Best is on the net
It takes courage to compare South African bank fees. A few years back, a financial weekly commissioned one of the multinational accounting firms to figure out average charges, and ended up getting bullied into apologising. Apparently, not even chartered accountants could decipher the big four’s fees correctly.
The Competition Commission showed no more backbone against the banks. The commission blacked out portions of a report which the banks claimed were based on confidential information.
But an uncensored version of the report that surfaced on wikileaks.org showed the commission had actually buckled to bank bullying.
However, the days of banks and other financial services companies shouting down price comparisons are over, thanks to the growing number of websites specialising in this.
Thinkmoney.co.za was launched in July 2007 to coincide with the commission’s inquiry into banking, and was followed two months later by justmoney.co.za.
Thinkmoney.co.za’s Mike Kann and justmoney.co.za’s Andy Gilder follow the example of Simon Nixon, a post-dotcom Internet tycoon who listed moneysupermarket.com on the London Stock Exchange last year.
While moneysupermarket and its clones are a boon to consumers, an article in the UK’s Guardian, headlined “Beware when you compare”, warned that they are not entirely independent or comprehensive, since they act as sales agents for financial institutions that co-operate with them.
Kann describes thinkmoney.co.za as a “new-age broker”. The website helps potential customers pick the right product, and then earns commission if the person decides to buy the product online.
“We’re trying to be the Pick n Pay of financial services. If we can offer at least two or three choices , we’re getting competition going.”
Kann and Gilder say they try to be as comprehensive as possible, but some financial institutions simply do not want their prices compared.
Gilder said: “As long as companies don’t want to be included in a comparison aimed at finding the lowest price I think this will always be a point of conjecture.
“A number of companies argue, and in some cases fairly, that their unique selling point is their superior service or another immeasurable or intangible feature that cannot be compared in the online space.
“These companies will have an issue with genuine transparency in every medium, but for the rest of the providers we wait with open arms.”
Kann said opposition to comparison sites from some of the older established financial institutions has been balanced by newcomers embracing online selling.
“In medical aid, for instance, new providers like Resolution work very closely with us.”
Another source of revenue is advertising. Thinkmoney follows Google’s example in heading its comparison results with sponsored brands. Justmoney has opted not to do this.
“Justmoney does not list sponsored brands above its comparison results and does not de-brand lead forms to be sent to only one supplier,” Gilder said.
A third opinion can be gained from bankmonitor.co.za. The website is in its 10th year, run by listings service Infochoice.
Its research is based on work done by FinMark Trust and Wits Business School, making it possibly more independent than its two commercially driven competitors.
Moneysupermarket has done a lot to make the UK financial services more transparent, and hopefully the local comparison sites will do the same here.
Gilder said: “I think the UK market has progressed quite some distance from when the Guardian article was written. As consumers become more web savvy, the industry buy-in becomes closer to mandatory.
“When moneysupermarket.com did list a month after this Guardian article was written it was valued at £843-million rather than the £1-billion it had been hoping for — poor guys.
“Perhaps one day you could write a similar one when justmoney floats on the JSE for a comparable sum.”
Discuss online banking fee comparisons
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