 a year. He uses the account and his monthly banking fees are about R34.
"We see this as an opportunity to roll out full financial access through the cross-selling of other accounts in order to be profitable. It is not about flogging cheap accounts," said Lawrence Twigg, managing executive of entry-level and inclusive banking at Absa.
Cross-selling is a key driver of this account, which is why Absa requires customers to have a minimum regular income of R2 000 a month. In fact, the account becomes quite expensive for a customer who does not earn that.
The Nedbank Ke Yona account comprises the pay-as-you-use transactional account, funeral cover, personal loan, JustSave account and Vodacom M-pesa, a money transfer option, all of which enable clients to transact, borrow, save and insure. "We intend to provide them with relevant solutions throughout their life cycle: from the first time they open a savings account, their first job, car, home loan, or when they get married and start a family," said De Wet.
Manyanga said branches signed 15 000 new customers a month and issued 13 000 loans and 6 000 funeral policies. Of the loans, about 35% was new customers to FNB, which offered the opportunity to cross-sell an FNB transaction bank account.
The future of Mzansi
Absa will continue with its Mzansi account because it still has its place as an account for irregular workers or grant recipients, said Twigg. There is also the Absa prepaid debit card that provides basic transactional banking such as cash deposits and point-of-sale transactions. "The aim is to migrate those account-holders into Absa Transact once they are regular earners," said Twigg.
Standard Bank Access, Barnard said, was effectively the Mzansi and E-plan accounts amalgamated into one product. It is based on the MobileMoney account that has been rolled out in townships, where customers are signed up in a paperless electronic environment, dramatically cutting acquisition costs. Customers can open an account at their workplace or at their local spaza shop, known as a bank shop, where they can deposit and withdraw money at reduced rates and buy airtime and electricity.
Like Absa Transact and Nedbank Ke Yona, Standard Bank Access has no monthly fee. "We have simplified the fees, removed ad valorem pricing and there is no monthly fee," said Barnard. He added that it would be the most cost-effective banking product for people earning up to R8 000 a month, which gave it a potential market of 27-million people.
"By the end of the year the bank will have migrated all customers across to a better product with better functionality at a lower price."
Maya Fisher-French
Mail & Guardian
Feb 17, 2012
FNB was the first bank to challenge Capitec in offering a no-frills, simple bank account when it launched EasyPlan almost two years ago. The other banks have followed and all are now aiming to provide low-cost banking for less than R30 a month.
In July last year Nedbank launched the Ke Yona account; this month Absa extended its Transact account across all its branches and Standard Bank will soon announce its Access account, a paperless, electronic origination bank account.
These banking products are in essence a maturing of the Mzansi bank account. For some banks, Mzansi was a kneejerk reaction to the financial sector charter and it never became fully integrated into their overall banking model. Instead, it was an expensive exercise written off as a social obligation, rather than a real acquisition strategy.
"Mzansi was loss-making," said Leon Barnard, director of Standard Bank inclusive banking. "It had high cost origination in-branch, servicing was expensive and customer utilisation was very low."
Even Nedbank, which had a highly successful Mzansi drive resulting in the largest number of Mzansi accounts of the big four banks, conceded that it experienced a shift away from the Mzansi account as clients' needs continued to change and more appropriate products were designed.
"With the Nedbank Ke Yona offering, we have seen a significant uptake more than three times that of the Mzansi account. Nedbank has more than three million entry-level clients, which include the youth," said Anton de Wet, managing executive of client engagement at Nedbank.
Gift Manyanga, chief executive of FNB EasyPlan, said customers tended to feel ambivalent about Mzansi. "Some customers find it a good fit; others felt it was a poor person's bank account. There are also limits and it becomes expensive with a high number of transactions, or if you have more than R15 000 in the account." Manyanga said there had been a dramatic fall in the uptake of new Mzansi accounts, but the transactional levels remained static.
For many customers the banks' own branded accounts are now cheaper than Mzansi. For example, an FNB Mzansi customer will pay R5 for a cash withdrawal, whereas an EasyPlan customer will pay R2.95. The only real cost advantage of Mzansi is that there are no additional Saswitch fees when withdrawing from another bank's ATM.
More than a bank account
The key for the banks is not to make the same mistakes. Therefore these new accounts come with a new strategy. They need to be sustainable and offer cross-selling opportunities, and they must not be just for low-income, low-transactional earners. In most cases customers earning up to R100 000 a year will find these accounts more cost-effective than present bank offerings. For example, Manyanga said FNB EasyPlan had customers earning up to R300 000 a year. He uses the account and his monthly banking fees are about R34.
"We see this as an opportunity to roll out full financial access through the cross-selling of other accounts in order to be profitable. It is not about flogging cheap accounts," said Lawrence Twigg, managing executive of entry-level and inclusive banking at Absa.
Cross-selling is a key driver of this account, which is why Absa requires customers to have a minimum regular income of R2 000 a month. In fact, the account becomes quite expensive for a customer who does not earn that.
The Nedbank Ke Yona account comprises the pay-as-you-use transactional account, funeral cover, personal loan, JustSave account and Vodacom M-pesa, a money transfer option, all of which enable clients to transact, borrow, save and insure. "We intend to provide them with relevant solutions throughout their life cycle: from the first time they open a savings account, their first job, car, home loan, or when they get married and start a family," said De Wet.
Manyanga said branches signed 15 000 new customers a month and issued 13 000 loans and 6 000 funeral policies. Of the loans, about 35% was new customers to FNB, which offered the opportunity to cross-sell an FNB transaction bank account.
The future of Mzansi
Absa will continue with its Mzansi account because it still has its place as an account for irregular workers or grant recipients, said Twigg. There is also the Absa prepaid debit card that provides basic transactional banking such as cash deposits and point-of-sale transactions. "The aim is to migrate those account-holders into Absa Transact once they are regular earners," said Twigg.
Standard Bank Access, Barnard said, was effectively the Mzansi and E-plan accounts amalgamated into one product. It is based on the MobileMoney account that has been rolled out in townships, where customers are signed up in a paperless electronic environment, dramatically cutting acquisition costs. Customers can open an account at their workplace or at their local spaza shop, known as a bank shop, where they can deposit and withdraw money at reduced rates and buy airtime and electricity.
Like Absa Transact and Nedbank Ke Yona, Standard Bank Access has no monthly fee. "We have simplified the fees, removed ad valorem pricing and there is no monthly fee," said Barnard. He added that it would be the most cost-effective banking product for people earning up to R8 000 a month, which gave it a potential market of 27-million people.
"By the end of the year the bank will have migrated all customers across to a better product with better functionality at a lower price."
Maya Fisher-French
Mail & Guardian
Feb 17, 2012
Mzansi accounts reach dead end
The big banks in South Africa are scrambling to lure the country's 27-million customers in the mass market with more innovative and cheaper product offerings in a move that marks the near death of the Mzansi account.
