According to Thinkmoney.co.za, South Africa’s leading financial comparison website, 37% of consumers say they would not switch their current account provider, even for a cheaper account or for better service. The research conducted by Thinkmoney.co.za indicates that these consumers would remain loyal to their banks, regardless of changing personal or market circumstances, even if it meant they were not getting the best deal.

However, 35% of South Africans said they would consider changing their current account in order to save on bank charges, 17% would change for better service and 11% for improved product features such as internet or telephone banking facilities.

With so many great new offers on the market, one would expect a significant amount of switching between banks. But Mike Kann, General Manager of Thinkmoney.co.za, explains that this is not the case.

The problem is the high personal cost involved in switching bank accounts. A lot of Thinkmoney.co.za users express a keen interest in switching banks, but when confronted with the hassle of transferring payments and debit orders they are simply put off.”

Comparisons conducted using the unique Thinkmoney.co.za calculators identify Capitec as the current account with the lowest average cost per month (R4* per month). However Capitec has limited internet and branch banking facilities, which may dissuade many potential customers. On the other hand, its low fees and high savings rate of up to 11.5% should encourage consumers to consider switching.

FNB’s new Unlimited current account option has one of the lowest minimum monthly charges of R66, which includes all electronic transactions on the FNB network for free. However, should one use another bank’s ATM, a hefty R25 per transaction will be levied. Overall, this still represents one of the cheaper big bank options, available with an average all-in cost of R91* per month.

The Sanlam Liquid current account, although limited by the fact that it has no overdraft facility, has by far the highest savings rate – currently 11.69%** on any balance. This is a relatively new product on the market, which has been very well received by South African consumers and is rated one of South Africa’s five cheapest current accounts, at an average cost of R63* per month.

Kann continues that while competition is heating up in the current account market, the big banks are not yet adjusting their offerings to compete with these new products.

South Africa has not yet reached a critical mass of consumers proactively switching from the big banks to better priced alternatives. We believe this is because of years of apathy towards bank charges, linked to the fact that it has been almost impossible to compare such charges.”

A sad example of this is the recent demise of Go Banking. The Go Account was a great example of a very well priced banking product not attracting the amount of market share it needed to continue as an independent offering.”

With the launch of Thinkmoney.co.za and similar websites in South Africa, consumers have been empowered to compare and switch banks.

With more and more consumers using tools like Thinkmoney.co.za and beginning to switch to better priced alternatives, Kann feels it is only a matter of a few years until we reach a point that the big banks are forced to drop prices in order to retain market share.

*This is calculated by averaging the current account usage profiles of Thinkmoney members and includes both bank charges and interest.** Average over the last 30 days

About Thinkmoney.co.za

Thinkmoney.co.za is an online independent financial comparison website. The site compares a range of financial products including personal banking and loan products as well as insurance and medical aid. In addition the site provides the functionality to directly apply for products. What differentiates Thinkmoney.co.za from similar websites is that comparisons are based on price as well as consumer feedback relating to service. A host of unique independently built tools and calculators empower consumers to find the right products that suit their needs. Thinkmoney.co.za is a free service.

For more information

Contact: Mike Kann
Tel: 076 257 3112
Email: mike@thinkmoney.co.za

Author's Bio: 

Mike Kann is the General Manager of www.thinkmoney.co.za