Browsing by Author "Mathole, Alexandria Motshwanetsi"

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    A critical analysis of the South African consumer protection regulatory architecture in the retail banking sector with a focus on fair customer outcomes in the context of its developing economy
    (2025) Mathole, Alexandria Motshwanetsi; Naudé, Tjakie
    Fair market conduct in a banker-customer relationship is crucial to maintaining trust and confidence in the financial system. Therefore, adopting appropriate fairness control mechanisms in conduct regulation for retail banking is vital, considering the complex and long-lasting nature of financial transactions and associated legal risks. A holistic systems thinking approach analysing the interconnectedness of the regulatory framework, supervisory architecture and fairness control mechanisms will enhance delivery of fair customer outcomes. In a Twin Peaks model with multiple regulators having overlapping mandates that influence retail consumer protection, entrenching effective supervisor cooperation, coordination, and accountability measures requires that information-sharing and coordination processes and ways of working be built into the operating procedures and measurement frameworks of regulatory agencies. Formal coordination structures must be supplemented with effective information sharing on an 'unsolicited basis', especially at an operational level. Clarity is key on how power is exercised, rights are defined and protected, and how various interests are represented and balanced. The structure, capabilities and capacity of the conduct regulator must be strengthened. A systematic assessment must be conducted of the consumer protections under the COFI Bill and the Conduct Standard against the fundamental consumer rights afforded under the CPA. To guide financial institutions and customers alike, COFI as the primary conduct legislation must establish an overarching regime prohibiting unfair terms. A principles-based regulatory approach should be complemented by risk-based and proportional rules, which should include an indicative, non-exhaustive grey list of terms that may be considered unfair. A simplified and understandable composite criterion must be introduced to determine fairness of conduct, practices or outcomes (not just contractual terms). Given financial literacy deficiencies and vulnerability of a large part of the retail customer base in South Africa, an overriding duty of good faith should serve as an anchoring principle of the principles-based approach.