These are the findings of the South African Banking Sentiment Index 2019 published by BrandsEye on November 11.
The index draws on 1.9mn social media mentions of South Africa’s five major banks, Absa, Capitec, FNB, Nedbank and Standard Bank, for the year to the end of August.
- The index also analyses social media reaction to new entrants Bank Zero, Discovery Bank and Tyme Bank for the first time.
Standard Bank had the lowest score for customer service, largely a result of branch closures, the report finds. It had the highest proportion of customers who threatened to leave while also citing other new destination banks.
- “Consumers are sensitive to the conduct of their financial service providers, particularly when they feel they, or other consumers, have been unfairly treated,” the report argues. Banks need to “address conduct issues before they are raised with regulatory authorities.”
FNB and Capitec were most often cited as preferred alternatives when consumers threatened to leave.
Capitec had the best customer experience rating after reducing its fees this year and is the clear leader in “perceived value.”
Not just cost and service
Nedbank’s increased popularity was driven by its corporate social investment (CSI) initiatives, and its partnership with Global Citizen, the report says.
The bank, which had had the best score for ethics and reputation, has been working with the Nelson Mandela Children’s Fund to address poverty in South Africa since 2005.
According to research from Consulta in March, South African banks overall are “very poor” at tackling the recurrent causes of complaints.
- “The lack of root cause identification and management of complaints has a direct correlation to customer loyalty, and given the new entrants in the market, warrants strong attention,” Consulta says.
- The fact that 25% of bank customers have indicated very low satisfaction levels and so low levels of loyalty is a “red flag”, Consulta says.
These customers are a “soft target” for the new competitors, it argues.
Consumers are “generally more positive” towards the new entrants compared with incumbents, the BrandsEye report says.
- “This suggests that there is a receptive market for alternative banking options”.
Still, the report says that positive sentiment for the newcomers is likely to decline as they go through the painful process of becoming fully operational.
But, BrandsEye says, if they can get over that hump, they are likely to cause “significant disruption” to the established players.
Bottom Line: If the big players can’t address the concerns of their customers, the new kids on the block are likely to do it for them.
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