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While there has been a slight improvement in sentiment towards the country’s leading banks on social media, nearly half of the “priority conversations … that require the attention and action of the banks … have received no response” in the last year.
This is according to BrandsEye, which tracked 2.5 million consumer social media posts (on Twitter and Facebook) on African Bank, Absa, Capitec, Discovery Bank, FNB, Nedbank, and Standard Bank from September 2019 to August 2020.
This is the fifth year that BrandsEye has produced its annual South African Bank Sentiment Index. He says “this year’s index pays particular attention to the market behavior performance of South African banks.”
“This approach stems from the new results-focused regulations that banks must now comply with and the influx of customer service requests and complaints on social media.”
Overall sentiment remains negative, but improved 0.9 percentage points to -12.4%. The main reason for this, according to BrandsEye, is the improvements in FNB and Standard Bank scores.
African Bank achieved the highest net sentiment and, according to the study, received nearly four times more sales inquiries (for loans) from customers than the industry average.
Capitec Bank is the incumbent bank with the highest net sentiment. It has held the first or second position since BrandsEye began producing the index.
It says this “consistent performance … continues to be driven by the bank’s affordability.”
However, in 2020, Capitec experienced net negative sentiment for the first time. This decline was due to the “unreliability of the bank’s application”.
“Customers mentioned issues related to purchasing airtime, data and electricity through third-party companies, as well as cases of system downtime. In a year in which digital channels grew in importance, this deficiency was amplified by customers who were even more dependent on the application. “
Nedbank suffered a decrease of 32.9 percentage points in 2020 due to the fact that its score was boosted by its association with Global Citizen in 2018/2019.
The normalized score last year was -8.1%, if the Global Citizen conversation was excluded. But the bank still saw confidence drop to -12.5% this year.
The worst performer in the industry was Discovery Bank, which has faced operational problems since its launch.
The index points to two events, the first when all accounts reflected a zero balance, and “reports that the CVV number on the Discovery credit card was not necessary to make purchases online” as instances that undermined trust in the Bank.
Worse still, “customer service was a key issue for the bank.”
“Customers reported having to contact multiple contacts at the bank for a response and waiting long periods for help.
“This led to the bank having the worst response rate to social media inquiries, suggesting that it lacks the necessary capacity to serve its customers.”
Covid-19 has forced many consumers to use digital channels to contact their banks for help this year.
BrandsEye says its analysis of banks ‘social customer service during the early phases of the lockdown found that chat volumes grew 61%, while banks’ response rates fell 39%.
The conversation about Covid-19 had the most significant impact on FNB. This was due in large part to customer frustrations surrounding their aid program.
BrandsEye says that “the rapid response time required in implementing aid programs by banks was probably a major cause of confusion among staff and customers.”
The index also tracked “cancellation or abandonment threats,” with the majority “coming from clients of established banks.”
The next biggest 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 channel the majority of customers to digital banks. Clients leaving 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 to the industry that is missing a considerable volume of important customer interactions and is therefore unlikely to have been reporting on them for regulatory purposes. “
It says they risk facing hefty fines from the Financial Sector Conduct Authority (FSCA) under the new regulatory approach Treat Clients Fairly (TCF).
In June, the FSCA published the final Standard of Banking Conduct, which is based on six TCF results.
This standard “prescribes the establishment of a complaints management framework that includes, among other requirements, the categorization of complaints submitted by customers.”
Banks are required to report on these results, and this would include their behavior and interactions with customers on social media.
The report says that “TCF results appear in 90.7% of customer service complaints on Twitter.”
This article first appeared on Moneyweb and was republished with permission.
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