South African banks expect further demands for increased transparency, similar to those overseas, on pricing and product comparisons, a PricewaterhouseCoopers survey on banking in South Africa shows.
The Strategic and Emerging Issues in South African Banking survey also shows that banks operating in South Africa highlighted the changing regulatory environment as one of the most important developments in the banking landscape and their view is that new regulatory requirements will continue to proliferate the financial services sector.
A majority of the banks surveyed also predicted demands for increased transparency, similar to those overseas, on pricing and product comparisons.
Such a study was announced for the United Kingdom by the Office of Fair Trading in March this year.
A landmark development is the Competition Commission’s inquiry into competition in retail banking and the national payment system. The consensus is that the inquiry will lead to greater transparency and itemised pricing together with more regulation, both external as well as self-regulation, the survey notes.
Another challenge is the National Credit Act, of which the main requirements came into effect on June 1. Banks have cited the most pronounced impact of this new legislation will be on compliance costs, legal costs, and lending and credit extension, with many unknowns still to be addressed.
Banks also face the implementation requirements of Basel II, effective on January 1 next year, indicating they have made sound and steady progress in this regard, with the smaller local banks concerned with the significant resources that need to be devoted to the preparation process.
The banks also need to address continuously the Financial Sector Charter requirements, with compliance returns now having to be audited for the first time.
The survey has been developed by PricewaterhouseCoopers and researched and written by Dr Brian Metcalfe, associate professor in the Business School at Brock University, Ontario, Canada. It incorporates the viewpoints of 21 participants in the South African banking environment, both domestic (eight) and foreign owned (13). — I-Net Bridge