Research into Mzansi accounts shows that Absa is the most expensive bank, whereas both Capitec and Nedbank get the thumbs-up.
A study conducted by Eighty20 consulting on behalf of the FinMark Trust showed that the banks differed significantly on their Mzansi offerings, both in terms of pricing and service. Although this was a limited exercise and not a true sample of branch experiences, a lot can be learned about the attitude of a bank from the way it treats its least-wealthy clients.
Customers are thoroughly unaware of fees. Absa is the most expensive Mzansi account based on typical usage yet it has the most customers. Eighty percent of Mzansi customers believe that the fees are the same across the four banks, whereas 89% use branches rather than more cost-effective channels.
By using the most cost-effective channels at the most cost-effective bank, a customer would save R42 a month. When a bank has trained its staff to help its customers cut costs, it makes a significant difference. This was one of the reasons Nedbank came out as the most costeffective of the big four.
The researchers opened bank accounts and transacted according to the typical banking behaviour of an Mzansi customer. When they tried to transfer R20 at a Nedbank branch, they were told by the teller that it would cost R30 and that a far cheaper option would be the self-service terminal (R2.40), and they received assistance from bank staff.
Absa on the other hand carried out the branch transaction at a cost of R17. The Nedbank account holders also received regular SMS banking tips on how to transact effectively. But opening a bank account was a different story: none of the banks explained the fees to the customer.
The researchers say that pricing is generally difficult to understand even for financially literate people. Pricing given on banks’ websites differs from that given in brochures and in some cases the actual fees charged have no relation to the published fees.
There are major differences regarding penalty fees. The book, Portfolios of the Poor: How the World’s Poor Live on $2 a Day, shows that people with erratic incomes use more transactions to manage their cash flow, yet the banks limit these transactions to between eight and 10 a month and the penalties are severe.
Absa charges a R12 penalty in addition to the transaction cost; FNB charges an additional R8; and Standard Bank doubles the transaction fee. This is something the banks need to review urgently. Although they are trying to prevent higher-income earners from using this low-cost account, they already include a maximum balance on the account.
Banks should rather focus on educating their customers on how to use more cost-effective channels than limiting transactions.