Capitec CEO Riaan Stassen. Picture: Makwena Manamela
Capitec CEO Riaan Stassen. Picture: Makwena Manamela

CAPITEC offers the cheapest banking products, despite aggressive efforts by the traditional "big four" banks to lure customers away from the no-frills new entrant.

This is according to research by personal financial management platform Moneysmart. It measured the costs associated with a basic cheque account over a 12-month period, using a case study of a person earning R10000 a month.

Nedbank's Savvy account was the most expensive, levying R1606.80 in costs for the year.

FNB's costs for the year came to R1176, followed by Absa's silver cheque account at R1150.10 and Standard Bank at R1073.76.

Capitec's Global One account fee costs R750 a year.

Moneysmart CEO Tobie van Zyl said most banks required a person to be their primary client in order to open a cheque or current account. This means their monthly salary has be to deposited into a bank. By contrast, Capitec requires only a R25 minimum balance to open a Global One bank account.

Standard Bank's Achiever current account has the cheapest monthly administration fees, at R69, among the big four banks, whose fees range from R71 to R79. Capitec monthly fees are R4.50.

A recent study by Thinkmoney showed that service was the most important concern of customers when it came to their bank account. About 40% of those polled said it was the most important factor; 20% said internet banking was the thing they valued most about a bank account; and 17% said they wanted value for money.

Other research, by Ernst & Young, found that customers wanted lower costs, better service and greater personalisation and flexibility. It said customers were taking more control of their banking.

In response, banks are reconfiguring their business models to meet customer needs.

"Just as no two banks are exactly the same, there is no single strategic response that will suit every institution," said Ernst & Young.

Customers have become less loyal and many use more than one bank.

Those planning to switch banks have increased from 7% to 12% since last year. About 70% of customers who have switched banks cited high fees or charges as the main factor for doing so.

Finance Minister Pravin Gordhan met banking executives in August to discuss the positive role banks could play in meeting South Africa 's socioeconomic challenges - and how they can help contribute towards the National Development Plan. Gordhan has frequently voiced his displeasure about high banking fees.

Capitec CEO Riaan Stassen described the meeting with the minister as "an open and frank discussion". He said he hoped to meet the minister more regularly as "there is a lot to be discussed with the government".

* This article was first published in Sunday Times: Money & Careers