“The impact of maintenance fees on students’ willingness to maintain bank accounts and establish credit profile”

The purpose of this article is two-fold: to investigate how recurring maintenance fees levied on students’ accounts impact on university students’ willingness to maintain bank accounts and therefore begin creating the necessary credit profiles. Credit profiles provide financial history that is useful for banks and other lenders to evaluate clients’ credit worthiness. Many students in South African universities are ignorant of this requirement and usually make choices detrimental to their accessing current and future financial products. The banks’ service quality and students’ expectations need to be harmonized at some point. The study was exploratory in nature, using expressive statements on banking costs to expose common causes of financial burden, the best and worst case scenarios of utilizing banking products including benefit accrual from their use. Pre-intervention data was collected using questionnaires N=60 conveniently sampled financial management students. The post-intervention data was collected from the same students N=55 using similar questionnaires where five students did not show up. The study also assessed financial management tutorial influence on students’ decision making after being exposed to banking market demands and their costs. SPSS was used to analyze data collected. mainly university students operating with limited resources. Loyalty prospects can surpass immediate recovery derived from maintenance fees.

The study was exploratory in nature, using expressive statements on banking costs to expose common causes of financial burden, the best and worst case scenarios of utilizing banking products including benefit accrual from their use. Pre-intervention data was collected using questionnaires N=60 conveniently sampled financial management students. The post-intervention data was collected from the same students N=55 using similar questionnaires where five students did not show up. The study also assessed financial management tutorial influence on students' decision making after being exposed to banking market demands and their costs. SPSS was used to analyze data collected.
Cheaper once-off cardless services were found to be popular with students receiving money, citing its reasonableness and depositor charger rather than recipient shouldering transaction costs. Students confirmed their satisfaction with saving costly recurring bank account maintenance fees, earning 0% interest on credit balances. Bank account holders increased in post-intervention compared to pre-tutorial with better understanding of client's profile value for accessing credit. Other students remained reluctant to maintain bank accounts despite future economic benefits. Bank account maintenance fees discourage students from maintaining bank accounts. Maintenance fees may aid banks user cost recovery but losing clients to competing cheap cardless products may be more costly.
The study contributes to relationship management in banking sector. Research debate focused on bank selection criteria based on established key quality factors and service. Little scholarly investigation exists on reasons for annulling bank accounts, replaced with once-off cardless services that is gaining popularity with university students over maintaining bank accounts. Highlighting what is critical to students, the paper may influence banks policies and developers to design innovative products suitable for university students market. Affordability and incentives are key attraction points for clients, mainly university students operating with limited resources. Loyalty prospects can surpass immediate recovery derived from maintenance fees.

