Kenya: M-Pesa beats most traditional banks on customer sentiment, survey finds

By David Whitehouse
Posted on Tuesday, 30 August 2022 06:00

A customer sets up an M-Pesa account.
A customer sets up an M-Pesa account. Reuters/Thomas Mukoya

Safaricom’s mobile money platform M-Pesa is perceived more positively than traditional banks in Kenya, according to the Kenya Banking Sentiment Index published in August by DataEQ in collaboration with Deloitte.

DataEQ tracked 330,000 Twitter posts mentioning Absa, Co-operative Bank, Diamond Trust Bank, Equity Bank, Kenya Commercial Bank, NCBA Bank and Stanbic in 2021. A sample of the posts was analysed and each one was ranked as either positive, negative, or neutral.

Negative sentiment slightly outweighed positive sentiment for M-Pesa, resulting in a -1.0% net sentiment score for 2021. The score compared with an overall net sentiment score of -7.6% for the banking industry. That was despite the fact that social media conversation about M-Pesa jumped by 116% from 2020 to 2021.

Digital experience was a leading feature of consumer conversation across the industry, driven by system outages and app downtime. This “left consumers unable to complete critical transactions, with many expressing a loss of confidence” as a result.  These downtime spikes often coincided with month-end when many routine monthly transactions are carried out. “Customer service was a major pain point across the industry,” the survey said.

  • When multiple transaction channels fail at the same time, consumers are left feeling “helpless and frustrated”.
  • “Considering that over half of Kenya’s entire GDP is now transacted through M-Pesa, these instances of downtime pose a significant risk to the Kenyan financial sector,” the survey said.
  • There were some concentrations of negative comment about M-Pesa’s loans, transaction fees and system downtime, “suggesting opportunities for other players in the mobile money market,” the survey said.

Absa leads, Equity Bank lags

Absa achieved the best net sentiment score of 12.7%, with the second-highest performer, Co-operative Bank, on plus 2.6%. These were the only two banks to achieve positive sentiment scores. Absa’s performance was driven by reputational efforts like Corporate Social Investment (CSI) initiatives, partnerships for employment and new technology, the survey said.  Co-operative Bank and Diamond Trust Bank scored positively on pricing net sentiment, helped by zero-monthly fee accounts, prepaid student cards and discounts.

Equity Bank had the worst net sentiment, with a negative score of -20.1%. The “net sentiment” score is built using operational and reputational conversations. Equity was harmed by having the lowest operational sentiment rating, with customers complaining about slow turnaround time for service requests. Still, in terms of social media responsiveness, Equity was the best-performing bank, responding to 80% of “priority” tweets despite having the industry’s highest volume of priority conversation.

The country’s incoming government will be faced with multiple challenges such as rising national debt, inflation, and unemployment, says DataEQ analyst Thabo Mofokeng.

  • He sees an increased consumer appetite for credit creating opportunities for micro-lenders, digital banks, and mobile-money providers to tap into Kenya’s unbanked market.
  • Traditional banks need to compete with these new entrants to retain their market share, Mofokeng says. “Affordability and access will remain a critical success factor in retaining and acquiring new clients.”

Bottom line

Kenya’s banks have some way to go to convince customers that there services are reliable.

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