FNB was the first bank to challenge Capitec in offering a no-frills, simple bank account when it launched EasyPlan almost two years ago. The other banks have followed and all are now aiming to provide low-cost banking for less than R30 a month.
In July last year Nedbank launched the Ke Yona account; this month Absa extended its Transact account across all its branches and Standard Bank will soon announce its Access account, a paperless, electronic origination bank account.
These banking products are in essence a maturing of the Mzansi bank account. For some banks, Mzansi was a kneejerk reaction to the financial sector charter and it never became fully integrated into their overall banking model. Instead, it was an expensive exercise written off as a social obligation, rather than a real acquisition strategy.
"Mzansi was loss-making," said Leon Barnard, director of Standard Bank inclusive banking. "It had high cost origination in-branch, servicing was expensive and customer utilisation was very low."
Even Nedbank, which had a highly successful Mzansi drive resulting in the largest number of Mzansi accounts of the big four banks, conceded that it experienced a shift away from the Mzansi account as clients' needs continued to change and more appropriate products were designed.
"With the Nedbank Ke Yona offering, we have seen a significant uptake more than three times that of the Mzansi account. Nedbank has more than three million entry-level clients, which include the youth," said Anton de Wet, managing executive of client engagement at Nedbank.
Gift Manyanga, chief executive of FNB EasyPlan, said customers tended to feel ambivalent about Mzansi. "Some customers find it a good fit; others felt it was a poor person's bank account. There are also limits and it becomes expensive with a high number of transactions, or if you have more than R15 000 in the account." Manyanga said there had been a dramatic fall in the uptake of new Mzansi accounts, but the transactional levels remained static.
For many customers the banks' own branded accounts are now cheaper than Mzansi. For example, an FNB Mzansi customer will pay R5 for a cash withdrawal, whereas an EasyPlan customer will pay R2.95. The only real cost advantage of Mzansi is that there are no additional Saswitch fees when withdrawing from another bank's ATM.
More than a bank account
The key for the banks is not to make the same mistakes. Therefore these new accounts come with a new strategy. They need to be sustainable and offer cross-selling opportunities, and they must not be just for low-income, low-transactional earners. In most cases customers earning up to R100 000 a year will find these accounts more cost-effective than present bank offerings. For example, Manyanga said FNB EasyPlan had customers earning up to R300 000 a year. He uses the account and his monthly banking fees are about R34.
"We see this as an opportunity to roll out full financial access through the cross-selling of other accounts in order to be profitable. It is not about flogging cheap accounts," said Lawrence Twigg, managing executive of entry-level and inclusive banking at Absa.
Cross-selling is a key driver of this account, which is why Absa requires customers to have a minimum regular income of R2 000 a month. In fact, the account becomes quite expensive for a customer who does not earn that.
The Nedbank Ke Yona account comprises the pay-as-you-use transactional account, funeral cover, personal loan, JustSave account and Vodacom M-pesa, a money transfer option, all of which enable clients to transact, borrow, save and insure. "We intend to provide them with relevant solutions throughout their life cycle: from the first time they open a savings account, their first job, car, home loan, or when they get married and start a family," said De Wet.
Manyanga said branches signed 15 000 new customers a month and issued 13 000 loans and 6 000 funeral policies. Of the loans, about 35% was new customers to FNB, which offered the opportunity to cross-sell an FNB transaction bank account.
The future of Mzansi
Absa will continue with its Mzansi account because it still has its place as an account for irregular workers or grant recipients, said Twigg. There is also the Absa prepaid debit card that provides basic transactional banking such as cash deposits and point-of-sale transactions. "The aim is to migrate those account-holders into Absa Transact once they are regular earners," said Twigg.
Standard Bank Access, Barnard said, was effectively the Mzansi and E-plan accounts amalgamated into one product. It is based on the MobileMoney account that has been rolled out in townships, where customers are signed up in a paperless electronic environment, dramatically cutting acquisition costs. Customers can open an account at their workplace or at their local spaza shop, known as a bank shop, where they can deposit and withdraw money at reduced rates and buy airtime and electricity.
Like Absa Transact and Nedbank Ke Yona, Standard Bank Access has no monthly fee. "We have simplified the fees, removed ad valorem pricing and there is no monthly fee," said Barnard. He added that it would be the most cost-effective banking product for people earning up to R8 000 a month, which gave it a potential market of 27-million people.
"By the end of the year the bank will have migrated all customers across to a better product with better functionality at a lower price."
Maya Fisher-French
Mail & Guardian
Feb 17, 2012
FNB was the first bank to challenge Capitec in offering a no-frills, simple bank account when it launched EasyPlan almost two years ago. The other banks have followed and all are now aiming to provide low-cost banking for less than R30 a month.
In July last year Nedbank launched the Ke Yona account; this month Absa extended its Transact account across all its branches and Standard Bank will soon announce its Access account, a paperless, electronic origination bank account.
These banking products are in essence a maturing of the Mzansi bank account. For some banks, Mzansi was a kneejerk reaction to the financial sector charter and it never became fully integrated into their overall banking model. Instead, it was an expensive exercise written off as a social obligation, rather than a real acquisition strategy.
"Mzansi was loss-making," said Leon Barnard, director of Standard Bank inclusive banking. "It had high cost origination in-branch, servicing was expensive and customer utilisation was very low."
Even Nedbank, which had a highly successful Mzansi drive resulting in the largest number of Mzansi accounts of the big four banks, conceded that it experienced a shift away from the Mzansi account as clients' needs continued to change and more appropriate products were designed.
"With the Nedbank Ke Yona offering, we have seen a significant uptake more than three times that of the Mzansi account. Nedbank has more than three million entry-level clients, which include the youth," said Anton de Wet, managing executive of client engagement at Nedbank.
Gift Manyanga, chief executive of FNB EasyPlan, said customers tended to feel ambivalent about Mzansi. "Some customers find it a good fit; others felt it was a poor person's bank account. There are also limits and it becomes expensive with a high number of transactions, or if you have more than R15 000 in the account." Manyanga said there had been a dramatic fall in the uptake of new Mzansi accounts, but the transactional levels remained static.
For many customers the banks' own branded accounts are now cheaper than Mzansi. For example, an FNB Mzansi customer will pay R5 for a cash withdrawal, whereas an EasyPlan customer will pay R2.95. The only real cost advantage of Mzansi is that there are no additional Saswitch fees when withdrawing from another bank's ATM.
More than a bank account
The key for the banks is not to make the same mistakes. Therefore these new accounts come with a new strategy. They need to be sustainable and offer cross-selling opportunities, and they must not be just for low-income, low-transactional earners. In most cases customers earning up to R100 000 a year will find these accounts more cost-effective than present bank offerings. For example, Manyanga said FNB EasyPlan had customers earning up to R300 000 a year. He uses the account and his monthly banking fees are about R34.