BUSINESS PERSPECTIVES
LLC "СPС "Business Perspectives" Hryhorii Skovoroda lane, 10, Sumy, 40022, Ukraine www.businessperspectives.org The impact of maintenance fees on students' willingness to maintain bank accounts and establish credit profile INTRODUCTION It is increasingly becoming necessary for university students to understand and participate in financial markets, which may be initiated with maintaining bank accounts in order to access certain banking services, receive allowances and begin the culture of saving a portion of their income. In addition, students need to kick-start their relationships with banking institutions while still studying in order to understand their practice and continue its use, which will be required once they enter the job market. There is, however, limited evidence that addresses the reasons for students' reluctance to commit to maintaining a bank account with one of the banking institutions.
Banking institutions would ordinarily want to recover the costs of maintaining a bank account from the user, even though this may have unintended consequences for future client relationships adversely affecting their future prospects. It has become necessary for banking institutions to understand students' behavior and attitudes in order to inform the development of attractive financial products and for retention strategies.
Cardless services are financial products allowing once-off deposits and receipts of banking services, equivalent to using cash, mainly used by the poor as channels to deliver and exchange money from one person to the other (Lehman & Ledgerwood, 2013). These services are accessible at Computicket, E-wallet and Blue-wallet and others, enabling senders, by paying a minimum fee, to deposit money for the benefit of anyone with a registered mobile number in South Africa, whether or not the recipient possesses a bank account. A reference number would be send to the recipient's mobile number, which they must punch in to withdraw the sent money. Dauda and Lee (2015), Mas and Rotman (2008) explain these electronic wallets as transactions carried out off-line, eliminating the direct involvement of financial intermediaries together with their burden of high fixed costs of debit and credit cards. Recipients can avoid Automatic Teller Machine (ATM) and all card management costs (Bhosale & Sawant, 2012). Even though South Africa's banks offer cardless services, they remain detrimental to both students (creating no profile to access financial products) and the banks' desire to attract and retain clients (contradicting clients' attraction and retention strategy), as the once-off services require no recipient commitment once the money is collected. Banks' participation in providing cardless services is self-defeating.
While banks cannot guarantee the clients' reuse of their service, the absence of a bank account offers no financial database, meaning that recipients are far away from building a profile that can attest to their financial behavior. It also means the students who prefer to use the cardless service would be exposed to unfavorable credit evaluation if needed. It is important for banking institutions to understand and cater for the diverse under-serviced university students market for their strategic planning to be realistic. The reality is that the service comes at a cost, as clients' attraction costs are higher than those of retaining and selling services to existing clients (Driggs, Ramsey, & Nunes, 2006;Ogechukwu, 2012). Attracting university students would be even more expensive, as banks would depend on the prospects of these students becoming their future clients, requiring patience and futuristic strategies of sustaining business interest. Driggs, Ramsey, and Nunes (2006) reiterate that attracting customers and retaining their loyalty must be treated like team sport, with vital roles such as product development, marketing, pricing, sales and service pulling in the same direction. The question should not be whether or not to do it but how (Seelos & Mair, 2007).

The objective and significance of the study
The study's objective is to explore whether or not the recurring maintenance fees charged to students' bank accounts encourage or discourage their willingness to maintain bank accounts to begin building their credit profile. It intended to understand the reasons for university students' option for cardless services or cash transactions over maintaining a bank account. The general assumption is that cardless services or cash transactions are once-off and cheap, however, they may cost the students' current and future inclusion in the financial market.
It is important to understand how recurring maintenance fees levied on university students' accounts impact on their willingness to maintain bank accounts, serving as stepping-stones towards building the necessary credit profiles. Credit profiles are sources of financial records referred for use by banking institutions to judge clients' creditworthiness at the time when accessing financial products is needed. It is important to identify ways to convince students to initiate minimal participation in financial markets while still studying. Other financial products would be gradually introduced to orientate and build shock absorbers for greater services access once students become financially independent. At some point, the banks' service quality and students' expectations need to be harmonized, which was addressed through a series of personal financial management tutorials.
The study also assessed tutorial impact after exposing students to financial market demands, their costs including the best and worst case scenarios influenced by clients' knowledge level when utilizing banks' products. The tutorial addressed students' banking services perceptions, the significance and abilities to building credit profiles, budgeting and saving techniques. The trend is for students to start engaging with financial products access when they are financially independent, but this might be overwhelming, as many leave universities with education debt burdens, believed to be for a worthy course (Porter, 2002;Long & Riley, 2007). The burdens impact negatively on a person's budget and credit ratings carried into adulthood. Unfavorable credit rating further excludes students from accessing financial services or if allowed to access the service, it will be offered at an inflated price.
SA's tertiary students should not be left trailing behind their peers who already enjoy extended benefits such as those in Kenya and other countries who have benefited from reduced fees or free maintenance students accounts. Students in Australia and United Kingdom enjoy benefits like maintenance fees exemption, earn additional interest incentive on their credit balances/savings, can access minimal interest free loans and credit cards services unique to tertiary students accounts (Choe, 2009). The banks in these countries absorb the costs of recurring maintenance fees and other incentives to attract and retain students with the hope of establishing loyalty of customers with potential to earn high income (Njiri, 2016). The graduate clients have potential to bring high returns and increased business for the banks. These kinds of benefits are minimal in SA, and students' access to most financial products normally requires collateral provision from parents or some financially independent person.
Generally students perceive bank account maintenance to be more punitive than beneficial. Greater concern was raised with the expectation to pay monthly fees irrespective of use and the absence of incentives. Credit balances earned 0% interest, which discourages students from savings. The banks' lack of incentives and costlier maintenance fees mean students are better off without the service, making cardless services more sensible, given students' financial situation. Such choices, however, have longterm detrimental effects on the students' future access and participation in the banking markets. The paper is a part of a larger research project addressing students' financial knowledge, financial markets participation and the motivation to save.
The study intends to bridge the gap between students expectations and banking institutions processes by aligning both parties' strategic positioning to identify value in each other's support.

