Johannesburg - Capitec remains the cheapest option for most banking clients but Absa and FNB also offer cheap accounts, according to the latest bank charges report compiled by trade union Solidarity.
The report also reveals that the charges on the cheapest mainstream accounts of four of the five large commercial banks have remained virtually unchanged over the past year. “Standard Bank was the only significant exception, as the bank closed its most competitive mainstream account for new clients after just one year.”
Paul Joubert, a senior researcher at the Solidarity Research Institute, said that in last year’s survey Standard Bank’s Achiever Electronic account could compete well with the other banks’ bundled accounts. “Standard Bank’s decision to do away with this account resulted in the bank’s Elite Plus account now being the most expensive of the five banks’ cheapest mainstream accounts.”
The report notes that generally customers who are dissatisfied with the prices or quality of a service they receive will usually transfer their custom to other providers. “Yet people do not easily switch bank accounts. Switching bank accounts is regarded as being difficult, cumbersome, confusing and time-consuming,” it noted.
The report added that, despite intensive advertising by the banks that they would assist new clients to switch, few clients seemed persuaded so “bank clients simply continue to pay the charges”.
Solidarity’s research is intended to assist bank clients in identifying the cost of the various packages offered by the big banks.
The report highlights the continued impact that Capitec, a comparative newcomer, is having on the market. It notes that all of the “big four” banks have introduced new accounts aimed at low-income individuals in response to Capitec’s success in this market segment.
Earlier this year Capitec overtook Nedbank as the fourth-largest bank by market share. Capitec had managed to increase its market share to 10.8 percent from 7.9 percent between January and December 2012. Over the same period Nedbank’s market share eased back to 10.7 percent from 11 percent. Ironically, given Solidarity’s findings, Standard Bank saw a slight increase to 23.9 percent, from 23.5 percent, while FNB’s share was down to 25.2 percent from 25.6 percent.
In its latest survey Solidarity notes that, until this year, none of the four majors had been able to compete on cost with Capitec on this level.
“FNB, however, significantly decreased fees on its EasyAccount this year and this account is now able to beat Capitec on cost for the first time.”
A troubling development referred to by Solidarity is the move by most of the banks towards “bundle accounts”, at the expense of pay-as-you-transact (Payt) accounts, which Joubert says is limiting clients’ choices. “At the big four banks the fees of each individual transaction on the Payt accounts have become so high that clients are in effect forced to open bundle accounts.”
A spokesman for Capitec said the bank was pleased that independent research had confirmed its belief that it offered the “best valued banking solution”.
Arrie Rautenbach, the head of retail banking at Absa, expressed delight at the results of the survey. “It is clear our strategy to ensure simplicity and transparency in our offerings and pricing structures is paying off.”
Jo-Anne du Plessis, head of pricing at FNB core banking solutions, said she welcomed and fully supported independent pricing studies and encouraged customers to be aware of pricing options. She added that bank customers should also be aware of non-price offerings.
Nedbank and Standard Bank said they were still considering the contents of the report. - Business Report