"We see this as an opportunity to roll out full financial access through the cross-selling of other accounts in order to be profitable. It is not about flogging cheap accounts," said Lawrence Twigg, managing executive of entry-level and inclusive banking at Absa.
Cross-selling is a key driver of this account, which is why Absa requires customers to have a minimum regular income of R2 000 a month. In fact, the account becomes quite expensive for a customer who does not earn that.
The Nedbank Ke Yona account comprises the pay-as-you-use transactional account, funeral cover, personal loan, JustSave account and Vodacom M-pesa, a money transfer option, all of which enable clients to transact, borrow, save and insure. "We intend to provide them with relevant solutions throughout their life cycle: from the first time they open a savings account, their first job, car, home loan, or when they get married and start a family," said De Wet.
Manyanga said branches signed 15 000 new customers a month and issued 13 000 loans and 6 000 funeral policies. Of the loans, about 35% was new customers to FNB, which offered the opportunity to cross-sell an FNB transaction bank account.
The future of Mzansi
Absa will continue with its Mzansi account because it still has its place as an account for irregular workers or grant recipients, said Twigg. There is also the Absa prepaid debit card that provides basic transactional banking such as cash deposits and point-of-sale transactions. "The aim is to migrate those account-holders into Absa Transact once they are regular earners," said Twigg.
Standard Bank Access, Barnard said, was effectively the Mzansi and E-plan accounts amalgamated into one product. It is based on the MobileMoney account that has been rolled out in townships, where customers are signed up in a paperless electronic environment, dramatically cutting acquisition costs. Customers can open an account at their workplace or at their local spaza shop, known as a bank shop, where they can deposit and withdraw money at reduced rates and buy airtime and electricity.
Like Absa Transact and Nedbank Ke Yona, Standard Bank Access has no monthly fee. "We have simplified the fees, removed ad valorem pricing and there is no monthly fee," said Barnard. He added that it would be the most cost-effective banking product for people earning up to R8 000 a month, which gave it a potential market of 27-million people.
"By the end of the year the bank will have migrated all customers across to a better product with better functionality at a lower price."
Maya Fisher-French
Mail & Guardian
Feb 17, 2012
Monday 13 February 2012
Switching your bank account as easy as one, two, three
February 12 2012 at 12:10pm
By Angelique Arde
So you want to ditch your bank and switch to another, but you’re daunted by the prospect of switching and all that it entails?
The Banking Association of South Africa (Basa) has released an updated Code of Banking Practice, which covers switching a transaction account to another bank. It spells out your role and that of your old and new banks.
Basa is an industry body that represents all registered banks in South Africa. Its new code commits members to “making it as seamless and easy as possible for all personal transaction account customers to switch banks”.
The code relates only to transactional accounts, not deposits and loans, which are individual contracts. You may terminate deposits and loans according to the contractual terms, it says.
The code explains that since banks compete to attract new transaction account customers, you need to compare their products and services, fees and charges.
“A number of independent comparison calculators are available to assist you in this. We (your bank) will also assist you to calculate the costs for your specific transaction pattern via our website, call centre or branch services.”
Basa advises that you take the following into consideration before you start the process of switching:
* The rates and fees of your current bank versus another bank;
* Whether the location of branches and ATMs meets your needs; and
* The additional benefits on offer from both banks.
Depending on how you bank, the location of branches and ATMs may be of lesser or greater significance to you.
Once you’ve decided on a new bank, how do you go about switching? Basa says it can be done in three easy steps: open a new account, switch transactions, and close your old account.
1. Open a new account
The first step is to open an account with your new bank.
Give your new bank the appropriate information so that it can transfer debit orders, arrange new stop orders and, if relevant, load your payment beneficiaries.
Most of the banks will do all of this for you at no cost.
Sugendhree Reddy, the director of banking products at Standard Bank, says Standard Bank handles the switching of debit orders as a free service to new clients.
So does Absa, Arrie Rautenbach, the head of retail markets at Absa, says. The bank also notifies your employer of your new Absa account so that your salary is paid into it.
“Switching is a key service that we provide to new customers free of charge. Once a new customer applies for a transactional account, either online or in a branch, Absa’s dedicated switching team will facilitate the necessary changes for the customer,” Rautenbach says.
Andrew Bladon, the head of sales at the Core Banking Solutions division of First National Bank (FNB), says at FNB debit-order switching, salary switching and the loading of beneficiaries are done free of charge for new clients. To switch to FNB, all you do is give the bank your most recent bank statement, for it to identify your debit orders, and sign a one-page mandate, which gives FNB permission to act on your behalf when instructing your service providers about your new banking details, Bladon says.
Anton de Wet, the head of client engagement at Nedbank, says Nedbank ensures that the switching of debit orders and salaries is “seamless” and “hassle-free”.
Your new bank will also provide you with the following information:
* The terms and conditions that are applicable to your new account;
* Details of the fees, charges and interest rates that apply to your new account; and
* Contact information for further assistance in switching your account.
The Code of Banking Practice says: “When you give your new bank a signed debit order or salary redirect form, the bank may inform existing debit order originators of the new account details. You may have to confirm this with the originators.”
The code says that while the banks are committed to ensuring the process is smooth, it requires the co-operation of all parties involved – especially debit order originators and salary, income and benefit payers.
2. Switch transactions
Ask your old bank to provide you with the following information, which, in terms of the code, it must do within 10 business days of your notifying it that you are switching:
* Up to three months’ statements;
* A list of stop orders loaded on your account;
* A list of beneficiaries loaded on your account; and
* Any supplementary or linked cards or accounts that may be affected by the switch.
3. Close the old account
Instruct your old bank to close your account.
Basa says it’s advisable to keep the old account open for at least six weeks after you have switched, so that all transactions can be identified and switched. “Keep some funds in the old account to cover any transactions that are not switched in the six weeks.”
Rautenbach warns that while both accounts are open, you must budget for the cost of maintaining them. He suggests you load an overdraft facility in case payments continue to be deducted from your old account.
“If something goes wrong and an automatic payment bounces, you could be asked to pay a fee, either by your account provider or by whoever the payment was going to. The mistake may be someone else’s fault if, for example, the paperwork you provided was not processed (by the account provider) on time. If this is the case, complain. You may be able to get the fee waived,” he says.
Once you’ve switched, Basa advises that you keep an eye on your debit orders and other transactions to avoid unpaid debit orders and to ensure all transaction originators are using your new banking details.
And don’t forget those once-a-year debit or stop orders in your switching instructions to your new bank.
To download the updated Code of Banking Practice, go to www.banking.org.za. You’ll find it on the home page under “What’s new”.
