{"id":289098,"date":"2018-12-04T10:40:55","date_gmt":"2018-12-04T08:40:55","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=289098"},"modified":"2018-12-04T10:42:35","modified_gmt":"2018-12-04T08:42:35","slug":"bank-zero-tyme-and-discovery-have-sa-banking-execs-stressed-report","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/289098\/bank-zero-tyme-and-discovery-have-sa-banking-execs-stressed-report\/","title":{"rendered":"Bank Zero, Tyme and Discovery have SA banking execs stressed: report"},"content":{"rendered":"

South Africa’s new banking entrants – Discovery Bank, TymeBank and Bank Zero – all expect to have substantially lower cost-to-income ratios than the big five lenders.<\/p>\n

According to a new report by Reuters<\/a><\/strong>, this will help them stand out in an industry dominated by the current ‘big five’ of Capitec, Absa, FirstRand, Nedbank and Standard Bank.<\/p>\n

All three newcomers will have fewer employees, lower administrative expenses and less need for costly back-office technology – with the aim of wooing customers with no fees, higher rates on savings and cheaper credit.<\/p>\n

While the new banks declined to put a figure on their expected cost-to-income ratios, four industry executives indicated to Reuters that they had worked out efficiency ratios of 25% to 30%.<\/p>\n

This number is closer to 60% for the current ‘big five’.<\/p>\n

“I have been dumbfounded at how low the cost can be,” said Bank Zero\u2019s co-founder Michael Jordaan.<\/p>\n

“Our technology cost is 1% of 1% of the annual tech budget at one of the big banks.”<\/p>\n

“There\u2019s anxiety in executive committee meetings about what\u2019s about to happen,” an executive at one of the big banks said. “Your regular bank will be happy with a cost-to-income ratio of 50%.”<\/p>\n

These concerns have been compounded by Capitec’s ‘aggressive pricing model which has resulted in it doubling its client base in the past five years, Reuters said.<\/p>\n

\u201cWhile we haven\u2019t disclosed yet what our pricing structure will be, the name Bank Zero should give you a very strong hint of what the banking fees should be,” Jordaan said.<\/p>\n

“Once we launch, there will be many more things that we think we can do to revolutionise banking, not just in South Africa, but also other emerging markets,” he said.<\/p>\n

\n

Read: AA and Nedbank launch new cheque card that lets you earn free air miles<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa’s new banking entrants – Discovery Bank, TymeBank and Bank Zero – all expect to have substantially lower cost-to-income ratios than the big five lenders.<\/p>\n","protected":false},"author":10,"featured_media":280791,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[26],"class_list":["post-289098","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/289098","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=289098"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/289098\/revisions"}],"predecessor-version":[{"id":289120,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/289098\/revisions\/289120"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/280791"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=289098"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=289098"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=289098"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}