Fed up banking customers unhappy with ethics, pricing, slow customer service
Companies / 11 November 2019, 2:00pm / Sizwe Dlamini
CAPE TOWN – Nedbank had the highest Net Sentiment for 2019, according to BrandsEye's 2019 Banking Sentiment Index, which analysed 1.9 million social media posts about South Africa’s largest banks.
Nedbank’s rise was driven by its successful corporate social investment initiatives. The partnership with Global Citizen significantly improved the bank’s overall performance.
Capitec placed second and is the only bank to continuously maintain a positive Net Sentiment Score over multiple years, according to the index. Capitec had the best customer experience performance. This suggests that consumers still perceive Capitec to have the best operational performance.
Absa placed third, with a five-point decline from 2018 and Standard Bank placed fourth, continuing its three-year decline in sentiment (23 percentage points since 2017).
Standard Bank performed poorly across both reputational and operational measures - having had the worst customer experience sentiment and the second worse reputational sentiment.
FNB had the largest decline in Net Sentiment of -27 points and had the lowest overall Net Sentiment. FNB was impacted by several reputational events throughout the year, which led to it scoring the lowest Net Sentiment.
Under pressure consumers are even more fed up with their banks in 2019, finds BrandsEye. BrandsEye's 2019 Banking Sentiment Index, analysed 1.9 million social media posts about South Africa’s largest banks and included an analysis of 68 500 posts about the new entrants, Bank Zero, Discovery Bank and Tyme.
Allegations of unethical conduct hurt banks
Absa, FNB and Standard Bank were implicated in several ethics-related issues that negatively impacted their sentiment, namely:
allegations by Emerald van Zyl of discrimination against black clients
the Bankorp bailout case and investigations into the Public Protector’s personal bank account
allegations of historical involvement in rand fixing by Absa
FNB’s “free money” incident
the conversation about retrenchments and branch closures in the industry
Increase in fraud sparked distrust
There was a 105 percent year-on-year increase in conversation about fraud, corruption and scams across the industry. Much of this conversation centred on unauthorised debits and measures banks took to counter this fraud.
“This finding is in line with the Ombudsman for Banking Services’ latest report, which showed that 50 percent of complaints in 2018 centred on fraud”, said Lara Sierra Rubia, Head of Analytics at BrandsEye.
Affordability and usability behind Capitec’s growing loyalty
Capitec was most positively compared to other banks. Affordability remains the key point of positive comparisons. This was largely driven by the announcement that the bank would reduce its fees in 2019, which resonated with a price-sensitive consumer base, according to the report. “The introduction of cash sends ensured that withdrawals and deposits became a primarily positive point of comparison in 2019.”
New entrants face a first real test in 2020
The report states that the response to Discovery Bank’s launch was underwhelming, this was driven by complaints about the launch delays and onboarding issues with existing Discovery clients. “Discovery’s announcement in November 2018 that 10 percent of the bank’s shares will be given to black depositors was not welcomed by all consumers and drove a significant decline in sentiment. Tyme performed well with growing awareness and improving sentiment post-launch. Positive sentiment for Bank Zero was driven by engagement with the bank’s co-founder, Michael Jordaan.”
BrandsEye SA chief executive, Nic Ray saidthe excitement that paved the way for their long-awaited arrival would likely be tempered by growing service requests and complaints as the banks onboard new customers. “The key challenge will be maintaining a positive customer experience as they scale their customer base and switch on new products and services.”
When consumers threatened to leave their banks, FNB and Capitec were most often cited as a preferred alternative. Meanwhile, churning Standard Bank clients most frequently cited other banks in their threats, according to the report.
Banks face new pressure to find and respond to the most important conversations
“South Africans are increasingly directing their complaints and service requests to the social handles of their banks as they seek to publicly out the bad service they have received or speak directly with their bank.
“Banks will need to introduce systems that allow them to find, prioritise and resolve the most important customer interactions from the rest of the noise on social media. Those that can adopt this approach stand to gain in loyalty and optimise retention. Those that do not can expect to see their clients switch banks.” said Ray.