Restoring confidence in financial services a key focus for South Africa

16 April 2013 Johan van Zyl, ASISA
Johan van Zyl, Chairman of the Association for Savings and Investment South Africa (ASISA) and CEO of Sanlam

Johan van Zyl, Chairman of the Association for Savings and Investment South Africa (ASISA) and CEO of Sanlam

Stricter regulation of South Africa’s financial services industry alone will not restore confidence in the industry if it does not also ensure a sustainable environment conducive to doing business for the very industry that is being regulated.

An open critic of over regulation, Johan van Zyl, Chairman of the Association for Savings and Investment South Africa (ASISA) and CEO of Sanlam, said if regulation does not ensure level playing fields and remove unnecessary barriers to doing business, the financial services industry will not flourish. “This is not in the interest of the country and most certainly not in the interest of the consumer.”

Van Zyl was speaking at the opening of the 2013 ASISA Conference in Durban today, which is being attended by close to 400 delegates from the savings and investment industry, National Treasury, the Financial Services Board (FSB), the JSE, organised labour and other stakeholders. The theme of the two-day Conference is Regaining Confidence in the Financial Services Industry.

Van Zyl pointed out that rebuilding confidence in the financial services industry is a massive challenge that faces not only South Africa but also financial services worldwide.

“Globally financial services industries are looking at implementing sustainable solutions that will help rebuild the confidence that was dealt a devastating blow by the events of the global financial crisis. Unfortunately this crisis is far from over, with Cyprus the latest casualty.”

He praised South Africa’s robust and well-regulated financial system, which did not suffer a single casualty following the financial crisis. Throughout the global meltdown South Africa’s financial services sector maintained its position as one of the biggest contributors to the country’s GDP and also the most important mechanism through which the nation’s savings are channeled.

“It remains my firm view that the South African financial services sector does not suffer from the same weaknesses as the European and American sectors. I therefore do not believe that we will restore confidence in our industry through regulation alone.”

Van Zyl said key to restoring confidence in financial services is a sustainable environment where appropriate policies and regulations enable the financial services sector to continue to operate, compete, innovate and deliver solutions for South Africa and it citizens.

He added that within a sustainable environment ASISA and its members would be able to work with stakeholders towards achieving a financial services sector that is trusted by clients and consumers and serves their needs.

“I believe that all of us attending this conference today are here because we recognise that the solution to rebuilding confidence in our industry lies in working together as a collective towards the same goal.

“As an industry we recognise that in order to achieve our long-term goal of ensuring that our industry remains relevant and sustainable, we need to deliver solutions that are in line with the needs of our country, taking into consideration global and local developments and challenges.”

He said ASISA is therefore a committed partner to National Treasury and the Financial Services Board (FSB) in realising A safer financial sector to serve South Africa better, which is also the title of the National Treasury policy document released in 2011.

“I also expect that the long awaited gazetting of the Financial Sector Code (FSC) for Black Economic Empowerment at the end of 2012 will provide further opportunities to rebuild confidence in our industry.”

In anticipation of the gazetting of the Code, the ASISA Board last year approved the establishment of two industry initiatives, namely the ASISA Foundation and the ASISA Enterprise Development Fund.

The focus of the Foundation is to drive consumer financial literacy and consumer education initiatives on behalf of the savings and investment industry together with the ASISA Consumer Education Standing Committee. The Foundation holds a majority interest in the ASISA Enterprise Development Fund.

The objective of the ED Fund is to create sustainable value for all stakeholders through the growth and development of small and medium sized enterprises with a specific focus on enterprise development and supplier development.

“Initiatives like these prove our industry is serious about making a difference in this country, not just where profits are to be made, but also in non-traditional areas where the only gain is the long-term development and strengthening of the social-economic fabric of our country,” said Van Zyl.

At the Conference delegates will discuss significant issues such as costs, disclosure, access, innovation and infrastructure with the aim of identifying further strategic actions that will help the industry and its stakeholders rebuild confidence in the financial services industry.

According to Van Zyl, while regaining the confidence of its stakeholders is a key priority for the industry, another is for ASISA and its members to support the national agenda of creating employment, reducing poverty and reducing inequality.

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