Credit card initiatives and product innovations — many related to pricing — are about to be spawned in the marketplace as a direct result of the challenges the National Credit Act (NCA) originally posed to the banking fraternity.
Barrett Whiteford, head of marketing for FNB Credit Card, says: “We’ve adjusted all our processes and procedures to comply with the Act — not that we didn’t do so before, but they have become more structured.
“We’ve seen it as an opportunity to change our processes and in July we’ll be launching a host of initiatives based the NCA process. What compounded the NCA problem was the change in the credit cycle. We had more issues with [that] than with the National Credit Act.”
Barrett says there is a perception that the introduction of the NCA in South Africa was not handled as well as it should have been; consumers didn’t know what the real effect would be and what the objectives were, “so we spent much of our time trying to educate customers about the ramifications. The perception among many customers was that with the NCA they were going to be better off and would not have to honour their debt obligations, which we all know is not correct.
“We went through those teething problems, but internally the NCA is something that is part of everyday life now — and we’ve seen the silver lining in the whole process and we believe it’s a good thing that the customer gets an opportunity to stack up all the offers against one another in terms of the quoting process.
“We have spent a lot of time and effort making sure that we use the new process in a way that benefits our customers. We’ll soon have new streamlined systems in place that will work hand in hand with the NCA.
“We’ve looked at the principles of the NCA in terms of affordability risk profiles and we are going to offer a more personalised approach in terms of pricing and interest rates, based on those factors,” says Whiteford.