COMPLEXITY HOLDS YOU CAPTIVE, SAYS BANKING OMBUDSMAN
Clive Pillay, the Ombudsman for Banking Services, says he is not surprised that his office hasn’t received complaints relating directly to switching accounts from one bank to another. Clients are hindered by “banking product and pricing complexity”, which makes it difficult for them to make comparisons, he says.
“Since 2004, the Falkena Report into competition in South African banking identified switching as a problem. The report found that consumers were deterred from switching accounts due to problems with information (insufficient) and costs,” Pillay says.
In 2008, the Enquiry Panel of the Competition Commission also found that the cost to customers of switching banks, including the cost of finding an alternative, created “a significant degree of customer captivity”, he says.
The panel recommended that the Banking Association of South Africa (Basa) develop a set of criteria for a switching code to be included in its Code of Banking Practice.
Late last year, Basa released a revised code of practice, including a switching code.
The switching code does make switching from one bank to another “relatively easy”, Pillay says. However, the problem, he says, is that the switching code in itself will not achieve the objective of facilitating the switching of accounts.
“The problem, in my opinion, lies in the fact that there is considerable product and pricing complexity in banking, coupled with information asymmetries (inequality of information).
“With regards to product and pricing complexity, banks appear to offer the same set of account-holding and transaction facilities, but these facilities are bundled, packaged and priced differently.
“The panel found that there is a need for simplified offerings that can be readily compared, both in price and content,” Pillay says.
The second problem, that of asymmetry of information, makes it difficult for consumers to understand, assess and compare the different offerings of the bank.
“It is only once a consumer understands the product and the pricing and has sufficient information at his or her disposal to be able to make a comparison, that he or she can then make an informed decision, and then switching becomes an option.”
Pillay says: “There is a need for banks to simplify their products, be more transparent with pricing and supplement this with sufficient information so as to enable a consumer to make a meaningful comparison between banks and ultimately an informed decision on switching.”
* You can contact the Ombudsman for Banking Services by telephoning 0860 800 900, faxing 011 483 3212 or emailing info@obssa.co.za
BE SURE TO SWITCH FOR THE RIGHT REASONS
To lure new clients into opening a transaction account, some banks are offering enticing extras – from discounted tablet computers and smartphones to free subscriptions to online, cellphone and telephone banking.
Some of these offers are on condition that your salary is paid into a new cheque account and that you switch your debit orders to the new account.
Excellent as these offers may be, make sure your decision to switch banks is carefully considered and based on sound reasons.
FNB is offering smartphones and tablets at reduced rates to new clients who open a cheque account with the bank. (The offer is also open to existing FNB account holders.) The beauty of FNB’s offer is that you not only stand to score a discount of up to 30 percent on a smartphone or tablet, but you also get to pay it off over 24 months interest-free.
Andrew Bladon, the head of sales at FNB’s Core Banking Solutions division, says the demand for the offer has far exceeded expectations.
Bladon says that since the offer was launched (in October last year), FNB has seen “significant month-on-month growth in new account sales volumes”.
He says the offer is aimed at giving clients access to “aspirational innovative technologies” at less than what the devices cost at retail outlets.
FNB’s offer should also be seen in light of its active promotion of day-to-day banking via electronic banking channels, such as the FNB Banking App, internet and mobile banking, as well as paying for goods with your card rather than cash.
“Our proposition is that a customer will never have to visit our branches unless they choose to,” Bladon says.
Absa offers new clients who open a transactional package the following:
* Free subscriptions to online, cellphone and telephone banking;
* An unlimited number of debit and stop orders;
* Overdraft facilities;
* A free garage card with no debit transaction fees;
* Free SMS notification; and
* A bundled offering, including the option to switch your home loan to Absa.
Arrie Rautenbach, the head of retail markets at Absa, says some banks throw in freebies such as free travel insurance. He says some of these come with a catch and advises you read the small print before signing up.
CAPITEC’s NEW CLIENTS ‘ARE FROM OTHER BANKS’
Capitec Bank, which is reportedly signing up 100 000 new clients a month, says most of its new clients are switching from other banks, as opposed to being previously unbanked clients.
Capitec offers just one account: a savings and transaction account in one.
Carl Fischer, the head of marketing and corporate affairs at Capitec, says during the 11-year-old bank’s “establishment phase” clients were predominantly previously unbanked. But since 2009, most of Capitec’s clients have come from other banks.
Fischer says that although the bank does not record the reasons clients switch to Capitec, feedback and research suggests that the simplicity of the bank’s offering compared with the complexity of their competitors’ offerings is the main reason clients are switching.
Capitec promotes its “simplified services and pricing structure”. The bank charges a fixed withdrawal fee of R3.75 (or R7 at other banks’ ATMs) instead of charging fees on a sliding scale. The penalty fee on unpaid debit orders is R3.75, versus R90 on most accounts at Nedbank, for example.
Arrie Rautenbach, the head of retail markets at Absa, says Absa has identified the key reasons for switching. He says transparency, language, customer needs, fees, skills, and bundled offers all play a part in a client’s decision to switch.
“If information on products and fees is not presented in a user-friendly way, it’s misinterpreted. Many South Africans don’t have English as a first language and have difficulty making sense of brochures or understanding the terms and conditions of a product. Bank employees are not always au fait with bank products and cannot advise clients with regard to the best banking options.”
Sugendhree Reddy, the director of banking products at Standard Bank, says clients often switch because they perceive they can get a better price elsewhere.
“Standard Bank encourages customers to take an interest in their bank charges and understand why they pay the fees they do.”
None of the big four banks – Absa, First National Bank, Nedbank and Standard Bank – would disclose the number of transaction accounts that they have lost over the past year. They say they are growing their new business, and new clients include those from other banks.
By Angelique Arde
So you want to ditch your bank and switch to another, but you’re daunted by the prospect of switching and all that it entails?
The Banking Association of South Africa (Basa) has released an updated Code of Banking Practice, which covers switching a transaction account to another bank. It spells out your role and that of your old and new banks.
Basa is an industry body that represents all registered banks in South Africa. Its new code commits members to “making it as seamless and easy as possible for all personal transaction account customers to switch banks”.
The code relates only to transactional accounts, not deposits and loans, which are individual contracts. You may terminate deposits and loans according to the contractual terms, it says.
The code explains that since banks compete to attract new transaction account customers, you need to compare their products and services, fees and charges.
“A number of independent comparison calculators are available to assist you in this. We (your bank) will also assist you to calculate the costs for your specific transaction pattern via our website, call centre or branch services.”
Basa advises that you take the following into consideration before you start the process of switching:
* The rates and fees of your current bank versus another bank;
* Whether the location of branches and ATMs meets your needs; and
* The additional benefits on offer from both banks.
