The so-called pricing war currently waging between the banks in South Africa has elicited much debate among all stakeholders in this vital financial services segment. A combination of challenging economic conditions, the recognition of the need to enable fully inclusive banking services and the entry of a swathe of new banking participants has created something of a “race for the pricing bottom” between the country's banks.
Nedbank is committed to ensuring fully inclusive access to banking by offering affordable bank accounts to its clients across all income levels, and is not willing to compromise value. As such, Nedbank deliberately avoids offering bank accounts that are designed to appeal to customers solely on the basis that they are cheap or free.
This value-adding requirement has the potential to put a low-cost or zero-fee bank account in something of a quandary if it isn't very carefully planned at the outset. That's because these accounts need to be able to deliver this value sustainably and indefinitely, without putting such pressure on the bank’s margins that it is forced to try to generate income down the line by passing on hidden costs to the customer.
Source: Financial Digest (financialdigest.net)
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