Excerpt. Studies like this one from Solidarity we welcome.’
Thanks
Moneyweb
ALEC HOGG: FNB came out as easily the cheapest choice of the big four banks in trade union Solidarity's exhaustive investigation into bank charges that was released yesterday. Dave, what's your bank? Who do you deal with?
DAVID SHAPIRO: Standard Bank.
ALEC HOGG: So you are paying the most?
DAVID SHAPIRO: I pay the most.
ALEC HOGG: Are you getting value for money, though?
DAVID SHAPIRO: They never go down.
ALEC HOGG: Well, I asked James Fowle, who's looking for your account, David, he's the man who drives FNB's pricing, why his bank hasn't been telling the world that its fees are virtually half those of competitors Standard Bank and Absa.
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james fowle: Look, we'd love to put on adverts like that - we do advertise our products and the pricing, but comparative advertising isn't allowed in South Africa currently and that's why studies like this one from Solidarity, we welcome. I think it's good for people to see a well put together analysis of bank charges and be able to read a summary page that really does tell them, in a nutshell, what the answer is without them having to go and visit five banks and put it all together themselves.
ALEC HOGG: So this is a well-done survey. There was one that Finance Week did a while ago that evoked a lot of criticism.
james fowle: Look, we criticised the FinWeek one in the past, not due to methodology but because anything of this type requires some sort of assumption as to how people transact. And the FinWeek survey previously, prior to 2010, looked at a family who transacted very inefficiently. They drew cash in branches, made deposits in branches. It wasn't sensible behaviour, and over a number of years we said this to FinWeek and this year they acknowledged that and they changed the transaction profile to look more like what most of our customers are. And that's transacting electronically most of the time and, on exception, if you're buying or selling a car and you're having to pay a lot of cash or deposit cash, that's when we'd expect someone to use a branch for cash. The ATMs are there for the other times.
So FinWeek changed their methodology this year and we saw all the bank fees come down, but particularly at FNB, where our pricing and our pricing options are geared around encouraging customers to use those channels and, like this unlimited option where you pay a fixed monthly fee for unlimited transactions as long as you use those electronic channels. It is how our customers transact, and hence we've seen, with the more realistic transaction bundle, FNB coming out I think in the spot that we deserve.
alec hogg: How easy is it to switch bank accounts?
james fowle: I think easier than people's perception of it. At FNB we offer switching services to assist customers in moving banks, so when you come to us you don't have to come into a branch at all. You can open your account on line, we'll courier the cards to you and we'll switch the debit orders, which is probably the biggest hassle that people try and avoid - and we offer that service. So we'll ask you to sign a mandate, give us your old bank statements, and we've got the process set up. We'll phone your cellphone service provider and - based on your mandate - get them to change your debit order and you don't have to do it. And we keep in touch with the customer throughout that process, letting him know which debit orders have been switched, which ones haven't, how much money they should probably put in their account this month, based on the debit orders that have come in - helping them to move.
alec hogg: So it seems to me that it's not that difficult to move accounts, and clearly FNB came out in this survey - and it was a comprehensive survey as you've pointed out a moment ago - and, Dirk Herman told us yesterday, very much cheaper than others. Why are you not having a flood of people from Standard Bank and Absa in particular?
james fowle: I think it's perception and apathy. A lot of people complain about bank charges, but they don't really know what they pay, they haven't compared banks since they first opened a bank account, and they'll read the first few lines of an article like this and just say "they're all the same and they're all ripping us off". But, as we've seen from this, there are vast differences in what you can pay for pretty much the same transactions at different institutions, and it is worth shopping around. And I don't think it's true to say any more that we aren't seeing customers - we're seeing a significant number of customers coming to FNB, starting to realise that there is great value for money. The pricing is low and there are great benefits.
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ALEC HOGG: David, it's interesting - give credit where it's due. FNB have been focusing on that and they haven't been able to go out and advertise it, which is interesting, so they've been waiting for someone like Solidarity to come and do the advertising for them.
DAVID SHAPIRO: Ja, it's interesting. A lot of shoppers will compare Pick n Pay and Shoprite and so on, and you'll quickly go and change. I suppose changing banks is a lot more difficult, but...
ALEC HOGG: James says it's nothing. He says it's easy. You come in there, you just sign a couple of forms and away you go.
DAVID SHAPIRO: We used to be loyal to our banks because you used to go up to the teller and you knew the teller. Today it's all internet banking.
ALEC HOGG: Well, when last were you in a bank?
DAVID SHAPIRO: I don't even know - my bank branch is Braamfontein. I wouldn't know where to find it!
ALEC HOGG: I bank with Investec, and we don't have branches....
DAVID SHAPIRO: I haven't written a cheque for years.
ALEC HOGG: This was quite a lengthy conversation that we had, and the podcast is up on Moneyweb. He said only 5% of their clients at FNB have got cheque books. Can you believe that? One in 20. And he says primarily the older fellows. So - I'm surprised you haven't got a cheque, Dave! And they only use cheques very sporadically or very rarely - even people of your age group.
DAVID SHAPIRO: I do have a cheque book, only because there are certain places like if you pay your licence...
ALEC HOGG: You pay your traffic fine...
DAVID SHAPIRO: No, no, I do online traffic fines - and we amass a lot!
ALEC HOGG: Of traffic fines. Well, you want to drive a windgat car like a Mini!
