The Delivery of Retail Banking Products to the Unbanked

The banking sector in South Africa is grappling with an imperative to transform of which one of the most significant issues is that of providing banking products and services to a market segment that has historically been excluded and neglected from access to financial products and services. The initiatives of the Financial Sector Charter have sought to address these imbalances, and signatories to the Charter have committed to providing the unbanked market segment with appropriate financial products and services. The purpose of this research has been to explore the requirements for providing banking products and services to the unbanked market segment and the challenges that the banks face in this regard.The research was qualitative and exploratory in nature. In-depth interviews were conducted with a sample of twenty representatives from retail banking institutions and institutions that provide research or consulting support in the banking industry. Respondents were selected through a combination of purposive and snowball sampling, based on their expertise. Content analysis was conducted on the outcomes of the interviews, and results compared to the literature.Based on the data collected, a sustainable value proposition for the banks‟ involvement in the unbanked market segment was identified as a prerequisite. This must be accompanied by an appropriate design of product and service features that reflects a segmented understanding of customers needs, an affordable price offering, a high level of customer interaction, and the accessible provision of such services. Such provision must be underpinned by the right mix of competencies, capabilities and skills, and must be supported by flexible and innovative operational models. These findings were integrated to provide a holistic model of the key factors required for the successful delivery of banking products and services to the unbanked market segment