Despite calculated efforts such as the CBK’s 2013 new prudential guidelines and the proposed Financial Markets Conduct Bill introduced earlier this year to ensure consumer protection and transparency in the financial services sector, little is known about the trends and affordability for financial services especially for low income earners.
A study by the FSD ‘The Price of being banked in Kenya’ says that comparing costs between banks is the most challenging part while actual costs of products and services are not well clarified.
While conducting the study the researchers found it difficult to obtain bank pricing data and that market information is still opaque.
“The bank staff tends to know the cost of routine transactions such as withdrawal fees but not for others such as bank-to-mobile transfers, salary-processing fees and intra-bank versus inter-bank transfers, etc. This information is surprisingly difficult to get.” Says the report.
Even though Banks are required by the Central Bank of Kenya to publish tarrif guides accompanied by fees and charges, the reports notes that the guides were either outdated, incomplete or lacking account specific information.
Lack of standardized tarrif information and how should it should be organized and presented posed a challenge to customers with some banks giving different costs for the same transaction complicated by complex tarrif structures that may result in waiving charges, retain others or apply rebates.
“All this obscurity is reflected in the tariff guides in banking halls that don’t reflect the exact charges for a transaction but rather give blanket figures.” the report reads further.
The report notes that bank staff pose as marketing/ sales people by recommending certain accounts based on a customer’s income rather than recommend an account based on customer needs. Additionally, the staff are quick to recommend an account that attracts charges even in cases where a different charge free account was available.
“The most striking finding was that bank staffs have been incentivized to sell particular products regardless of customer needs, in some cases even recommending more expensive or inappropriate accounts that were being pushed by marketing campaigns.” says FSD.
To collect data, researchers visited multiple bank branches posing as customers, as well as customer service call-lines and web searches to triangulate data. The report is quick to note that there are very few banks with up-to-date and accessible tariff guides.