Financial Services


The South African financial services industry is complex and multi-faceted, making it very difficult to categorise.


Firstly, there is a bewildering array of products and services, with new ones being added almost daily.


Secondly, changes in the external environment are leading to on-going and unpredictable change in the structure of the industry:


• Changes in industry regulations in the industry have meant that the barriers between banks, life offices, unit trust companies and stockbrokers are being broken down, and many of these organisations are exploring entering new areas of business.


• Technology is key in enabling innovative players to deliver their products and services in new ways.


• Global players are entering Africa via the South African market, with competition coming mainly in the form of mergers, take-overs and the purchase of shareholdings in local companies. International banks were among the first of the multinationals to arrive after the 1994 general election, lured by deregulation of the JSE and imminence of exchange control relaxation. There are now more than 70 in the local market. While many entered through stock broking, they quickly diversified into corporate finance and advisory services.


• A change which will further change the profile of the industry is the relaxation of foreign exchange controls, which will complete the transition to a world where the borders between players and their traditional turfs have disappeared, and the competitive winds are keenly felt in the quest to deliver the best returns on capital.
The financial services industry in South Africa comprises a wide and complex range of activities, including banking, insurance, investment services, managed funds (unit trusts) and other financial services. This categorisation has been adopted for convenience sake - it is by no means definitive, and there is an overlap of activities.


• Banking

• Insurance

• Short Term Insurance

• Group/Employee Benefits (Pension Funds,Provident Funds, Funeral Schemes, Group Life & Disability Benefits)

• Life Assurance

• Health Care Insurance (Medical Aids, Self-Insurance Programmes, Health Insurance)

• Investment Services

• Managed Funds (Unit Trusts)

• Other Financial Services includes services such as

• Accounting

• Business Broking

• Property Services

• Emigration Advice

• Estate Planning

• Investment Planning

• Legal Advice

• Retirement Planning

• Stockbroking

• Tax Consulting


Operating side by side with this network of financial services are a number of financial markets with their associated financial instruments and facilitating bodies. The most important of these in South Africa are:

• The money market

• The capital market (including shares which are traded on the Johannesburg Stock Exchange)

• The foreign exchange market

• The options and futures markets, in which SAFEX plays a prominent role


The main regulatory authorities currently associated with the financial services industry are the South African Reserve Bank and the Financial Services Board, which work closely with a variety of advisory committees and the Office of the Registrar of Companies of the Department of Trade and Industry to fulfil their regulatory and supervisory duties via the Policy Board for Financial Services and Regulation to the Minister of Finance.


This somewhat cumbersome arrangement is likely to change in order to achieve the necessary responsiveness to deal with the changing industry structure, to improve investor protection and to harmonise South Africa's financial regulation with that of other countries.


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