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This research seeks to determine what factors and combinations of banking features drive the choice of a financial service provider. Two studies have been devised to explore the research question. The initial study, uses factor analysis and logistic regression to examine the importance of perceived cost, convenience, and relational trust in the choice of a financial services provider. An additional study uses choice-based conjoint analysis to conduct an exploratory study to identify combinations of banking features that potential customers perceive as most attractive. The study simulates real-world buying situations that ask research participants to trade one financial services attribute for another. Results from the first study suggest that a consumer’s choice of banks, prepaid cards, online lending, and the US Postal Service for financial services is associated with a preference for convenience while relational trust and perceived cost drives the choice of “street” AFS providers. In the second study, results from the choice-based conjoint analysis suggest that fees are significantly more important than convenience and level of customer contact across all categorical variables (age, gender, race/ethnicity, employment, income, and education). Additionally, in-person customer service contact is considered more important than convenience. Understanding these factors, optimal combinations and proportions, and trade-offs through the eyes of the consumer, may be of value to both policy makers and industry officials alike when grappling with options to strengthen financial inclusion. / Business Administration/Strategic Management

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Thesis (MDF)--Stellenbosch University, 2015. / ENGLISH ABSTRACT: It is accepted that financial sector development contributes to economic growth, equality and poverty alleviation. Economic development in many developing economies is constrained by the failure of financial markets to provide appropriate financial services products to enable these economies to address structural transformation and enable sustainable economic growth. Development Finance Institutions (DFIs) have emerged as an effective institutional vehicle to provide financial services to support the development and financing needs of market segments, particularly in developing economies, which the commercial financial sector is unable or unwilling to serve. DFIs provide financing to markets with a perceived high investment risk by developing appropriately structured innovative financing solutions and risk mitigation instruments needed to address the infrastructure and development financing gaps within these economies. DFIs are able to address commercial financial market failure by providing financing to support long-term private sector investment in infrastructure, financing products that service high-risk market sectors that lack collateral and financing to support public sector efforts to provide adequate social and economic infrastructure in countries with a high-risk investment rating. Specialist advisory skills are a critical resource that DFIs deploy to identify, package and finance sustainable and bankable solutions to support transformative growth. For DFIs to operate optimally they need to implement an integrated loan approval process that enables effective investment decision-making. By deploying specialist advisory services at each stage of the investment value chain, DFIs comply with international best practice standards, package development finance solutions to meet potential clients’ needs and ensure financial sustainability. An extensive literature review on DFI practice revealed that the predominant literature on DFIs focuses on the mandate and governance relationships within these institutions. This research assignment addressed the gap in available DFI literature. The research assignment aimed to build on the available literature on DFI investment decision-making and to contribute to the body of knowledge of the DFI investment value chain. The research assignment focused on DFI operations and investment decision-making procedures and considered how DFIs deploy specialist advisory services to enhance the application of an integrated loan approval process, mitigate investment risk and enable the optimal allocation of scarce resources to enhance sustainable development. The assignment identified the various institutional approaches and methodologies DFIs adopt to utilise specialist advisory services and identified the challenges, opportunities and limitations within the process. Chapter 1 introduces the key themes addressed in the research assignment. Chapter 2 provides a literature review of DFI practice and application of best practice considerations in investment decision-making. Chapter 3 details the research methodology deployed to conclude the research assignment. Chapter 4 addresses the research findings emanating from a case study analysis of the specialist advisory services deployed by the Development Bank of Southern Africa (DBSA), the European Investment Bank (EIB) and the Land Bank of South Africa. The assignment concludes with findings and recommendations. The research assignment found that limited investigation has been conducted on the operational execution of specialist advisory services within the investment value chain. Specialist advisory services provide DFIs with a key resource to assist in assessing potential loan applications in ensuring that clients meet mandate criteria to qualify for DFI loan applications, assist in assessing whether clients meet investment standards, and ensure that financially sustainable transactions are supported. To enhance DFI practice, further research is required to unpack the various investment modules applied within the investment value chain.

