SA's financial watchdog to investigate fees charged by banks

The Money Show's Stephen Grootes is joined by Bank Zero co-founder Michael Jordaan and Kokkie Kooyman, executive director and portfolio manager at Denker Capital.

Are South Africans paying too much for banking in terms of the fees charged by local banks?

Well, the Financial Sector Conduct Authority (FSCA) is investigating the level of banking charges and also the level of transparency about them, the Finance Minister has confirmed.

Enoch Godongwana said in a written reply to a parliamentary question that the body's embarked on assessing the transactional fee practices across registered banks to determine whether further regulatory or policy interventions are required, reports BusinessLIVE.

EFF MP Omphile Maotwe had asked whether National Treasury was investigating 'exorbitant' bank charges. 

The FSCA will apparently be looking at the disparities in the fees charged by different banks and a lack of adequate disclosure by some banks of these fees.

Stephen Grootes talks to Bank Zero co-founder Michael Jordaan, who says these factors were a driving force for the launch of their bank.

In this day and age, says Jordaan, with all the new technology that's available, most bank fees are simply not necessary and their disclosure can be made much simpler as well.

"I do think the solution to this problem lies in regulating disclosure, disclosing everything that you charge customers and making sure they understand it. But, most importantly, actually abolishing those fees which are just not necessary anymore."

Michael Jordaan, Co-founder - Bank Zero

But surely there are costs involved for banks to maintain their various systems?
In a free market, customers should be free to choose what they pay, and what they're willing to pay for, is Jordaan's response.

"That means that if somebody wants access to, let's say bank branches which cost a lot of money... or if they want to do banking in an old-fashioned way, for example being heavily reliant on cash, so be it - then they should pay for those services."

Michael Jordaan, Co-founder - Bank Zero

"But it is also possible today to do all your banking on your smartphone which is very low-cost. In that instance, what we believe is that most of those fees should be free - that is the price of the future, that most bank services are accessible for nearly nothing because the cost of delivering them has become so low."

Michael Jordaan, Co-founder - Bank Zero

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