Depending on how you bank, the location of branches and ATMs may be of lesser or greater significance to you.
Once you’ve decided on a new bank, how do you go about switching? Basa says it can be done in three easy steps: open a new account, switch transactions, and close your old account.
1. Open a new account
The first step is to open an account with your new bank.
Give your new bank the appropriate information so that it can transfer debit orders, arrange new stop orders and, if relevant, load your payment beneficiaries.
Most of the banks will do all of this for you at no cost.
Sugendhree Reddy, the director of banking products at Standard Bank, says Standard Bank handles the switching of debit orders as a free service to new clients.
So does Absa, Arrie Rautenbach, the head of retail markets at Absa, says. The bank also notifies your employer of your new Absa account so that your salary is paid into it.
“Switching is a key service that we provide to new customers free of charge. Once a new customer applies for a transactional account, either online or in a branch, Absa’s dedicated switching team will facilitate the necessary changes for the customer,” Rautenbach says.
Andrew Bladon, the head of sales at the Core Banking Solutions division of First National Bank (FNB), says at FNB debit-order switching, salary switching and the loading of beneficiaries are done free of charge for new clients. To switch to FNB, all you do is give the bank your most recent bank statement, for it to identify your debit orders, and sign a one-page mandate, which gives FNB permission to act on your behalf when instructing your service providers about your new banking details, Bladon says.
Anton de Wet, the head of client engagement at Nedbank, says Nedbank ensures that the switching of debit orders and salaries is “seamless” and “hassle-free”.
Your new bank will also provide you with the following information:
* The terms and conditions that are applicable to your new account;
* Details of the fees, charges and interest rates that apply to your new account; and
* Contact information for further assistance in switching your account.
The Code of Banking Practice says: “When you give your new bank a signed debit order or salary redirect form, the bank may inform existing debit order originators of the new account details. You may have to confirm this with the originators.”
The code says that while the banks are committed to ensuring the process is smooth, it requires the co-operation of all parties involved – especially debit order originators and salary, income and benefit payers.
2. Switch transactions
Ask your old bank to provide you with the following information, which, in terms of the code, it must do within 10 business days of your notifying it that you are switching:
* Up to three months’ statements;
* A list of stop orders loaded on your account;
* A list of beneficiaries loaded on your account; and
* Any supplementary or linked cards or accounts that may be affected by the switch.
3. Close the old account
Instruct your old bank to close your account.
Basa says it’s advisable to keep the old account open for at least six weeks after you have switched, so that all transactions can be identified and switched. “Keep some funds in the old account to cover any transactions that are not switched in the six weeks.”
Rautenbach warns that while both accounts are open, you must budget for the cost of maintaining them. He suggests you load an overdraft facility in case payments continue to be deducted from your old account.
“If something goes wrong and an automatic payment bounces, you could be asked to pay a fee, either by your account provider or by whoever the payment was going to. The mistake may be someone else’s fault if, for example, the paperwork you provided was not processed (by the account provider) on time. If this is the case, complain. You may be able to get the fee waived,” he says.
Once you’ve switched, Basa advises that you keep an eye on your debit orders and other transactions to avoid unpaid debit orders and to ensure all transaction originators are using your new banking details.
And don’t forget those once-a-year debit or stop orders in your switching instructions to your new bank.
To download the updated Code of Banking Practice, go to www.banking.org.za. You’ll find it on the home page under “What’s new”.
COMPLEXITY HOLDS YOU CAPTIVE, SAYS BANKING OMBUDSMAN
Clive Pillay, the Ombudsman for Banking Services, says he is not surprised that his office hasn’t received complaints relating directly to switching accounts from one bank to another. Clients are hindered by “banking product and pricing complexity”, which makes it difficult for them to make comparisons, he says.
“Since 2004, the Falkena Report into competition in South African banking identified switching as a problem. The report found that consumers were deterred from switching accounts due to problems with information (insufficient) and costs,” Pillay says.
In 2008, the Enquiry Panel of the Competition Commission also found that the cost to customers of switching banks, including the cost of finding an alternative, created “a significant degree of customer captivity”, he says.
The panel recommended that the Banking Association of South Africa (Basa) develop a set of criteria for a switching code to be included in its Code of Banking Practice.
Late last year, Basa released a revised code of practice, including a switching code.
The switching code does make switching from one bank to another “relatively easy”, Pillay says. However, the problem, he says, is that the switching code in itself will not achieve the objective of facilitating the switching of accounts.
“The problem, in my opinion, lies in the fact that there is considerable product and pricing complexity in banking, coupled with information asymmetries (inequality of information).
“With regards to product and pricing complexity, banks appear to offer the same set of account-holding and transaction facilities, but these facilities are bundled, packaged and priced differently.
“The panel found that there is a need for simplified offerings that can be readily compared, both in price and content,” Pillay says.
The second problem, that of asymmetry of information, makes it difficult for consumers to understand, assess and compare the different offerings of the bank.
“It is only once a consumer understands the product and the pricing and has sufficient information at his or her disposal to be able to make a comparison, that he or she can then make an informed decision, and then switching becomes an option.”
Pillay says: “There is a need for banks to simplify their products, be more transparent with pricing and supplement this with sufficient information so as to enable a consumer to make a meaningful comparison between banks and ultimately an informed decision on switching.”
* You can contact the Ombudsman for Banking Services by telephoning 0860 800 900, faxing 011 483 3212 or emailing info@obssa.co.za
BE SURE TO SWITCH FOR THE RIGHT REASONS
To lure new clients into opening a transaction account, some banks are offering enticing extras – from discounted tablet computers and smartphones to free subscriptions to online, cellphone and telephone banking.
Some of these offers are on condition that your salary is paid into a new cheque account and that you switch your debit orders to the new account.
Excellent as these offers may be, make sure your decision to switch banks is carefully considered and based on sound reasons.
FNB is offering smartphones and tablets at reduced rates to new clients who open a cheque account with the bank. (The offer is also open to existing FNB account holders.) The beauty of FNB’s offer is that you not only stand to score a discount of up to 30 percent on a smartphone or tablet, but you also get to pay it off over 24 months interest-free.
Andrew Bladon, the head of sales at FNB’s Core Banking Solutions division, says the demand for the offer has far exceeded expectations.
Bladon says that since the offer was launched (in October last year), FNB has seen “significant month-on-month growth in new account sales volumes”.
He says the offer is aimed at giving clients access to “aspirational innovative technologies” at less than what the devices cost at retail outlets.
FNB’s offer should also be seen in light of its active promotion of day-to-day banking via electronic banking channels, such as the FNB Banking App, internet and mobile banking, as well as paying for goods with your card rather than cash.
“Our proposition is that a customer will never have to visit our branches unless they choose to,” Bladon says.