Customer retention has been shown by academic researchers to be more profitable than customer acquisition. However, its implementation in the business environment has not been so successful. One of the reasons for this is that customer retention can be achieved in several ways (i.e. loyalty programs, affinity cards and switching costs) and that the translation from the concept of “retaining customers” to the actions and strategies to retain them is not always easy. One of the most attractive strategies to ensure that customers remain within the organisation is through cross-selling and up-selling. In short, the objective is to increase the number (or the value) of the products that a customer buys from a company to make it more difficult for him/her to leave. Whilst academic research has deeply investigated the concepts of loyalty, retention programs and trust, amongst others, cross-selling has not received the same level of attention. Moreover, existing research on cross-selling has been focused on products rather than on services. Finally, this research has mostly been conceptual in nature, with limited attempts to model or design practical cross-selling and up-selling strategies. In order for crossselling and up-selling to be effective retention strategies, they need to be tailored to the needs of the customer. The offer must be adequate in terms of the target (who is going to buy the product), the content (what is going to be purchased) and a time (when is the right moment to offer the new product). This thesis investigates customer retention and cross-selling and up-selling from a practical point of view in the financial services industry. Firstly, it assesses the importance of the concepts of customer retention and cross-selling and up-selling through several interviews conducted with financial services providers (insurance companies, building societies and independent financial industry bodies). Having established the relevance of these concepts in the industry, the next step developed and applied a framework to design cross-selling and up-selling strategies. This framework, named the “Who-What-When” framework, was applied to the transactional and customer data bases of two financial services providers (a Spanish insurance company and a UK building society). The “Who-What-When” method ii begins by segmenting the customer base in order to understand the characteristics and potential of each customer. It then, moves to modelling purchase propensity models, understanding the relationships between products in order to determine what product should be offered to each segment, according to their characteristics and their consumption history. Finally, it analyses the time sequence of the purchases in order to determine the right time (when the purchase is more likely to occur) to approach each customer, bearing in mind how they behave and the maturity of the products already held. The contribution of this thesis is twofold. From an academic point of view, the research demonstrates the importance of customer retention and cross-selling in the financial services industry, being both recognised as key strategic and tactical approaches for the future of the industry. Secondly, from a practical point of view, it contributes by developing an analytical framework to discover and design crossselling and up-selling strategies, aimed at retaining customers. This is achieved through the ‘Who-What-When’ framework which takes into account customer characteristics, consumption patterns and acquisition sequence to model cross-selling activities. Therefore, it refutes the traditional approach that ‘one size fits all’, advocating tailored strategies. Finally, this research highlights, from the empirical analysis, how repurchase decision is highly influenced by the length of the relationship with the provider and the type of products already purchased. Understanding these factors is key to successfully retaining customers via crossselling.

This study identifies the various elements and factors that a financial services company needs to consider when implementing activity-based costing. This study evaluates the appropriateness of activity-based costing for financial services and proposes an implementation framework for activity-based costing in this environment. Management, in today’s constant changing and competitive world, needs management information to support strategic and pricing decisions. Traditional financial accounting information sometimes hides the economic reality of client profitability and product costs, and does not supply sufficient information for pricing decisions. This study confirmed that activity-based costing can assist in addressing this problem. Activity-based costing was originally developed for the manufacturing environment. By studying available literature, this study proved that activitybased costing can be used successfully in a financial services environment. A manufacturing environment has a higher direct cost input than a services environment. The cost structure in a services environment allows a higher percentage of cost to be allocated by identifying activities and using cost drivers to allocate these costs to cost objects. Activity-based costing models add value to management by supplying them with information that supports strategic decisions, pricing decisions, understanding client profitability and product costs. This study points out that there are crucial success factors that need to be considered before embarking on the implementation of activity-based costing. Finally the study proposes that activity-based costing be implemented in a financial services environment to support management decision making. / Prof. A.L. Boessenkool

Recognition of Prior Learning (RPL) is an internationally accepted process of assessing non-formal learning with the intention of matching it to academic credits. This allows the candidate to earn either a full or partial qualification based on knowledge and/or skills acquired outside of the formal classroom. The South African insurance sector was faced with legislation requiring all financial advisers to earn academic credits before they could continue in the industry. The sector believed that the RPL process would suit their circumstances because most financial advisers had many years of workplace experience and had mostly attended many internal, but often unaccredited, product training programmes. However, there was no RPL implementation model to guide a workplace implementation of this nature as most RPL models followed the practices set by formal higher education providers and there was no consideration of the many variables that have an impact in the workplace. This research set out to design a logic model to guide the implementation of workplace RPL in the insurance sector. The data was collected during the evaluation of an RPL implementation programme that had good results but which used the more individualistically inspired RPL approach of formal education. The data was analysed using grounded theory data analysis techniques (Strauss & Corbin, 1998 and Glaser & Strauss, 1967) and the result was the identification of 18 broad categories. Further analysis reduced these to five categories, i.e. reaction to the circumstances requiring the RPL, personal mastery, team support, changing perceptions towards the RPL process, and perceived outcome of the RPL process. These categories were researched by looking at the most influential traditional and workplace learning theorists, as well as the most influential RPL theorists. Finally, a secondary data analysis was conducted on 18 workplace RPL case studies described by Dyson and Keating (2005). The results of this research were formulated into a logic model to guide RPL implementation in the insurance sector. Using this logic model as a guide, further recommendations were made to guide workplace RPL implementation in the future. / Prof. W.J. Coetsee Dr. L. Beekman

