Businesses to benefit from new post office system

mapIT, the international digital mapping provider, has built a geospatial layer which is compliant with the SA Post Office (Sapo). Businesses can now benefit from this Sapo compliant geospatial layer in order to ensure they capture accurate customer address data and engage with existing clients to update their records.

This data layer includes over 900 postal code areas and in addition to this also incorporates over 2 400 post office sites with post boxes for South Africa. Sapo utilises this information to help over 17 000 employees in the collection, sorting and delivery of letters and parcels for over 1.5bn mail pieces, which are processed every year. Furthermore, this data helps them to manage over 2 400 postal outlets throughout the country.

mapIT can provide this data as an overlay onto the enriched, quality TomTom Map Data, which is then available as an import into existing systems or offered as a web-based Address Validation Tool. This tool can be embedded into any website or behind a firewall for call centre purposes.

For businesses that are required by the credit act to communicate to policy holders, many of whom are based in rural areas, and where the only way of communication is via post, it is critical that they have the correct post code information in their databases. By validating against mapIT’s spatial layer, businesses sending bulk mail are able to save on costs by managing their delivery return rate percentage through accurate address information.

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Economy on growing path in 2014?

The year 2014 will bring the general elections and changes in the economy but will it bring a recovering economy? Let’s discuss some assumptions for 2014.

•  Economy on slow growing path

Most economists and organisations expect only modest growth for the economy in 2014 – although at a somewhat faster pace than in 2013. The predictions range from 2.5% to just below 3% compared to the expected growth of 2% in 2013, after economic growth slowed to only 0,7% in the third quarter of last year.

• Inflation

We have also seen a steady increase in expected inflation for 2014 month after month. Other recent forecasts include that of Standard Bank, which sees an average inflation rate of 6% this year compared to around 5.6% in 2013, and a forecast from Absa Capital, which estimates inflation at 6.1% this year.

The weaker rand, SA’s high propensity to import consumer goods and our reliance on imported oil are among the factors that are to be blamed for higher consumer and production prices.

Interest Rates (Photo credit: 401(K) 2013)

• Interest rates

Economists differ on the timing of a possible interest rate hike, but are mostly in agreement that rates are set to go up. At the moment, the most likely scenario is that we can expect an increase of 50 points anytime from the middle of the year onwards.

• Investment returns

Most market commentators and fund managers forecast lower investment returns in 2014 than during last year. Shares are currently high, given the fairly low expected growth of economy, the possibility of higher interest rates and unknown factors that might interrupt earnings flow in an election year. It is noteworthy that the price/earnings ratio on the All-share index is currently around a historic high of 18 times, usually seen before a period of strong earnings growth before a market correction.

On the JSE, stronger global growth and a weaker currency will help mining and commodity companies, but these shares are quite pricey already. Cash and bonds remain uninspiring, with current low interest rates and capital adjustments once interest rates increase. Property and property trusts offer good value with higher yields, but at the mercy at higher interest rates which might decrease capital value and ultimate returns.

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Profound changes in financial sector

National Treasury’s aim of a twin peak regulatory framework will change the financial sector in South Africa profoundly. The ministry suggested the first draft bill towards twin peak regulation. Call for public comments by 7 February 2014.

1)   Background and main objectives

The National Treasury aims for a twin peaks regulatory framework, a comprehensive framework for regulating the financial sector. The implementation of the twin peaks reform is a multi-year project, with a two-phase process envisaged. In this context the National Treasury published a DRAFT bill for comment, which covers the first phase and  is to establish the following two regulatory authorities:

• A new Prudential Authority within the Reserve Bank which will be responsible for the oversight of the safety and soundness of banks, insurers and financial conglomerates.
• A new Market Conduct Authority to protect customers of financial services firms, and to improve the way financial service providers conduct their business.

The draft Bill gives the South African Reserve Bank (SARB) primary responsibility to oversee financial stability. Thus, the Bill creates a statutory inter-agency Financial Stability Oversight Committee (FSOC), chaired by the Governor of the Reserve Bank, with financial stability powers.

