Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)Industry ChartersFinancial Services CharterCode Series FS800: Measurement of the Access to Financial Services Element of Broad-Based Black Economic EmpowermentStatement 801: The Measurement of the Access to Financial Services Element of Broad-Based Black Economic Empowerment as it relates to members of the Banking Association of South Africa3. The Definitions, Standards, Target Markets and Key Measurement Principles of Access to Financial Services3.1 Geographic Access |
Preamble
Financial inclusion will be accomplished through utilising a combination of bank-managed, third party, and client-owned resources. Only the category of resources (sales people, ATMs, automatic note acceptors, points of sale devices, retail agencies, etc.) can be geographically identified and tracked. The latter category of client-owned infrastructure (mobile phones and personal computers etc.) although providing the most cost effective and convenient access, cannot be easily identified within a specific geographic position.
Due to the above, we suggest that Access to Financial Services via these two categories of resources be measured through different methodologies.
| 3.1.1 | Geographic banking access |
Definition:
Points of representation:
| • | Transaction Points are points at which customers can take cash or make a purchase from their accounts. (Suggested target of 85%) |
| • | Service Points are points where a customer can reset a PIN, do money transfers, get a statement, or initiate account queries. (Suggested target of 70%) |
| • | Sales Points are points at which customers can replace a card, deposit cash into their accounts, or acquire a transaction account, a funeral policy, a savings account or a loan. (Suggested target of 60%) |
Target market
Qualifying Areas are municipal suburbs or sub-areas in which more than 50% of households fall within LSM 1 - 5.
Measurement principles:
| • | The sector will be measured as a collective and not on an individual institution basis. Notwithstanding this, each institution will be measured independently for compliance against its own targets, the criteria of which to be determined and agreed by an industry working committee. |
| • | Therefore, there must be at least one Sales Point within 15 km of the identified areas, at least one Service Point within 1 0 km of the identified areas and one Transaction Point within 5km of the identified areas, regardless of which institution's infrastructure is present. |
Measurement
Convenient Access is the presence of:
| • | A Sales Point within a 15km radius of a qualifying area |
| • | A Service Point within a 10km radius of a qualifying area |
| • | A Transaction Point within a 5km radius of a qualifying area |
NB: To avoid any doubt, an Access Point that meets all three criteria above may be counted under all three line items of the Geographic Access scorecard. Therefore, if a Sales Point is within a 5 km radius of the qualifying area it will count under all three geographic access line items, since it has all the features of all three points of presence.
Geographic access will be evaluated in three steps:
| • | Identify Qualifying Areas |
| • | Identify Sales Points, Service Points and Transaction Points within the Qualifying Areas |
| • | Allocate points on the basis that at least 80% of people in a Qualifying Area have Convenient Access to a Sales Point (within a 15 km radius), Service Point (within a 10 km radius) or Transaction Point (within a 5 km radius). |
Geographical access is specifically about proximity to Transaction, Service and Sales Points and does not imply product holding, which is covered separately in the Product Access section.
| 3.1.2 | Electronic customer infrastructure access: Population Penetration |
Preamble
Since access via a customer's own or third party infrastructure cannot easily be pinpointed per specific geographic area, the penetration of certain transaction types to an identified client base, on identified channels will be used as a measure of access for mobile (cell phone) banking, telephone banking, internet banking, and others.
Definition
Access via any client-owned or third party infrastructure; which will include but not be limited to, internet banking, cell-phone banking, telephone banking, or any new electronic product and / or technology.
Target market
Target Customers are individual customers who earn less than R5 000 per month (annually adjusted by CPI). Customer income should be derived from the customer's account behaviour using an agreed formula, still to be determined by an industry working committee.
Products
Qualifying transactions on products include but are not limited to, money transfers, account-to-account transfers, prepaid purchases and balance enquiries done using the customer's mobile phone, telephone, internet banking or any other new technology.
Measurement
Electronic Access will be measured at industry level but with agreed targets per individual organisation. Each organisation will be measured on their own performance against their agreed target.
Targets
As Electronic Access is a new measurement, for which no industry baseline data is available, no targets can, at this stage, be agreed. The formulae for identifying the target market, has also not been agreed, since LSM information will not be used as a base.
Other comments
It is proposed that an Industry Working Committee be convened to evaluate criteria and measurement. This is a necessity since the qualifying areas (previously national 15 km and 10 km, and qualifying points of representation (previously branch and ATM, now all inclusive) have been changed. This will necessarily result in new baseline numbers and newly identified industry gaps. These gaps will need to be addressed by the industry via all the impacted institutions. As such individual institution targets must be formulated and agreed, taking impact on capital expenditure as well as economic viability into consideration.