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M.Comm. / VAT is a tax that is based on taxing the value added on successive transactions in the supply chain, accordingly it is a tax designed for the retail or manufacturing industries. South Africa introduced VAT that is similar to that introduced across the world and later refined it. The revisions included the introduction of VAT on banking services. The introduction of VAT to banking is a first in the VAT world but still does not find a cure for the principle dilemma of taxing a bank's value added, under VAT. The study therefore established if banks are treated fairly by investigating: • The three canons of taxation, • The eight principles on which VAT rests, • And the agreement between SARS and the Council of South African Banks. The reason of the above is to propose enhancements or an alternative design that would either increase the accuracy, equity, or simplify the calculation of VAT in the banking sector. The study found that there are several options when introducing VAT to the financial services sector, namely: • zero rate it and the fiscuss looses out on the output VAT, • tax it and increase the cost of borrowing as well as face the problems of determining the value added per transaction or; • exempt it and a practice known as cascading takes place. Neither of these solutions seemed viable although the full taxation option is conceptually the only correct method oftaxation. In most countries the exemption option was taken. The result of exempting interest is that banks have to apportion their input VAT. There are various options open to a bank when calculating the ratio of input VAT to be claimed, yet legislation has only made mention of two. To alleviate this situation the VAT authorities and the Council of South African Banks have agreed upon a methodology to calculate the ratio of input VAT to be reclaimed. This agreement is not compulsory and only applies to areas where the bank does not have an alternative apportionment technique, and in some instances is also flawed in its logic. Consequently banks have the option to apportion input VAT on what they perceive to be a fair basis. The indecision and inequities described above does not result an accurate VAT. The conclusion was that the design is urtiust and the practical calculation, when applied, does not the deliver the correct amount of tax payable. The study introduced a different form of VAT, named the Business Transfer Tax. This tax is an additive form of VAT, based on accounts that relate to interest and trading income. Interest income and trading income would be zero rated under the current VAT, and therefore entitle the bank to claim input tax incurred on expenditure. This would overcome all of the issues not resolved previously.

In the interconnected world of today more and more people get on the move. We go abroad for vacations, visits or business trips and we change countries of residence as we pursue new opportunities. Cross-border mobility is becoming part of our life. In recent years consumer researchers have been showing an increasing interest in particularities of consumption in condition of global mobility. Although previous studies have acknowledged the importance of economic capital in enabling global consumer mobility, existing research could be enriched by a deeper understanding of how globally mobile consumers manage their financial consumption across borders. The aim of this dissertation is to is to contribute to the uncovering of the particularities of consumption of financial services in global mobility by documenting globally mobile consumers’ financial consumption patterns, the ways they build and maintain relationships with their financial service providers and the ways in which they navigate cultural norms of service consumption and financial consumption across borders. The study is based on four research articles that develop an understanding of the dimensions of financial consumption and uncover purchasing, relational and acculturative aspects of consumption of financial services in mobility. The overarching chapter further develops the insights from the articles, bringing forward the concept of the cephalopodic consumption mode – a particular way in which globally mobile consumers organize their financial consumption. This work contributes to the domain of research on serially relocating consumers by showing how globally mobile professionals engage in cephalopodic consumption mode (CCM), using their economic capital in order to navigate their international movement. The multipresence, multi-acculturation, instrumentality and camouflage of CCM emerge as an answer to challenges of mobility – the need to reacquaint with new countries every time upon relocation, the future need to leave again and the necessity to organize consumption across borders. / <p>At the time of the doctoral defense, the following papers were unpublished and had a status as follows: Paper 2: Manuscript. Paper 4: Manuscript.</p>