Absa offers new clients who open a transactional package the following:
* Free subscriptions to online, cellphone and telephone banking;
* An unlimited number of debit and stop orders;
* Overdraft facilities;
* A free garage card with no debit transaction fees;
* Free SMS notification; and
* A bundled offering, including the option to switch your home loan to Absa.
Arrie Rautenbach, the head of retail markets at Absa, says some banks throw in freebies such as free travel insurance. He says some of these come with a catch and advises you read the small print before signing up.
CAPITEC’s NEW CLIENTS ‘ARE FROM OTHER BANKS’
Capitec Bank, which is reportedly signing up 100 000 new clients a month, says most of its new clients are switching from other banks, as opposed to being previously unbanked clients.
Capitec offers just one account: a savings and transaction account in one.
Carl Fischer, the head of marketing and corporate affairs at Capitec, says during the 11-year-old bank’s “establishment phase” clients were predominantly previously unbanked. But since 2009, most of Capitec’s clients have come from other banks.
Fischer says that although the bank does not record the reasons clients switch to Capitec, feedback and research suggests that the simplicity of the bank’s offering compared with the complexity of their competitors’ offerings is the main reason clients are switching.
Capitec promotes its “simplified services and pricing structure”. The bank charges a fixed withdrawal fee of R3.75 (or R7 at other banks’ ATMs) instead of charging fees on a sliding scale. The penalty fee on unpaid debit orders is R3.75, versus R90 on most accounts at Nedbank, for example.
Arrie Rautenbach, the head of retail markets at Absa, says Absa has identified the key reasons for switching. He says transparency, language, customer needs, fees, skills, and bundled offers all play a part in a client’s decision to switch.
“If information on products and fees is not presented in a user-friendly way, it’s misinterpreted. Many South Africans don’t have English as a first language and have difficulty making sense of brochures or understanding the terms and conditions of a product. Bank employees are not always au fait with bank products and cannot advise clients with regard to the best banking options.”
Sugendhree Reddy, the director of banking products at Standard Bank, says clients often switch because they perceive they can get a better price elsewhere.
“Standard Bank encourages customers to take an interest in their bank charges and understand why they pay the fees they do.”
None of the big four banks – Absa, First National Bank, Nedbank and Standard Bank – would disclose the number of transaction accounts that they have lost over the past year. They say they are growing their new business, and new clients include those from other banks.
Friday 10 February 2012
RMB Private Bank scoops 6 2012 Euro money awards
The 2012 Euromoney Private Banking Survey has awarded RMB Private Bank six awards for private banking services, most prominent of which was the overall winner: best private banking service provider in South Africa and Africa.
The annual Euromoney Private Banking Survey provides a qualitative and quantitative review of the best services in private banking, by region, country and areas of service. The survey covers both global and regional categories and includes over 65 countries, as well as the vast array of services the wealth management industry provides.
Factors such as assets under management, profitability and services offered, in addition to other criteria, are all considered when ranking the top private banks.
"We are extremely proud of this achievement and the recognition from our peers. These awards stand testament to RMB Private Bank's commitment to building and maintaining solid relationships with our clients and providing sound wealth management solutions tailored to suit their individual, as well as family, wealth legacy aspirations," says Gavin Tarr, head of RMB Private Bank
The awards are categorised by region and country. RMB Private Bank also won the South African categories of: Best Relationship Management, Best Privacy and Security and the awards for Best High-net-worth-specific services and Best Super-affluent-net worth specific services.
In the aftermath of the global financial crisis, the emphasis on transparency, trust and the prioritisation of clients' needs has increased, especially in the private banking sector. With the introduction of new regulation, such as Basel 3, the business models private banks adopt need to be increasingly focused on liquidity, asset diversification and expectations of higher returns.
"These evolving customer needs imply that a one-size-fits-all approach to private banking is no longer relevant and we have adapted our business model to meet these requirements," adds Tarr.
Clive Horwood, Editor of Euromoney Magazine, noted: "Each year through our survey the industry recognises the brightest and the best institutions in global Private Banking. In a challenging and competitive market, this year's winners have continued to invest in the people and resources necessary to service their clients' needs.
"With the backing of FirstRand, we are able to offer our clients the comfort and security of FNB's innovative banking platform, while still maintaining the bespoke service offerings of a boutique wealth management house. We also understand that our clients are looking for non-traditional investment vehicles and, through our Group association, we are able to offer them access to RMB's merchant banking proprietary products," concludes Tarr.
http://www.businesslive.co.za
The annual Euromoney Private Banking Survey provides a qualitative and quantitative review of the best services in private banking, by region, country and areas of service. The survey covers both global and regional categories and includes over 65 countries, as well as the vast array of services the wealth management industry provides.
Factors such as assets under management, profitability and services offered, in addition to other criteria, are all considered when ranking the top private banks.
"We are extremely proud of this achievement and the recognition from our peers. These awards stand testament to RMB Private Bank's commitment to building and maintaining solid relationships with our clients and providing sound wealth management solutions tailored to suit their individual, as well as family, wealth legacy aspirations," says Gavin Tarr, head of RMB Private Bank
The awards are categorised by region and country. RMB Private Bank also won the South African categories of: Best Relationship Management, Best Privacy and Security and the awards for Best High-net-worth-specific services and Best Super-affluent-net worth specific services.
In the aftermath of the global financial crisis, the emphasis on transparency, trust and the prioritisation of clients' needs has increased, especially in the private banking sector. With the introduction of new regulation, such as Basel 3, the business models private banks adopt need to be increasingly focused on liquidity, asset diversification and expectations of higher returns.
"These evolving customer needs imply that a one-size-fits-all approach to private banking is no longer relevant and we have adapted our business model to meet these requirements," adds Tarr.
Clive Horwood, Editor of Euromoney Magazine, noted: "Each year through our survey the industry recognises the brightest and the best institutions in global Private Banking. In a challenging and competitive market, this year's winners have continued to invest in the people and resources necessary to service their clients' needs.
"With the backing of FirstRand, we are able to offer our clients the comfort and security of FNB's innovative banking platform, while still maintaining the bespoke service offerings of a boutique wealth management house. We also understand that our clients are looking for non-traditional investment vehicles and, through our Group association, we are able to offer them access to RMB's merchant banking proprietary products," concludes Tarr.
http://www.businesslive.co.za
Absa Promotion
Pay the lowest credit card interest rate with Absa
How does 8.8% sound?
Pay the lowest interest rate out there.
Promotion ends 31 March 2012
Your Absa Credit Card gives you exactly what you need today.
Better yet, we already have everything you could possibly need tomorrow.
