‘Market forces, rather than social factors and regulation, will
continue to drive the market. Ultimately this will be beneficial for
South Africans.’
Sykes maintains that the market will become more aspirational
and could even have a positive social impact. Certain sectors of
employment could become more attractive than in the past, because of
the possibility of people occupying certain categories of employment
being regarded as better risks than others and benefitting from
differentially-priced products.
This pricing practice would broadly accord with the desired
outcomes of TCF regulations:
• customers must trust their financial service providers;
• products and services supplied are appropriate to consumers, and
• that transparency and discipline in the industry is enhanced.
Transparency and discipline – and the customer confidence that
comes with them – require oversight. Burra believes that: ‘The onus
is on government and pressure groups to keep banks accountable.
Where it is considered that price differentiation oversteps the
mark, the banks must be told so that they can adjust their
practices accordingly.’
Possible sanctions could include banks being required to lower
penalty fees on dishonoured debit orders, improving the management
of the current debit order system, greater transparency regarding
ATM fees and charges, the implementation of a standardised
switching code to promote ease of switching bank accounts between
banks, and improving customer education,’ says Burra.
As the Banking Association’s Stuart Grobler points out, the
challenge is that TCF regulations are outcomes-based as opposed to
rules-based, making them difficult to implement in law. ■
Edition 2
THE BANKER
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