LITERATURE REVIEW
SA's youth population below the age of 25 years is estimated at 52%, placing the country at a good future position compared to other developed countries dominated by ageing population adversely impacting future plans and burdening state healthcare and support system (Mkalala, 2016). The very youth is facing the plight of unemployment and lack of opportunities averaged at 63% in SA and young graduates struggling to find suitable work with many competing for what is considered minimum wage (Mkalala, 2016). Without regular income, students will automatically fall short of meeting the bank's demand for recurring maintenance fees. What will become SA's future when more than half the population is excluded from active participation in banking institutions or, as it is, have little understanding about how they function? These constitute a generation that must take up the baton from the current management as the country's economic custodians. The vast majority of students rely on their adult family members or guardians to access banking services, because the financial markets are focusing more on adults and less oriented towards the needs of the youth, the majority of whom are university students.
A Standard Bank manager (Dr Molapo) advocates that bankers should think like fleet managers to go above and beyond client expectations (Molapo, 2016). He directs leaders in the field to listen carefully to the needs of the client and be willing to innovate constantly. It has become necessary for banking institutions to understand students' behaviors and attitudes in order to inform the development of attractive financial products and for retention strategies. There is, however, little evidence that addresses the reasons for students' reluctance to foster lasting relationships with banking institutions. Research debate has focused on bank selection criteria based on established key quality factors in banking such as service, proximity, attractiveness, recommendations, marketing and pricing ( . In order to judge service quality, the person should have been a bank client or willing to foster continuous relationships even when they hop from one bank to the other, attracted or detracted by incentives offered. The debate neglects to investigate the reasons for annulling bank accounts, where once off cardless services are gaining popularity with students over mutual and enduring banking relationships maintaining bank accounts.

The benefits of maintaining a bank account
Every bank, like any other business, is dependent on its ability to attract and retain clients for its survival in the market. On the other hand, clients must perceive reciprocal participation that is worthwhile and yielding benefits greater than those which accrue from non-participation (Ennew, 1996). The extent to which both parties participate in a relationship impacts on overall satisfaction and customer retention (Ennew, 1996). More often than not, bank switching or entry and exit are caused by disillusionment in that such decisions will still have an adverse impact on the objectives of banking. Consequently, such decisions also adversely affect client satisfaction, specifically with fee pricing issues and lack of incentives (Nordman, 2004 University students fit the profile of those exposed to exploitation risk, as the majority of them are financially illiterate, together with the families they come from. Financially excluded and illiterate families struggle to expose their growing children to financial matters, when they are not informed themselves (Atkinson & Messy, 2013). Personal finance education and financial services are the least included in undergraduate university programs, more so in developing countries than developed countries (Sabitova, 2014). The lack thereof is det-rimental to the individual's social and economic well-being, including the personal relationships. It would thus be imperative for students to learn and develop healthy credit profile in order for them to access affordable credit, the benefits of which could filter through to their families and friends.

Barriers to banking services access
Large price increases might motivate consumers to use fewer products or shift to another brand, discounted prices are mostly the reason for consumers' choices (Litman, 2004). Poor services, high bank fees and failure to appreciate student needs are arguably three major factors frustrating customers (Thwaites & Vere, 1995). Students are famous for being extremely sensitive to prices; their displeasure can cause huge consumption pattern changes (Litman, 2004).
Developed financial system was found to reduce poverty and income inequality instead of the usual capitalist enterprise's focus on handing over their largest possible profit to capital owners (Claessens, 2006). Lowering or eliminating maintenance fees and paying incentive could be a strong motivation to save, because households in developing countries often cite high fees as a reason for not saving in bank accounts (Meyer, Zimmerman, & Boshara, 2008). If not saving in bank accounts where else would they save? It is thus necessary for banks to nurture relationships commencing from the time students are still studying, otherwise they risk losing them permanently.

