Make it easier to switch banks
9 July 2007
Potential banking clients should be verified at an industry level, and not at the individual bank, Nebank has said at the public hearing of the Competition Commission into bank fees on Monday.
According to Nedbank Retail MD Rob Shuter, it is tough for clients to switch banks due to the complicated Fica process, which is onerous for clients, Nedbank said in a statement. As a result, the bank proposes the introduction of a centralised Fica repository that would allow for verification at an industry level.
According to Shuter, "In other words, once clients have completed a Fica process at one bank, the data could be logged in a central repository so that they would not need to repeat the process if they decided to switch their account to another bank.”
Shuter also endorsed the proposal by the Competition Commission Enquiry's Technical Team to introduce a switching code that would make it easier for clients to switch banks.
The introduction of a switching code would provide a set of standard processes and guidelines for banks to follow when a client wishes to switch banks. "A similar approach has been suggested in other countries," he said.
Shuter added that Nedbank faces “intense competition, not only from bigger banks but also from new entrants, including niche banks and retailers. Consumers have more choice than ever before and there is no doubt that competitive forces have had a strong hand in reshaping our business.”
He made specific reference of Nedbank’s move from catering for a more affluent market to a lower-pricing strategy, which “needed to change if we wanted to improve our relevance and appeal”. Included in Nedbank's recommendations is the adoption of common terminology by banks to describe products and fees, making it easier for consumers to make comparisons across banks.
"In the same spirit, we recommend that a standard level of disclosure be applied whenever price comparisons are used in the public domain," Shuter said.
This is a different calculator from that proposed some time ago by the Banking Association and would enable clients to compare what they would pay at the different banks for their own preferred basket of transactions.