The Mzansi bank account, launched in the latter part of October 2004, arose outof the financial services charter and is aimed at low income, previously unbankedindividuals and households. Since its inception, it has been supported by thefollowing financial institutions: Amalgamated banks of South Africa (ABSA),Standard Bank of South Africa (SBSA), First National Bank (FNB), Nedbank(essentially the four major retail banks in South Africa) and the Postbank (asubsidiary of the Post Office).This study investigates the performance of theMzansi account from both the customer and supporting financial institutions'perspectiveThe investigation's primary objectives focused on determining how accessibilityto financial services (and to the account itself) may be improved for customers,determining what Mzansi customers needs are, and how the account may beexpanded or enhanced to meet these needs. The secondary objectivesconcentrated on problems the supporting financial institutions faced: improvingaccessibility for customers (without too costly an investment in supportinginfrastructure), differentiating the product and service significantly from othercompeting institutions, limiting product cannibalisation (where the Mzansiaccount is chosen over higher order retail bank products) and limiting overallcosts of the account to ensure profitability.The research methodology consisted of a literature study and empirical researchthat in turn encompassed administering survey questionnaires to current Mzansicustomers. The literature study focused on both national and internationalattempts at banking the unbanked, distilled common learnings from theseattempts and ultimately described best practices with particular reference toimproving accessibility to financial services and tailoring financial servicesoptions to meet the most critical needs of the unbanked market. The literaturestudy also found that a definite business case exists for financial institutions- vii -willing to pursue this market, provided that the core value proposition wasadequately adapted. Previous findings on how to avoid product cannibalisation,as well as how to differentiate products and services to entrench greatercustomer appeal completed the literature study.The empirical research encompassed the development of a survey questionnaireaimed at understanding five core research areas: the Mzansi customer profile(for a sample of one hundred and forty seven existing customers and transactingat Gauteng branches and outlets and evenly distributed across each of thesupporting financial institutions), gauging how well customers understood theiraccounts, determining the service customers had received, understandingcustomer transaction and the value they attach to these transactions, and finallyaffording customers the opportunity to suggest ways in which the account maybe improved. The questionnaire comprised both open and closed ended question(the latter questions used a five point Likert-type scale to determine scoring).The results, apart from compiling an overall demographic profile of the customer,showed that significant work still needs to be accomplished by the financialinstitutions to ensure customers understand their accounts and the varioustransactions and channels available to customers. AIM transaction for instancecaused customers problems; to the extent that customers were willing to payalmost twice as much for branch transactions instead. The service received bycustomers also proved to be average, with more customer orientateddemonstrations and a greater amount of time spent during the account openingprocedure being seen as valuable ways to improve the overall service received.Customers valued cash withdrawal transactions the most, favouring the use ofthe branch channel. Customer needs were identified to be primarily credit based;with different credit facilities being required. Customer motivated improvementsalso extended to a greater range of free transactions on the account, improved- viii -interest rates on credit balances and some form of loyalty based discount oncertain transactions.Practical ways suggested to improve access to the account included accountproliferation techniques (where third parties may initiate the opening of an Mzansiaccount on behalf of a customer) and the use of mobile banking facilities. Theproduct functionality was also recommended to be expanded to include limitednumbers of debit and stop orders for the retail banks' offering, while a strongemphasis was placed on approaches to improving customer financial literacy byway of education programs that are community based. The later aspects werealso seen as strong departure points that the supporting financial institutionscould leverage to significantly differentiate their service and product offering.The objectives of the study were deemed to have been met, despite the fact thatthe study's geographical bias, customers possibly misrepresenting their incomeand possible translation bias.
