Nedbank's decision to reduce bank fees is one of several initiatives aimed at retaining and attracting clients in a highly competitive market.

According to Nedbank Retail managing director Rob Shuter, Nedbank's efforts to turn its retail business around and regain market share have been taking place amid growing competition from other banks as well as new entrants.

Shuter was speaking at the public hearing of the Competition Commission enquiry into bank fees and the National Payment System, held in Pretoria on Thursday. Nedbank was the first bank to present its perspective.

"When the Competition Commission launched its enquiry we were already hard at work enhancing our competitiveness. We started with banking fees because that is what our research told us needed attention, but we have also made a significant investment into the expansion of our distribution channels in order to increase Nedbank's presence in areas where we have been under-represented. Non-traditional channels such as ATMs and cellphone banking are being enhanced as part of the same initiative," he said.

Shuter said the competition among banks to capture a slice of the small business market had also intensified substantially. "In October we launched a two-year free banking offer for small businesses as well as an innovative cellphone-based credit card processing solution aimed at sole traders and small merchants that offers a cost-effective alternative to a traditional point-of-sale device (POS)."

Shuter said Nedbank's bank fees would continue to receive attention in the months ahead as part of the bank's efforts to increase its relevance and appeal.

"Pick 'n Pay Go Banking, which is a division of Nedbank, already offers some of the lowest banking fees in the market. We have just announced the third round of price reductions on Nedbank's Mzansi offering and we are looking at ways of further simplifying our fee structure," he said.

Commenting on the National Payment System (NPS), Shuter said South Africa's system was similar to what was is in place in other countries.

"In all instances, cooperation among banks, as well as cooperation between banks and other users of the system, is required to make and receive payments," he said.

"Nedbank's view is that access to the NPS for both banks and non-banks is important, provided the integrity of the system is maintained.

"Consumers need to trust the fact that their money cannot be accessed by unauthorised parties. This is one of the fundamental principles that the rules of the NPS seek to uphold."

With specific reference to the strong profits enjoyed by banks in the last two years, Shuter said this had been the result of exceptionally favourable economic conditions that were unlikely to be repeated in the near future.

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