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Get ready for the onslaught... High interest will not protect you from ... Plan for your children's future with tru... UNIT TRUSTS:ABSA Balanced Fun... Wall Street bull ascends the throne once... 'South Africa still a good place to inve... Take delivery of service from the comfor... Is the advice you're getting good for yo... Brokers place their bets on the rollerco... |
Take delivery of service from the comfort of home
In our occasional series of guest columns by leading lights in the financial services industry, BEN SOLOMON, operating executive of Absa Direct and Cortal Direct, advises South Africans to make use of the new services available by telephone and PC
REMEMBER the days when there were no ATMs? When you had to get to the bank between 10am and 3.30pm and stand in a queue just to draw some cash? Following on the ATM comes direct delivery - the latest revolution in the financial services industry in South Africa. But for many people, direct delivery is still an unknown concept - they don't always understand the workings and advantages of this new service mechanism. What exactly is direct delivery? It is a system which enables clients to access all banking and financial services via the telephone, a PC or the Internet. Internationally, direct delivery started in the early eighties as a result of advanced technology. Broadly, it offered clients a cheaper form of service delivery, as well as convenience, and longer hours in which to do their business. The first of this type of service in the UK was offered on motor insurance. Clients could buy insurance over the phone at a lower cost because no intermediary or broker was involved. Although it took some years to catch on, it has basically become the norm for selling motor insurance there and in other parts of the world. The idea of direct delivery soon spread to other sectors of the financial industry, including banking and investments. For some time now, banks have been using the telephone to provide various services to clients. But it is important here to differentiate between telephone, PC or Internet banking on the one hand, and direct stand-alone organisations on the other. Direct stand-alone organisations deliver their services only via the telephone, PC or Internet, not through a branch or broker network. Clients not only benefit from lower costs, but also from more innovative products. Why you might ask? Because the direct organisation has no person-to-person interaction and no shop window to market its goods. The products have to be innovative and competitive to sell themselves. And to add to the advantages, service levels must be high. Experience overseas shows that the informed sector of the market has little if any need for a branch - they are comfortable dealing on the telephone. More and more direct operations, which offer a select range of products to niche markets, are starting up worldwide: Virgin Direct in the UK offers investment products; First Direct, also in the UK, and Open Bank in Spain offer a limited range of banking products; and Schwab in the US offers a wide range of investment products - all over the telephone. In South Africa today, most banks offer telephone and Internet banking. This decreases their number of branches and saves costs. It also provides clients with a more convenient way of accessing the bank's services and reduces their transaction costs. With Absa, which recently launched its telephone banking service, you can do your banking 24 hours a day, seven days a week. Although telephone banking is relatively new in South Africa, it has caught on in other parts of the world. At the Royal Bank of Scotland, more than 500 000 clients make use of telephone banking, and at TSB, a bank in the UK, at least 650 000 people have moved to telephone banking in the past two years. At Absa, we have seen a reluctance among our clients to start using the telephone for their banking. Those who have, however, have realised it is safe and convenient. Interestingly, we've found that while overseas banks experience a reluctance among older people to make use of telephone banking, the opposite applies in South Africa. Older people here seem to welcome the service - perhaps because of the escalating crime in this country, people prefer not to visit their branches for fear of being robbed. And for disabled people, telephone banking is obviously much more convenient. For those who doubt the new direct way of banking, I would like to stress how safe it is. No one can access a client's bank account without a pin number - which only the client knows. Statements are also available which will allow a client to keep tabs on his/her account. Absa recently launched Cortal Direct, one of the first direct stand-alone operations in South Africa. When you telephone the company, the voice answering your call acts as a single point of entry to all its services, and can give any information needed. Now that SA has become part of the global village, we will see an increase in both the number of financial institutions offering direct delivery and direct stand-alone organisations. Investors should make the most of the advantages this increase in competition will offer and shop around. After all, you only need a telephone or an Internet connection to access all the information you need.
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