Financial regulation in South Africa : a case study on the implementation of the national credit act by the four big banks
Davids, Marlon (2008-12)
ENGLISH ABSTRACT: The banking industry is one of the most regulated industries in the world. The
majority of these regulations are drafted to provide protection to consumers
and investors and to ensure the systemic stability of the economy.
South African banks, like many of their international counterparts, face a
plethora of financial regulation aimed at ensuring stability and protection. In
addition to these regulations, South Africa's prior exclusionary policies have
resulted in the post-democratic government prescribing additional regulation,
in part to address the economic duality that exists within the South African
economy and in part to offer adequate protection to the most vulnerable in the
society. The National Credit Act (NCA) is one such piece of legislation that
has introduced a new era of consumer credit regulation and practice, bringing
about wholesale changes to the consumer credit industry.
The NCA and more than 260 other financial regulations in South Africa have a
significant impact on banks, with each piece of legislation resulting in banks
having to adapt to the changing environment (Nyamakanga, 2007).
Using the four big banks' implementation of the NCA as a case study, the
present study aims to establish if an integrative change management strategy
could assist banks in effectively implementing financial regulation. The
following aspects of the banks' implementation of the NCA were researched:
• Effectiveness of financial regulation.
• Current barriers and challenges to the implementation process.
• Effect of these challenges on banks.
• Impact on staff and customers.
• Methods used to overcome the challenges.
• Future challenges of the NCA.
• Support structures used during implementation.
• Use of change management principles.
• Recommended strategies for future regulatory changes.
• Recommended changes to the NCA.
Detailed interviews were conducted with the overall NCA project leaders of
each of the four big banks, namely, Absa, FNB, Nedbank and Standard Bank.
The method of content analyses was used to analyse the qualitative data
collected through in-depth interviews and the outcomes thereof formed the
basis of the conclusions drawn.
The study found that there were numerous challenges that the banks faced
during the implementation of the NCA, the most common and significant as
recognised by the population include, the magnitude of the Act, difficulty in
interpreting the Act, the process of debt counselling and the associated costs
The study further found that using the principles of change management
enhanced the banks' ability to implement the NCA.
Conclusions drawn on the present study are confined to desktop research and
semi-structured interviews conducted with the participating banks. It might be
useful for future studies on the subject to include a broader population base
which focuses on additional pieces of financial legislation in order to further
enhance the findings of the present study.
AFRIKAANSE OPSOMMING: Bankwese is tans een van die mees gereguleerde industriee ter wereld. Die
meerderheid van hierdie regulasies is ontwerp vir die beskerming van
verbruikers en beleggers asook om die sistemiese stabiliteit van die ekonomie
Suid-Afrikaanse banke, soos talle van hul oorsese teenstukke, verduur talle
finansiele wetgewing gemik op beskerming en stabiliteit. Die gewese
uitsluitende Suid-Afrikaanse wette het veroorsaak dat die huidige
demokratiese regering addisionele wetgewing voorskryf, gedeeltelik om die
tweesydige Suid-Afrikaanse ekonomie aan te spreek en gedeeltelik om
genoegsame beskerming aan die kwesbaarste van die gemeenskap te bied.
Die Nasionale Krediet Wet (NKW) bied 'n nuwe era van verbruikerswetgewing
en -praktyk aan wat terselfdertyd grootskaalse veranderinge op die verbruikers
krediet bedryf teweegbring.
Die NKW tesame met meer as 260 ander Suid-Afrikaanse finansiele
wetgewing het 'n groot uitwerking op banke, met elke wet wat veroorsaak dat
banke moet aanpas by die veranderlike omgewing (Nyamakanga, 2007).
Deur om die vier groot banke se uitvoer van die NKW as 'n gevallestudie te
gebruik, is die doel van hierdie studie om vas te stel of 'n geintegreerde
veranderingsbestuurstrategie banke kan help met die doeltreffende uitvoering
van finansiele wetgewing.
Die volgende aspekte van die banke se uitvoering van die NKW is ondersoek:
• Doeltreffendheid van finansiele regulasie.
• Huidige versperrings en uitdagings tot die uitvoeringsproses.
• Uitwerk van uitdagings op banke.
• Uitwerking op personeel en verbruikers.
• Metodiek gebruik om uitdagings te bowe te kom.
• Toekomstige uitdagings van die NKW.
• Ondersteunende strukture gebruik tydens uitvoering.
• Gebruik van veranderingsbestuurbeginsels.
• Aanbeveling van strategiee vir toekomende wetgewende veranderings.
• Aanbeveling van veranderings tot die NKW.
'n Volledige onderhoud is gevoer met die projekleiers van elk van die vier
groot banke, naamlik, Absa, FNB, Nedbank en Standard Bank.
Inhoudsanalise was gebruik om die kwalitatiewe data te analiseer en die
uitkoms daarvan vorm die basis van die gevolgtrekkings.
Die studie dui aan dat banke baie uitdagings getrotseer het gedurende die
uitvoer van NKW, die gewigtigste en algemeenste SODS herken deur die
bevolking sluit in, die grootte van die Wet, moeilikheid in vertolking van die
Wet, die skuldberadingsproses en die begeleidende koste van wetstoepassing.
Die studie dui verder dat die beginsels van veranderingsbestuur banke se
vermoe om die NKW uit te voer verbeter.
Gevolgtrekkings aangaande die huidige studie is beperk tot "desktop"
navorsing en half-gestruktureerde onderhoude met die deelnemende banke.
Dit mag van waarde wees vir toekomstige studies om 'n bree bevolkingsbasis
in te sluit met addisionele finansiele wetgewing wat die bevindings van die
huidige studie kan bevorder.
Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/5539