Serving the base of the pyramid in South Africa : the case of the Mzansi basic bank account

Fick, James Desmond (2007-12)

Thesis (MBA (Business Management))--University of Stellenbosch, 2007.

Thesis

AFRIKAANSE OPSOMMING: Die Mzansi rekening, as Eerste Orde Nasionale rekening, is gesamentlik deur die “Groot 4” banke geloods, spesifiek met die oog daarop om toegang tot groter finansiële dienste te bewerkstellig in lyn met die Finansiële Dienste Handves. Hierdie navorsingsverslag ondersoek die sukses van die Mzansi rekening in terme van die verbetering van toegang tot finansiële dienste en die verwesinliking van Prahalad se visie van die Fortuin aan die onderkant van die piramide of die sogenaamde Base of the Pyramid (BoP). Die studie is gedoen deur onderhoude te voer met industrie-kenners wat nou betrokke was met die loods van die Mzansi rekening, asook deur ’n oorsig te doen van ’n verslag van die onlangse kommisie van ondersoek oor kompetisie in die bankwese in Suid Afrika. Die Mzansi rekening is inderdaad suksesvol daarin om toegang tot finansiële dienste vir alle Suid Afrikaners beskikbaar te maak, maar dit is steeds nie winsgewend vir die banke nie. Die Mzansi rekening is dus nie in lyn met Prahalad se visie van die BoP nie. Die winsgewendheid van die rekening in die toekoms hang af van die graad van aanvaarding van armes van meer doeltreffende elektroniese transaksies. Tot op datum wil dit voorkom asof Prahalad se gevoel dat die armes gevorderde tegnologie maklik aanvaar nie in die bank sektor in Suid Afrika geld nie. ’n Toenemende fokus op gebruik eerder as toegang en ’n beter belyning met Prahalad se twaalf beginsels van innovasie by die BoP mag egter wel beter wins vir die banke inhou. Selfs al sou winste nie materialiseer nie, is dit steeds voordelig vir banke wat bereid is om te eksperimenteer en te leer van die Mzansi ervaring. Die Mzansi rekening mag dalk die katalis wees vir nuwe en verbeterde produkte wat suksesvol sal wees in die BOP mark.

ENGLISH ABSTRACT: The Mzansi account, as a First Order National Bank Account, was jointly launched by the Big 4 Banks (ABSA, FNB, Nedbank and Standard Bank) specifically to increase access to financial services in line with the requirements of the Financial Sector Charter (FSC). This study explores the success of the Mzansi account with regard to improving access to financial services and achieving Prahalad’s vision of a Fortune at the Bottom of the Pyramid (BoP). The study was conducted by interviewing industry experts who were intimately involved in the launch of the Mzansi account and reviewing the transcripts of the recent commission of enquiry into the competition of banking in South Africa. The Mzansi account has been successful in increasing financial access for all South Africans but has not proved to be profitable for the banks. The Mzansi bank account therefore does not support Prahalad’s vision that there is a fortune at the base of the pyramid. The future profitability of the account is dependent on the acceptance of the poor of more efficient electronic transacting. To date it would seem that Prahalad’s notion that the poor accept advanced technology readily does not apply within the banking sector of South Africa. An increased focus on usage as apposed to access and a better alignment to Prahalad’s twelve principles of innovation at the BoP may well bring increased profits for the banks. Even if profits don’t materialise, for those banks willing to experiment and learn from the Mzansi experience. The Mzansi account may well be a catalyst for new and/or improved products that will be successful in the BoP market.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/840
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