Now you can bank on more reasons to be with Absa:
Dent your debt with 8.8% interest for 8 months*
Pay no transaction fees on purchases
Pay back as little as 3% in a tight-budget month
Get up to 57 interest-free days to pay on qualifying purchases
Purchase fuel on your credit card and pay no transaction fees
To apply for an Absa Credit Card, call 0861 114 411 or SMS your name*surname*ID number*cash to 35435 (e.g.John*Smith*8005025134084*cash) and we will contact you or visit your nearest Absa branch.
Terms and conditions apply
www.absa.co.za
How does 8.8% sound?
Pay the lowest interest rate out there.
Promotion ends 31 March 2012
Your Absa Credit Card gives you exactly what you need today.
Better yet, we already have everything you could possibly need tomorrow.
Now you can bank on more reasons to be with Absa:
Dent your debt with 8.8% interest for 8 months*
Pay no transaction fees on purchases
Pay back as little as 3% in a tight-budget month
Get up to 57 interest-free days to pay on qualifying purchases
Purchase fuel on your credit card and pay no transaction fees
To apply for an Absa Credit Card, call 0861 114 411 or SMS your name*surname*ID number*cash to 35435 (e.g.John*Smith*8005025134084*cash) and we will contact you or visit your nearest Absa branch.
Terms and conditions apply
www.absa.co.za
Briefly…Capitec crowd-sources comment on SA banking
Capitec Bank has come up with a campaign that responds to South Africans’ frustration with banks. The Speak Up Report invites people from all walks of life and influence to help re-imagine banking by sharing their opinions and ideas on how things could be done, better. The most popular will be consolidated into the fully crowd-sourced Speak Up Report and delivered to key policy-makers during Budget month to help stimulate change on the ground.
“Speak Up creates an opportunity for people to have their say about banking – and to be listened to. It’s not just a platform to whinge about common frustrations either, although these certainly still exist. Rather it’s about asking what South Africans think banks could do to make things easier, more efficient and more consumer-friendly,” explains Charl Nel, Capitec Bank’s head of strategic communications.
“The desired outcome of Speak Up is that the everyday South Africans’ opinions and ideas will be taken into consideration by those in power. You never know, maybe the finance minister will even take notice – he did after all call on banks to change their ways in his National Budget Speech last year, although the status quo has improved only incrementally since then,” says Nel.
To have your say and participate in the Report, visit the Speak Up tab http://www.facebook.com/CapitecBank before 16 February 2012. Results will be made public on 26 February on http://www.facebook.com/CapitecBank, under a results tab.
by TMO Reporter
9 February 2012
http://themediaonline.co.za
“Speak Up creates an opportunity for people to have their say about banking – and to be listened to. It’s not just a platform to whinge about common frustrations either, although these certainly still exist. Rather it’s about asking what South Africans think banks could do to make things easier, more efficient and more consumer-friendly,” explains Charl Nel, Capitec Bank’s head of strategic communications.
“The desired outcome of Speak Up is that the everyday South Africans’ opinions and ideas will be taken into consideration by those in power. You never know, maybe the finance minister will even take notice – he did after all call on banks to change their ways in his National Budget Speech last year, although the status quo has improved only incrementally since then,” says Nel.
To have your say and participate in the Report, visit the Speak Up tab http://www.facebook.com/CapitecBank before 16 February 2012. Results will be made public on 26 February on http://www.facebook.com/CapitecBank, under a results tab.
by TMO Reporter
9 February 2012
http://themediaonline.co.za
Wednesday 01 February 2012
Absa introduces entry-level bank account
The country's biggest retail bank, Absa took a significant step towards simplified, affordable banking on Tuesday with the launch of Transact.
Aimed at customers who are looking for a basic transactional account which is easy to understand and very cost effective, Transact simplifies mainstream banking by offering a full bouquet of services.
"The key advantage of Transact is in its simplicity and affordability. Transact customers will pay no monthly service fees, no Absa ATM balance enquiry fees, no fees when purchasing at till points, no fees on airtime top-ups and no penalty fees," said Arrie Rautenbach, Head: Retail Markets at Absa.
"Transactions will be charged on a pay as you transact basis and will be extremely easy to understand. Till point withdrawals are R1.00 per transaction, electronic payments and debit orders are R2.85 and an Absa ATM cash withdrawal will cost R3.85. Depending on a person's banking behaviour, charges will be very affordable," explained Rautenbach.
"We've essentially taken banking services that are important to our entry level customers, packaged those services and created the Transact product which, on many accounts, is the most affordable of its kind."
The compelling product was tailored with the country's low income earning citizens in mind. "Government has made no secret of the fact that more needs to be done to bring people into formal banking. Absa is determined to play its part in this national imperative, and Transact will certainly help us bank more South Africans," added Rautenbach.
Backed by Absa's extensive network, the product will be available at 748 Absa branches and customers will have access to more than 8,000 Absa ATMs.
Furthermore, Cellphone banking will be free for Transact customers thereby providing the benefit of electronic banking, increased safety and convenience at no additional charge. Cash and till withdrawals, balance enquiries, statements, debit orders, point-of-sale (POS) purchases, mobile banking and ATM payments and transfers also form part of the offer to customers.
http://www.businesslive.co.za
Aimed at customers who are looking for a basic transactional account which is easy to understand and very cost effective, Transact simplifies mainstream banking by offering a full bouquet of services.
"The key advantage of Transact is in its simplicity and affordability. Transact customers will pay no monthly service fees, no Absa ATM balance enquiry fees, no fees when purchasing at till points, no fees on airtime top-ups and no penalty fees," said Arrie Rautenbach, Head: Retail Markets at Absa.
"Transactions will be charged on a pay as you transact basis and will be extremely easy to understand. Till point withdrawals are R1.00 per transaction, electronic payments and debit orders are R2.85 and an Absa ATM cash withdrawal will cost R3.85. Depending on a person's banking behaviour, charges will be very affordable," explained Rautenbach.
"We've essentially taken banking services that are important to our entry level customers, packaged those services and created the Transact product which, on many accounts, is the most affordable of its kind."
The compelling product was tailored with the country's low income earning citizens in mind. "Government has made no secret of the fact that more needs to be done to bring people into formal banking. Absa is determined to play its part in this national imperative, and Transact will certainly help us bank more South Africans," added Rautenbach.
Backed by Absa's extensive network, the product will be available at 748 Absa branches and customers will have access to more than 8,000 Absa ATMs.
Furthermore, Cellphone banking will be free for Transact customers thereby providing the benefit of electronic banking, increased safety and convenience at no additional charge. Cash and till withdrawals, balance enquiries, statements, debit orders, point-of-sale (POS) purchases, mobile banking and ATM payments and transfers also form part of the offer to customers.
http://www.businesslive.co.za
Wealthy but disgruntled customers
Capitec hopes to lure fed-up customers from big four banks, writes Sure Kamhunga
SURE KAMHUNGA
Published: 2012/01/31 08:52:11 AM
THERE is a saying that the best way to eat an elephant is one bite at a time, which best describes the strategy being used by Capitec Bank to chip away at the edges of the big four banks’ retail market share.