The dilemma of the poor and unemployed
A high percentage of low-income households in developing countries are without bank accounts with an even higher number of those below average incomes such as those living in Mexico City and United States having no relationships with banks together with access to saving avenues (Djankov, 2008

How large is the cost of cash transaction?
The uneducated and poor stay unbanked, as keeping a bank account is expensive for their infrequent financial transactions, even though informal sector is expensive in the long run (Djankov, 2008). Being unbanked means clients are excluded from paying online, but their transaction still means the hassle of standing in long queues to deposit money into the suppliers' bank account, then send fax or scan and forward payment proof. This informal sector is costly with procedure and time consuming to perform a transaction. Furthermore, many suppliers, lately, charge additional fees to be included with cash deposits in order to recoup the cash handling fees usually charged by banks. All these costs are eliminated with electronic transfers, which are possible with maintaining a bank account.

THEORY OF RELATIONSHIP QUALITY AND PROFITABILITY
According to Nordman (2004), the theory provides the foundation for considering and understanding the world. Service quality and customer satisfaction (product offer and meeting customer needs) connect service management with its notion of perceived service quality to relationship marketing, achieved with satisfied employees and customers (

RESEARCH METHOD
A mini survey was conducted in a class of university students composed of those registered for business finance and some others registered for personal finance for their degree qualifications. The group was conveniently sampled supposing these students would be conversant with the banking market practice.
The researcher administered questionnaires collecting primary data pre-intervention from a population size of N=60 at the beginning of the semester. She then conducted a two day non-examinable Personal Finance tutorial with these students. The tutorial covered income sources, budgeting, spending and savings, debt and the credit profile role when accessing and negotiating financial deals. It included expressive material such as statements displaying debt costs and penalties (omitting owner's identity) and how to avoid them. These exposed the common causes of financial burden, which can taint borrower's image.
After the tutorial, the students were mandated to experiment with banking market function and its demands. At the end of the semester, post-intervention data were collected from the same group N=55, because five students of the pre-intervention group were absent when post-intervention data were collected. Students responded to questionnaires similar to those used in pre-intervention. SPSS was utilized to analyze the data.

RESULTS
The demographic information was intended for research population classification and their age ranges, because students' bank accounts are categorized according to age, separating high school pupils from tertiary students. The demographic information was, however, not used for distinct analysis in the study (See Appendix A).

DISCUSSION
More than half of the student sample prefer to use cash transactions and cardless services to receive allowance money. The situation, however, improved in post-intervention. In post-intervention, more students understood the value of building a credit profile, but some remained negative to maintaining a bank account, as they felt it was expensive. Little is known about building a credit profile to enable access to bank products. Students with the slightest idea of its significance assign the responsibility to the older generation, hoping to establish their own at the time of their financial independence.
The impact of the absence of a bank account and the credit profile would be felt more in post schooling period when the need to acquire expensive items such as properties and cars exist. Simple services such as renting a car from the rental companies would be next to impossible with cash transactions. It would mean students must postpone such acquisitions and needs until such time that a convincing profile has been created. Alternatively, students will have to settle for unfavorable financial market terms, as they will be regarded as high risk clients or use the services of a third party meeting the requirements to acquire the service on their behalf.
Drawing a budget was almost non-existent in preintervention; however, it improved in post-intervention. Another concern is from those who actually draw a budget, but were failing to stick to what they have planned. Students seem to be less motivated to save with overall scores far below average than adult. The limited avenues for saving small sums of money may be the causes of discouraging the students from such practice. More must to be done to improve students' willingness to maintain bank accounts and develop the culture of saving irrespective of the allowance amount received. Hopefully, the banking institutions would make it worth while for the students' by rewarding their saving efforts.

