Research by FinMark Trust shows that of the 4.33-million Mzansi accounts opened since 2004, more than three million accounts remain active. As a result Mzansi has increased the percentage of banked South Africans from 45% to 63% with the potential of reaching 78% of South Africans.
Of the 72% of people who had never had a bank account before, 7% of them have by now migrated upward into the mass-market products of the individual banks. That equates to about 400 000 people the banks would not have tapped for their own bank accounts without the Mzansi initiative.
It is this migration of customers from Mzansi accounts into branded banking products that may ensure that it remains a vestige of the financial sector charter, especially for those banks that want to increase their mass-market footprint.
According to head of transactional products at Nedbank, Bryan McLachlan, the bank’s sales of Mzansi are higher this year than they were in the same period last year.
Nedbank, with Postbank, have successfully used Mzansi as a way to grow their mass market. Nedbank was behind its three competitors in terms of entering the mass market and therefore focused its efforts on Mzansi with aggressive pricing. It was one of the two big banks to exceed its targets in respect of Mzansi and was responsible for a third of Mzansi accounts opened. PostBank has been responsible for 50% of the Mzansi market.
Nedbank has 1.25-millionMzansi account holders, 950 000 of which are active. This is substantially higher than the other banks; Standard Bank has 817 300 Mzansi customers and Absa has just over 500 000 active account holders.
Absa confirmed that it would continue to deliver banking to the unbanked through Mzansi, but Mzansi forms only a part of a suite of products and services designed to address the needs of this market. Absa views the Mzansi initiative as a success as it enabled the bank to enter new markets, while affording the unbanked the opportunity to gain access to financial services.
Standard Bank, like Absa, sees Mzansi as only one of several options. It says that it will continue to offer the Mzansi product to entry-level customers but it wants to develop alternative propositions to serve this market better. It sees Mzansi as a success because it enabled the bank to meet its access targets and provide a greater percentage of the population with access to banking. However, it found that little migration to branded products took place.
Although Nedbank has seen the migration of Mzansi customers to its branded accounts, it is the only bank that has removed the high transaction penalty fee from the Mzansi account so there is no need for customers to migrate to other products once they require more transactions from their banking account.
Mzansi account holders do not pay a Saswitch charge when they use other banks’ ATMs. The Banking Association confirmed that this would continue and it appears that it is here to stay.
The extent of its success will depend on the individual banks’ strategies for tapping into the unbanked market, with some banks making more use of the Mzansi brand than others.