Standard Bank has announced a new fee structure, promising customers could save up to 50% or more on banking fees.
Standard Bank announced a new fee structure on Thursday, promising customers could save up to 50% or more on banking fees.
It claimed its new bundle initiative would make it the most competitive bank in South Africa.
The bank gained 1.3-million new customers last year and hoped lower fees, which will come into effect on 2 April, will draw in even more customers and transactions. And competition is fierce: “As the market changes, we are changing with it,” said Peter Schlebusch, CEO of Personal and Business Banking at Standard Bank.
The offering targets personal current account holders which make up 1.5-million of the Bank’s total 10-million customers.
Standard Bank’s current products in this market start from Achiever Go at R95 per month and climb up to private banking at R285.
The new product range starts with the Access account, for which one may either pay no monthly fee, and pay per transaction, or pay R30 per month for a bundle of transactions. On the other end of the spectrum clients may pay R285 again for private banking, with offerings such as more free transactions each month and unlimited electronic transactions (which include card swipes). Some bundles include credit card fees, while prestige and private banking bundles include a personal banker.
For the AccessAccount, the payment option is either no monthly management fee, and you only pay per transaction, or you can pay R30 for a bundle of transactions.
Standard Bank said their offering may be the best in the market.
But how does prices compare? Schlebusch and his team compared Standard Bank’s offering with three similar price plans from other banks.
Schlebusch claimed their packages were either cheaper or offered more value for money. Other banks, he said, did not include credit card fees in their product offerings.
“They will have to lower their prices or increase their offering in order to compete.”
He said the bank hoped the incentives would attract new customers so it is unclear how the new fees would affect Standard Bank’s revenue.
Existing customers will find their bundle fees automatically revised from April 2.
The statutory pressure over recent years for banks to lower rates and move towards financial inclusion was a factor in Standard Bank’s latest move. Schlebusch noted the financial institution had already made several strides since the creation of the consumer commission.
Standard Bank said changes began in 2008 with various pricing elements such as continuous below inflation increases on fees; various free transactions at ATMs on numerous products; significant reduction in penalty fees; a cap on penalty fees on rejected debit orders for Eplan and Mzansi customers; discontinuation of the declined cash withdrawl penalty fee and; free balance enquiries at ATMs and on cellphone banking.
But essentially it’s more about pleasing the modern-day customer, the bank said. “The consumer is more informed and more demanding. They are asking for simpler products and more transparent pricing.”
Customers, he said, are moving toward a preference for self-service channels as it makes them feel empowered.
Schlebusch said customer reward schemes would also be announced in the course of the year. “We are trying to come up with something sensible and cost effective that resonates with customers.”