MANAGEMENT ІMPLICATIONS
Majority of SA's tertiary students do not understand financial management and neither are they financially savvy. It may be the reason for their sometimes unrealistic expectations and demands.
Conceivably they have been judged through the lens of adults "failing to serve them fast, make the service fun and more favorable" (Motlhabane, 2016). Banking services have been created with the adult in mind and students must just fit in and choose from what is offered.
Standard Bank's cheapest students' account, charging no maintenance fees within prescribed limitations, is hardly known to students. The product value is eroded, as students tend to generalize their perceptions about the banks. Marketing variety of financial products and costs is not only needed to complement product developments (Dauda & Lee, 2015), but also requires going beyond selecting the relevant medium for the target market. Secured and easily accessible technologies to students' remote campus are the latest trend instead of ATMs and fancy branches suitable for the older generation and less appealing to students. The free Wi-Fi access that is common with university campuses could assist in convenient electronic banking rather than focusing on branch locations, which is potentially inaccessible and probably not attractive to students.
Perhaps tertiary students are judged through the lens of adults who have completely different abilities and needs. Even though students have limited or no resources, they still require that the banks cater for their unique needs to be worth having and that the relationship can be kept for longer periods.
The least number of students are satisfied with the service quality they receive from banks. Students are neither satisfied with features, benefits and the period they need to wait before they can be served at the bank branches. Their peers' preferential treatment paying a fraction or no maintenance fees in other countries does not go unnoticed. This means SA students are not only lagging behind, but also they are excluded from accessing services such as loans without the assistance of an adult or someone who is financially independent. They feel the maintenance fees on their accounts are unfair, as they are regularly charged whether or not the account has been utilized. In the absence of alternatives to student accounts, cardless services will continue to grow and so will be the exclusion of university students from banking services.
Offering cardless services is a necessary service, seeing that less and less students maintain a bank account, however, the service can be self-defeating to both parties and threatens the objective of banking institutions' ability to attract and retain clients, including university students. The current focus of quality service and development may not necessarily be water under the bridge, as long as it can be presented in the manner that is appealing to students distinct from adult products and services. The current banking institutions' format of one size fits all quality dynamics, and upgrades would detract more students than attract them.

Further studies
Further studies could be undertaken with students in urban universities to assess how account maintenance fees impact on the university students' willingness to maintain bank accounts. Urban areas and branches in big cities usually have above average services benefits resulting from the large market size, collective bargaining power and increased competition. Such collective power is lacking in semi-rural areas such as the one under study.

CONCLUSION
Much as SA's financial and banking markets place more emphasis on credit profile and security to access financial products, few students can provide it. Their level of ignorance regarding credit profile importance in the financial markets is usually exposed when access to financial products is denied, because the students do not have a solid profile. The students may be cushioned by parents and guardians in accessing financial services and products on their behalf. Without the minimum required knowledge, the students would neglect managing their financial obligations or overcommit themselves, thus putting the very parents' and guardians' interest in jeopardy.
Cash transactions are also becoming more and more expensive. Other than being an inconvenience to handle large sums of money, banking services would still be required to acquire expensive resources. The absence of a credit profile would be felt more in post schooling period when the need to acquire expensive items such as properties and cars exists. It would mean students must postpone such acquisitions up until such time that a convincing profile has been created. Alternatively, students will have to settle for unfavorable credit terms, as they will be regarded as high risk clients.
Few students draw a budget which improved in post-intervention in the current study. Less of those who were budgeting stuck to the drawn budget out of those who said they do actually draw a budget. Other factors may be contributing to the students' inability to stick to the budget, a subject that may be elaborated further in another study. The worrying factor is the low levels of saving, meaning there is a lack of motivation to save among the students community. More must be done to improve the willingness to save irrespective of the allowance amount. The banking institutions would hopefully avail incentives that will be worthwhile for the students' effort to save.

RECOMMENDATION
Service costs and desirable product variety is critical for students' attraction and retention to replace obsolete products and their costs. To students, every cent counts thus the benefit of cardless services can be incorporated into formalized bank account holding in order to retain their continued usage. Understanding students' needs will help banks in meeting their expectations for the benefit of both parties (Chigamba & Fatoki, 2011).
The products design must enable students to earn points for meeting obligations timeously, and then qualify for additional products introduced gradually. Credit balances and continued savings need to be incentivized with interest earnings. Maintaining savings over time must also earn additional points to be utilized for favorable bank deals. The example may include higher interest earnings on savings.  Note: a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 9.45; b. computed only for a 2x2 table.