Banking industry on track to meeting transformation goals
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The Banking Association of South Africa this week released its latest Transformation in Banking Report, which measures the progress the banking industry has made towards meeting internal transformation targets as set out in the Financial Sector Code, as well as its progress in supporting black-owned businesses, black property ownership and financial inclusion.
The report, by financial research company Intellidex, covered the years 2016 to 2018.
It showed that, by and large, the industry was on track with its ownership, directorship and management transformation goals.
On financial inclusion, the survey measured penetration into low-income markets through physical access, electronic access, and the uptake of products specifically geared for this market. It showed that in this area, “banks were shifting from looking at transformation as a compliance issue to viewing it as a catalyst for growth”.
Transaction points are points at which customers can withdraw cash or make a purchase; service points are where customers can reset a pin, execute money transfers, obtain a statement or initiate account queries; and sales points are where customers can replace a card, deposit cash, open an account, or get a loan or funeral policy.
The survey found that, on transaction points, market penetration between 2016 and 2018 had dropped slightly, from 84% to 82% (the target being 85%). Service points had dropped from 84% in 2016 to 79% in 2018, although this was still well above the target of 70%. Sales point penetration had risen slightly, from 78% to 80%, well above the target of 60%.
On access to electronic services (internet, cellphone and telephonic banking, offering access to electronic products and/or applications, for account holders earning less than R5 000 a month), there was wide variance across the banks in terms of market penetration.
In 2018, Capitec had a high penetration of 91%, FNB was 48%, Standard Bank 18% (down from 30% in 2017), Absa 11.7%, and Nedbank a mere 6% (down from 19% in 2016).
Banks remain ahead of targets on the number of active accounts for qualifying products: in 2018 there were 16.33 million accounts - more than three million above the target of 13 million.
Bank spending on consumer education initiatives increased by 24% between 2017 and 2018, from R145.5 million to R180.1m.