How our re­search was con­ducted

Finweek English Edition - - Cover -

SOUTH AFRICA’S BIG FOUR banks will crit­i­cise our re­search. They will ques­tion its method­ol­ogy. They’ll chal­lenge the as­sump­tions. They’ll ar­gue their av­er­age client doesn’t bank in the way our ill-in­formed fic­tional fam­ily does. Be­sides, who ac­tu­ally uses cheques nowa­days? Some may even take out ad­ver­tis­ing cam­paigns to try to mit­i­gate any dam­age our find­ings cause. We know that be­cause it’s what they’ve done fol­low­ing our pre­vi­ous pub­lished re­search over the years.

Each one of us banks dif­fer­ently. We have dif­fer­ent needs and re­quire­ments. How many of us ac­tu­ally know what we pay our bank for its ser­vices? Un­less you pay a monthly flat fee to your bank, you prob­a­bly don’t have an ac­cu­rate idea of what the nu­mer­ous charges on your bank state­ment rep­re­sent.

Even if you do pay a flat fee, you have no idea what each trans­ac­tion costs and whether you in fact get value for money. In one month you may use all the trans­ac­tions in the bun­dle you pay for and the next you may use only half of them. You’ll only no­tice ex­tra charges if you carry out trans­ac­tions out­side the reg­u­lar am­bit of what you do in a nor­mal month.

You cer­tainly don’t know what makes up any one of the myr­iad of charges and how the banks get to the fig­ure levied on you.

In or­der to be con­sis­tent we’ve main­tained the same methodol- ogy em­ployed in our first re­search project in 2005. We want to en­sure we’re able to pro­vide com­pa­ra­ble sta­tis­tics. We re­lied on the pro­fes­sional abil­ity of one of Jo­han­nes­burg’s most re­spected au­dit and foren­sics firms to con­duct the work, us­ing only the in­for­ma­tion that we, as clients, can ac­cess. If they made an er­ror, we sus­pect many of us would also have made at least the same mis­take.

We stip­u­lated that our fam­ily should op­er­ate: • Two cur­rent ac­counts, with one debit card on each ac­count, each with an over­draft fa­cil­ity of R10 000, with an an­nual card pro­tec­tion fee. • Each ac­count should also have

a cheque­book. • Two garage cards, with

card pro­tec­tion fees. • Two credit cards, with

card pro­tec­tion fees. • One In­ter­net bank­ing

ac­count. • Mort­gage debt of

R500 000. • Two car loans of R150 000 each. All cards and ac­counts were to be held at the same bank.

We then as­sumed a se­ries of trans­ac­tions a typ­i­cal fam­ily might carry out each month and in­structed Deloitte to price the ac­tiv­i­ties across the banks.

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