In the first phase, a few changes will made to existing sector legislation (e.g. the Banks Act), other than re-assigning responsibility for implementation of legislation to the two regulators (e.g. the formal responsibility for the Banks Act is shifted from the Banking Supervision Department to the Prudential Authority).

The draft also creates the concepts of “mono-regulated” and “dual regulated” institutions. Mono-regulated entities are those that undertake activities that only give rise to market conduct regulation (e.g. advisory and intermediary services). Dual-regulated entities are those that undertake activities that give rise to both prudential and market conduct regulation (e.g. banking and insurance).

In the second phase, the existing sectoral legislation (like the example of the Banks Act given above) will be gradually amended or replaced with laws that more appropriately align with the twin peaks framework.

2)   Additional objectives

In addition to creating the two regulators, the other objectives of the Bill are:

• Enhancing coordination and cooperation between regulators

FSOC shall ensure a coordinated and immediate response to risks to the stability of the financial system; a Council of Financial Regulators (“CFR”) will coordinate all regulators, standard-setters and other agencies.

• Balancing operational independence and accountability of regulators

The Bill seeks to strengthen the operational independence and accountability of regulators (within a governmental policy framework).

• Establishing a crisis management and resolution framework

The Bill provides for resolution powers and identifies the Reserve Bank as the resolution authority in South Africa. Nevertheless, the Bill suggests for crisis management decisions to be taken by the Minister of Finance.

• Creating a Financial Services Tribunal and strengthening enforcement

The Bill also establishes a shared enforcement mechanism, the Financial Services Tribunal, which is aimed at encouraging compliance with all aspects of the new regulatory regime.

• Strengthening ombuds schemes

The Bill seeks to strengthen the ombuds system by putting measures in place to enhance public awareness of the ombud system and requiring all financial institutions to be members of an ombud scheme. Among others, FSOC will set norms and standards for ombud schemes including those to ensure the independence of such schemes.

3)   Public comment

Stakeholders are invited for comments on the draft Bill. Written comments should be sent to: [email protected] or faxed to 012 315 5206 on or before 7 February 2014.

Public workshops are planned in January 2013. Details will be communicated in early January and interested persons are invited to submit their contact information to the email address or fax number given above.

[Financial Sector Regulation DRAFT Bill_11 Dec 2013]

[Financial Sector Regulation DRAFT Bill_public comment_Gazette_11 Dec 2013]

Lost in connectivity phrases

The internet is one of the best and most cost effective ways to grow your small business. Know the terms used to describe internet connectivity.

Find following an overview on internet terms and what they actually mean to you and your business, so that you do not get bogged down by the jargon that flies around connectivity.

Wireless Router (Photo credit: Wikipedia)

What does it mean to you and for your business?

• ISP stands for Internet Service Provider. This is a business that sells internet connectivity and services related to it.
• ADSL stands for Asymmetric Digital Subscriber Line. ADSL gives you high speed 24 hour internet access using your current landline telephone.
• VDSL (Very-high-bit-rate digital subscriber line) is faster than ADSL, but it is more expensive and suited to slightly larger businesses, so it is a good term to know for when your small business gets there.
• Bandwidth is the amount of information or data that can be transferred on your ADSL line in a set amount of time. The more information you can transfer in that time, the faster your internet connection.
• Capped ADSL means that there is a fixed limit on the amount of data you can download each month and once you reach that limit you can no longer access the internet. This is particularly useful for a small business with a limited budget that only checks their emails and social media and does the occasional internet browsing.
• A shaped account means that the network gives priority to everyday online activities, such as emails and browsing and is a more affordable option; this is absolutely fine for an average small business that also prioritises those activities.
• 3G uses cellular networks, which means that you can get internet access anywhere there is a mobile network, which can be particularly useful if your business requires you to be away from your office often. 3G can be unreliable and very expensive though, and should only be used when no other option is available to you.
• Wi-Fi uses a wireless network and connects using radio waves and has a relatively short range. Where there is ADSL there is the potential for Wi-Fi, you simply need to connect a wireless router to your modem and set up your network allowing your mobile phone, tablet or laptop to be able to connect to it at no extra cost.

Read even more details on the above in the article on connectivity options.