Evaluating the perceived existence of racial profiling and income inequalities in the South African banking sector

Abstract

The purpose of the study was to investigate inequality of outcomes and opportunities. Inequality of outcome in the context of the role that education played in narrowing the income inequality gap. Inequality of opportunities in the context of disparities in financial services access by way of racially profiling and subsequently the role that media played in perpetuating the notion of racial profiling in the South African banking sector. The research strategy utilised was quantitative with the research design being the cross-sectional research design. Moreover, the data collection instruments applied in this study was the fully structured questionnaire. Analytical methods include frequencies and correlations. The results indicate that education does not narrow income inequality in the South African banking sector. This finding was confirmed by the hypothesis testing where the null hypothesis was not rejected which concluded that education is not significantly recognised to influence income inequality in the South African banking sector. The results in relation to the second research questions indicated that disparities in financial services access by way of racial profiling does exist. Subsequently, this was confirmed by the hypothesis testing where the null hypothesis that suggested that the disparity does not exist was rejected. Meaning, that the banking sector do profile their clients. Results in relation to the third research questions indicate that the notion of racial profiling is a phenomenon that had been personally experienced by individuals rather than perpetuated by media coverage. The main recommendation of this study was that banks must have a transparent credit scoring system during the credit application process, so that it can demystify the notion of discrimination. Furthermore, the study recommends that the definition of the term racial profiling be added to literature to providing a platform for future study replication. In terms of value addition, this study is one of the first research papers to contribute to the pool of knowledge and to investigate the role of education in narrowing income inequality and the existence of racial profiling in the South African banking sector. Thus, providing a platform for future replication in other sectors and expansion on the topic.