The Order of Customer Acquisition of Financial Services in South Africa

Abstract

Acquisition pattern analysis (APA) of nancial services is a fairly new eld with most of the empirical research having been conducted in developed economies, and few research in developing economies. These studies looked at patterns in the acquisition of nancial services, and the e ects of demographic factors in the acquisition of these services. The author used data from the 2008 All Media and Products Survey (AMPS), conducted by the South African Advertising and Research Foundation (SAARF), to investigate, using multilinear regression, the e ects of demographic factors in customer acquisition of nancial services in South Africa; and to investigate, using the Mokken Scaling Pro- cedure (MSP), the extent to which there is a discernible pattern in the acquisition of these services. Income, education and age were highly signi cant factors in the acquisition of most nancial services. Marriage and presence of children were key determinants in home ownership and presence of a mortgage facility. Vehicle nancing facility ownership de- creased with age. While home ownership was negatively correlated with vehicle nancing facility, it had a positive signi cance in the acquisition of a garage card. The research ndings also demonstrated that income was a necessary but not su cient variable in enhancing ownership of nancial assets, especially investment type products. Education is also necessary. Age also showed signi cance, suggesting that the disadvantage of lack of formal education wears out with age, or increasing practical experience in nancially taking care of oneself. MSP results supported the existence of a pattern in the customer acquisition of nancial services in South Africa. The order of acquisition of nancial services was di erent for di erent income groups.