The need for a financial sector survey stems from the fact that the financial sector’s contribution to GDP has increased significantly over the last few decades and information on the sector’s performance is published with long time lags and is incomplete. The business tendency surveys of only a few countries currently cover the financial sector.

1. Conducting Financial Sector Surveys in
South Africa
George Kershoff
Deputy Director
Bureau for Economic Research (BER),
Stellenbosch University, South Africa

2. Overview
1. The need for a financial sector survey
2. The survey method
3. The validity of the results

3. The need for a financial sector survey
 To improve the coverage and cyclical
characteristics of business tendency surveys
(BTS)
 To produce timely and consistent
information on the performance of firms in
the financial sector

4. The survey method
1. The international experience
2. Sample design
a) Target population
b) Sampling method and panel creation
c) Sample size and representativeness
3. Questionnaire
4. Processing of the results
a) Weighting
b) Treatment of non-responses

5. The international experience
 BTS coverage expanded to the other service
sectors, but not the financial sector.
 Why not?
 Few firms
 No reference series of an invisible activity

6. The target population
Unive
Panel
rse
Transac- Private banking, micro-lending, retail
Retail banks tional banking, business banking, corporate 33 15
banking banking, asset & fleet financing
Investment Financial Corporate finance, private equity,
market project finance, treasury, stock 49 11
banks broking
activity
Investment Institutional (pension), retail (unit trust) and
64 31
managers private client business
Individual life and group life & employee
Life insurers 21 12
benefit business
Short term
General insurers 16 8
insurers
Total 183 77

7. The target population
Unive
Panel
rse
Transac- Private banking, micro-lending, retail
Retail banks tional banking, business banking, corporate 33 15
banking banking, asset & fleet financing
Investment Financial Corporate finance, private equity,
market project finance, treasury, stock 49 11
banks broking
activity
Investment Institutional (pension), retail (unit trust) and
64 31
managers private client business
Individual life and group life & employee
Life insurers 21 12
benefit business
Short term
General insurers 16 8
insurers
Total 183 77

8. The target population
Unive
Panel
rse
Transac- Private banking, micro-lending, retail
Retail banks tional banking, business banking, corporate 33 15
banking banking, asset & fleet financing
Investment Financial Corporate finance, private equity,
market project finance, treasury, stock 49 11
banks broking
activity
Investment Institutional (pension), retail (unit trust) and
64 31
managers private client business
Individual life and group life & employee
Life insurers 21 12
benefit business
Short term
General insurers 16 8
insurers
Total 183 77

9. The target population
Unive
Panel
rse
Transac- Private banking, micro-lending, retail
Retail banks tional banking, business banking, corporate 33 15
banking banking, asset & fleet financing
Investment Financial Corporate finance, private equity,
market project finance, treasury, stock 49 11
banks broking
activity
Investment Institutional (pension), retail (unit trust) and
64 31
managers private client business
Individual life and group life & employee
Life insurers 21 12
benefit business
Short term
General insurers 16 8
insurers
Total 183 77

10. The target population
Unive
Panel
rse
Transac- Private banking, micro-lending, retail
Retail banks tional banking, business banking, corporate 33 15
banking banking, asset & fleet financing
Investment Financial Corporate finance, private equity,
market project finance, treasury, stock 49 11
banks broking
activity
Investment Institutional (pension), retail (unit trust) and
64 31
managers private client business
Individual life and group life & employee
Life insurers 21 12
benefit business
Short term
General insurers 16 8
insurers
Total 183 77

11. The target population
Unive
Panel
rse
Transac- Private banking, micro-lending, retail
Retail banks tional banking, business banking, corporate 33 15
banking banking, asset & fleet financing
Investment Financial Corporate finance, private equity,
market project finance, treasury, stock 49 11
banks broking
activity
Investment Institutional (pension), retail (unit trust) and
64 31
managers private client business
Individual life and group life & employee
Life insurers 21 12
benefit business
Short term
General insurers 16 8
insurers
Total 183 77

12. Sampling method and panel creation
 Compiled a sampling frame / business register
 The response units = head of business units
(kind-of-activity units)
 Purposive (non-random) sampling
 Establish a fixed panel

13. Sample size and representativeness
 Panel vs. universe
 Number of firms
 Size of firms
 Response rate
 Importance of the representativeness of the
sampling units of a qualitative survey vs. that of
a quantitative survey
 Ordinal scaled data
 Missing at random assumption

14. Questionnaire
 Compare SA, UK and Swiss questionnaires
 Customised per sector
 Length
 Variables covered in all surveys and countries

Rating of the overall business situation

Change in income

Change in employment

Change in profitability

15. Processing of the results
 Firm, sector and sample weights
 Treatment of non-responses
 Revisions

16. The validity of the banking survey
results
 Compare the survey data (in net balance
format) and the corresponding quantitative data
(calculated as year-on-year growth rates)
 Draw charts to see how closely the lines and
turning points fit
 Calculate the correlation coefficient
 Log transform the data to provide for non-linearity, a
not normal distribution, different formats and outliers

17. Operating expenses Investment income
90 25 100 250
80 80 200
70 20
60
150
60
40
% ch YoY
% ch YoY
15 100
50
Net %
Net %
20
40 50
10 0
30
0
20 5 -20
10 -40 -50
0 0 -60 -100
02Q1
02Q3
03Q3
04Q1
04Q3
05Q3
06Q1
06Q3
07Q1
07Q3
03Q1
05Q1
03Q1
03Q3
05Q3
06Q1
07Q3
02Q1
02Q3
04Q1
04Q3
05Q1
06Q3
07Q1
Survey (lhs) SARB (rhs)
Survey (lhs) SARB (rhs)

18. Operating expenses Investment income
90 25 100 250
80 80 200
70 20
60
150
60
40
% ch YoY
% ch YoY
15 100
50
Net %
Net %
20
40 50
10 0
30
0
20 5 -20
10 -40 -50
0 0 -60 -100
02Q1
02Q3
03Q3
04Q1
04Q3
05Q3
06Q1
06Q3
07Q1
07Q3
03Q1
05Q1
03Q1
03Q3
05Q3
06Q1
07Q3
02Q1
02Q3
04Q1
04Q3
05Q1
06Q3
07Q1
Survey (lhs) SARB (rhs)
Survey (lhs) SARB (rhs)

19.  Correlation
 High (80%): investment income, non-interest income
 Medium (40%): total income, operating expenses,
employment
 Compared to other countries and surveys

20. The way forward
 Produce a reference series
 Fine tune weights and method of substitution