Capitec is making good on its promise to give the big four a run for their money in the fight for retail customers.
Not only is Capitec consolidating in its dominant entry-level segment, but it is now increasingly encroaching into the middle-to upper-income market where it is undaunted by the lack of some of the value-add products that wealthier clients usually associate with a high street bank. For a start, Capitec is opening branches in some of the affluent areas where it is under-represented, compared to the big banks which are entrenched.
The hope is that it will lure customers from the big banks whose patience has been worn thin by sloppy service and high charges. It is also offering comparatively higher deposit rates than those marketed by rivals.
"I think they can win in terms of their simple product offering and attractive interest rates," says Avior Research analyst Harry Botha.
But he cautions that Capitec might struggle to gain customers in the upper-income segment where the big banks have always been comparatively better placed to offer long-term products such as home and vehicle loans.
Capitec CEO Riaan Stassen is modest about the progress the bank has made, pointing out that banking is a marathon rather than a sprint to become market leader.
Capitec, so far, has about 3,5-million customers, the bulk of them in the middle-to lower-income segment, and is adding up to 100000 a month. Analysts say these are not entirely new customers as there is already a lot of cannibalisation in the banking sector, where banks and other credit providers such as microlenders are grabbing customers from each other.
"SA is such a multi-banked market that sometimes you wonder about the accuracy of the customer numbers published by banks, or more precisely, which of these accounts are actually active," says an executive at a rival bank.
Capitec’s strength, so far, has been its dominance in the middle-to lower-income market where the big banks have always been active, but are now intensifying their fight for more customers.
Mr Stassen appears unmoved with this activity by the big banks, believing in the power of Capitec’s brand and the financial support it is receiving from shareholders. These include controlling owner PSG Group — with a stake of about 34,6% — whose CEO Piet Mouton recently told Business Day he expects Capitec to continue to stay "ahead of the curve" and keep a gap between itself and its rivals.
PSG last year supported Capitec’s rights issue when it raised more than R1bn, and also threw its weight behind a decision to issue shares to raise nearly R800m, mostly from institutional investors. The bulk of the funds are for branch expansion and the rest is to strengthen its core tier 1 capital under Basel 3 rules.
Capitec’s strategy is to gain access to longer-term capital to match the extended tenure of its unsecured loans which can now be repaid over up to 60 months.
The bank is expanding its national footprint based on a new "designer" branch that was launched last week, and plans eventually to add 200 branches to the existing network of 500 in the next three years.
Capitec’s expansion — including adding more staff — will put pressure on its cost-to-income ratio, says Mr Botha.
"They announced two to three years ago that they will be building more branches and we are seeing it coming through their high cost-to-income ratio, which is higher relative to their (peer group which includes) African Bank," he says.
Analysts also caution that Capitec might battle to entrench itself in the middle-to upper-income segment in the same way it has succeeded in its core market.
"We must remember that some of these customers have built over time relationships and also have other benefits such as car and housing finance which Capitec Bank does not offer, and this is a major weakness it faces," says another analyst.
Capitec has, however, announced plans to launch its own credit card.
As it expands, it is safe to say only time will tell if the elephant will eventually be consumed.
http://www.businessday.co.za/
SURE KAMHUNGA
Published: 2012/01/31 08:52:11 AM
THERE is a saying that the best way to eat an elephant is one bite at a time, which best describes the strategy being used by Capitec Bank to chip away at the edges of the big four banks’ retail market share.
Capitec is making good on its promise to give the big four a run for their money in the fight for retail customers.
Not only is Capitec consolidating in its dominant entry-level segment, but it is now increasingly encroaching into the middle-to upper-income market where it is undaunted by the lack of some of the value-add products that wealthier clients usually associate with a high street bank. For a start, Capitec is opening branches in some of the affluent areas where it is under-represented, compared to the big banks which are entrenched.
The hope is that it will lure customers from the big banks whose patience has been worn thin by sloppy service and high charges. It is also offering comparatively higher deposit rates than those marketed by rivals.
"I think they can win in terms of their simple product offering and attractive interest rates," says Avior Research analyst Harry Botha.
But he cautions that Capitec might struggle to gain customers in the upper-income segment where the big banks have always been comparatively better placed to offer long-term products such as home and vehicle loans.
Capitec CEO Riaan Stassen is modest about the progress the bank has made, pointing out that banking is a marathon rather than a sprint to become market leader.
Capitec, so far, has about 3,5-million customers, the bulk of them in the middle-to lower-income segment, and is adding up to 100000 a month. Analysts say these are not entirely new customers as there is already a lot of cannibalisation in the banking sector, where banks and other credit providers such as microlenders are grabbing customers from each other.
"SA is such a multi-banked market that sometimes you wonder about the accuracy of the customer numbers published by banks, or more precisely, which of these accounts are actually active," says an executive at a rival bank.
Capitec’s strength, so far, has been its dominance in the middle-to lower-income market where the big banks have always been active, but are now intensifying their fight for more customers.
Mr Stassen appears unmoved with this activity by the big banks, believing in the power of Capitec’s brand and the financial support it is receiving from shareholders. These include controlling owner PSG Group — with a stake of about 34,6% — whose CEO Piet Mouton recently told Business Day he expects Capitec to continue to stay "ahead of the curve" and keep a gap between itself and its rivals.
PSG last year supported Capitec’s rights issue when it raised more than R1bn, and also threw its weight behind a decision to issue shares to raise nearly R800m, mostly from institutional investors. The bulk of the funds are for branch expansion and the rest is to strengthen its core tier 1 capital under Basel 3 rules.
Capitec’s strategy is to gain access to longer-term capital to match the extended tenure of its unsecured loans which can now be repaid over up to 60 months.
The bank is expanding its national footprint based on a new "designer" branch that was launched last week, and plans eventually to add 200 branches to the existing network of 500 in the next three years.
Capitec’s expansion — including adding more staff — will put pressure on its cost-to-income ratio, says Mr Botha.
"They announced two to three years ago that they will be building more branches and we are seeing it coming through their high cost-to-income ratio, which is higher relative to their (peer group which includes) African Bank," he says.
Analysts also caution that Capitec might battle to entrench itself in the middle-to upper-income segment in the same way it has succeeded in its core market.
"We must remember that some of these customers have built over time relationships and also have other benefits such as car and housing finance which Capitec Bank does not offer, and this is a major weakness it faces," says another analyst.
Capitec has, however, announced plans to launch its own credit card.
As it expands, it is safe to say only time will tell if the elephant will eventually be consumed.
http://www.businessday.co.za/
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