While there has been a slight improvement in sentiment towards the country’s major banks on social media, nearly half of “priority conversations … which require the banks’ attention and action … have gone unanswered” in the last year.
This is according to BrandsEye, which tracked 2.5 million consumer social media posts (on Twitter and Facebook) about African Bank, Absa, Capitec, Discovery Bank, FNB, Nedbank and Standard Bank from September 2019 to August 2020.
This is the fifth year BrandsEye has produced its annual South African Banking Sentiment Index. It says “this year’s index pays particular attention to the market conduct performance of South African banks”.
“This focus stems from new outcomes-focused regulations that banks must now adhere to and the influx of customer service requests and complaints on social media.”
Overall sentiment is still negative, but improved by 0.9 percentage points to -12.4%. The main reason for this, according to BrandsEye, is improvements in both FNB and Standard Bank’s scores.
African Bank achieved the highest net sentiment, and according to the study received almost four times as many sales enquiries (for loans) from customers than the average for the industry.
Capitec Bank is the incumbent bank with the highest net sentiment. It has held either first or second position since BrandsEye began producing the index. It says this “consistent performance … remains driven by the bank’s affordability”.
However, in 2020, Capitec experienced net negative sentiment for the first time. This decline was due to “unreliability of the bank’s app”.
“Customers cited issues around purchasing airtime, data and electricity through third-party companies as well as instances of system downtime. In a year where digital channels grew in significance, this shortcoming was amplified by customers who were even more reliant on the app.”
Nedbank suffered a 32.9 percentage point decline in 2020 because of the fact that its score was boosted by its partnership with Global Citizen in 2018/2019. The normalised score last year was -8.1%, if the conversation about Global Citizen was excluded. But the bank still saw a decline in sentiment to -12.5% this year.
The worst performer in the industry was Discovery Bank which has faced operational issues since its launch.
The index points to two events, the first when all accounts reflected a balance of zero, and “reports that the CVV number on Discovery’s credit card was not needed to make online purchases” as instances that undermined confidence in the bank.
Worse, “customer service was a key issue for the bank”.
“Customers reported having to reach out to multiple contacts at the bank to receive a response and waiting long periods for help. This led to the bank having the worst response rate to social media queries, suggesting it lacks the requisite capacity to serve its customers.”
Covid-19 has forced many consumers to use digital channels to contact their banks for help during this year. BrandsEye says its analysis of banks’ social customer service during the early phases of lockdown found that conversation volumes grew by 61%, while banks’ response rates fell by 39%.
The conversation about Covid-19 had the most significant impact on FNB. This was largely because of customer frustrations around its relief programme.
BrandsEye says “the quick turnaround time necessary in banks’ implementation of relief programmes was likely a root cause of confusion among staff and customers”.
The index also tracked “threats to cancel, or churn”, and the majority “came from the customers of the incumbent banks”.
The next largest churn threat came from Discovery Bank customers who threatened to join FNB. “In an analysis of the flow of customers from traditional banks to smaller banks, FNB and Capitec appear to funnel the most customers towards digital banks. Customers leaving either Absa, Nedbank or Standard Bank were more likely to say they were going to FNB or Capitec.”
BrandsEye says the fact that 47.3% of priority conversations on social media go unanswered “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”.
It says they risk facing heavy fines from the Financial Sector Conduct Authority (FSCA) under the new Treating Customers Fairly (TCF) regulatory approach.
In June, the FSCA published the final Banking Conduct Standard which is based on six TCF outcomes. This standard “prescribes the establishment of a Complaints Management Framework that includes, among other requirements, the categorisation of complaints made by customers”.
Banks are required to report on these outcomes, and this would include their behaviour and interactions with customers on social media. The report says “TCF outcomes featured in 90.7% of customer service complaints on Twitter”.