DURBAN – ALTHOUGH South African banks and consumers faced great difficulties this year, the banking industry’s net sentiment improved by 0.9 percentage points, according to BrandsEye’s annual South African Banking Sentiment Index.
The index showed that sentiment improved to -12.4 percent from -13.3 percent last year.
This is the fifth year that BrandsEye has produced the index. It collected more than 2 million social media posts from consumers about South African banks from September 2019 to August 2020.
BrandsEye chief executive Nic Ray said the banks faced an immense challenge in meeting growing customer service demands on social media.
“Covid-19 has accelerated this preference for digital interactions, and banks will now need to ensure that they are equipped to rapidly identify and respond to these queries. Our findings show that banks who are not able to meet service expectations yield high rates of cancellation threats,” said Ray.
The gap between the banks’ individual net sentiment scores reduced this year. The convergence of scores was linked to the conclusion of Nedbank’s Global Citizen campaign, which was largely responsible for its strong 2019 score, and improvements in the scores of both First National Bank and Standard Bank.
According to the index, banks failed to respond to 47.3 percent of customer requests as the demand for support grew during Covid-19.
“With the influx of customers seeking assistance on digital channels, banks struggled to keep up with the demand for support on social media. Some 47.3 percent of priority customer conversation on social media went unanswered by the banks. Despite receiving early praise from customers for their initial commitment to help South Africans with relief efforts, sentiment towards new Covid-relief programmes quickly declined as the rollout plans drew significant complaints,” according to the report.
Nedbank and African Bank were the two most responsive banks, while Discovery Bank’s customers were the least likely to receive a reply on Twitter, with the bank replying to only one out of every 10 priority interactions.
According to the findings of the index, thousands of these complaints were made on social media, 90.7 percent of which contained Treating Customer Fairly (TCF) themes.
“Overall, this should be alarming for the industry who are missing out on considerable volumes of important customer interactions and are therefore unlikely to have been reporting on them for regulatory purposes. As such, they risk facing heavy fines from the regulator as well as the significant reputational risks that such sanction would generate,” the index found.
Ray said that in addition to the pressures of growing digital demand, the Financial Sector Conduct Authority (FSCA) published its final Banking Conduct Standard, enforcing adherence to TCF conduct outcomes and requiring banks to report accurately on complaints, including complaints made via social media.
African Bank claimed the top spot with successful customer acquisition campaigns as it received almost four times as many purchase enquiries from prospective customers, relative to the industry average. More than half of these requests was attributed to the bank’s successful advertising – in particular, loans offering small sums for the purposes of “tiding (consumers) over during tough times”.
The bank’s successful financial performance since its 2016 restructuring also drew significant praise.
Discovery Bank had the lowest response rate and the highest proportion of customers threatening to quit on social media.
Discovery Bank was the worst performer in the industry, with 76.7 percent of customers threatening to leave the bank because of its slow turnaround time.
Nedbank suffered a dramatic decline in net sentiment, shedding 32.9 percentage points to a six-year low. Its net sentiment fell from an industry-leading 20.4 percent last year to -12.5 percent in 2020. This could be largely attributed to the conclusion of the successful 2019 partnership with the Global Citizen movement, which contributed significantly to its 2019 performance, the index found.
Capitec remained the most consistent incumbent bank. Since 2015, Capitec has held the first or second position in the index. In 2020, it was the incumbent bank with the highest net sentiment, driven largely by the bank’s affordability.
Capitec, however, also experienced a net negative sentiment, because of the unreliability of its app.
The FSCA’s divisional executive of regulatory policy, Caroline da Silva, said the high volumes of conduct-related complaints on social media were of concern to the FSCA.
“The industry must pay close attention to digital complaints, noting as monitoring social media would help banks identify the root causes of complaints and ensure that their customers do not have repeat issues in future. This will, in turn, improve overall conduct and help them deliver fair outcomes for their customers,” said Da Silva.