The majority of South African banks
scrambled to keep up with demand for customer support during SA’s lockdown, with an estimated 47.3% of customer queries on social media going unanswered by the banks.
This is according to BrandsEye’s annual South African Banking Sentiment Index, based on the company’s analysis of South African banks’ social media customer services during the early phases of lockdown.
The fifth edition of the index, which includes an analysis of the pandemic’s impact on the banking
industry, found conversation volumes grew by 61%, while banks’ response rates to consumers fell by 39%.BrandsEye collected more than 2.5 million social media posts from consumers, and focused on five South African banks and the two new digital entities, from September 2019 to August 2020.
The firm’s proprietary crowd of human verifiers analysed posts for sentiment and conversation themes, including the ‘treating customer fairly’ outcomes prescribed by the Financial Sector Conduct Authority (FSCA).
According to the index, with the influx of customers seeking assistance on digital channels, banks struggled to keep up with the demand for support on social media. A total of 47.3% of priority customer conversations on social media went unanswered, with Nedbank and African Bank emerging as the two most responsive banks, and Discovery Bank rated the worst performer in the industry.
Discovery Bank’s customers were the least likely to receive a reply from their bank
on Twitter, only replying to about one out of every 10 priority interactions. The digital bank’s customers reported having to communicate with multiple contacts at the bank to receive a response and waiting long periods for help, notes the index.This led to the bank having the worst response rate to social media queries, suggesting it lacks the requisite capacity to serve its clients.
As a result, Discovery Bank had the highest share of cancellation threats, with 76.7% of customers threatening to leave the bank, highlighting its slow turnaround time.
“In 2020, the banks faced an immense challenge in meeting the growing social customer service demands of consumers,” says Nic Ray, BrandsEye CEO.
“COVID-19 has accelerated this preference for digital interactions and banks will now need to ensure they are equipped to rapidly identify and respond to these queries. Our findings show that banks that are not able to meet service expectations yield high rates of cancellation threats.”
Huge appetite for digital
BrandsEye says the rapid digitisation of the financial services industry has been driven by consumer demand for digital services, particularly in the banking industry, which has seen the introduction of new digitally-focused entrants.
The adoption of digital banking services has also been accelerated by social distancing and COVID-19. As a result, consumers are increasingly seeking help from, and lodging complaints with, their banks on digital channels such as social media, notes the index.
“Social media is a rich source of conduct-related conversation that banks ought to pay close attention to it. The increase of digital products available on the market has further optimised customer experience, in turn reducing the reliance banks have on physical facilities. This meant that any system downtime had a far greater negative impact on customer frustration than in previous years,” says BrandsEye.
Nedbank’s sentiment declined by 32.9 percentage points to a six-year low. Its net sentiment fell from 20.4% in 2019 to -12.5% in 2020.
BrandsEye explains this can be largely attributed to the conclusion of the 2019 partnership with the Global Citizen movement, which contributed significantly to its 2019 performance, which later declined.
The bank was also affected by reputational sentiment decline stemming from negative social media mentions relating to a February 2020 article on a litigation matter in which a black bond holder sued Nedbank R2m for loss of earnings. The article alleged racist practices. The matter is yet to go to trial.
It points out Capitec remains the most consistent incumbent player, emerging as the bank with the highest net sentiment. Capitec has held the first or second position in this index since 2015. This year, it is the incumbent. TymeBank followed Capitec, while Absa ranked fifth and First National Bank was in sixth position.
“The high volumes of conduct-related complaints on social media are concerning to the FSCA,” says Caroline Da Silva, divisional executive of regulatory policy at FSCA.
“The industry must pay close attention to digital complaints − monitoring social media will help banks identify the root causes of complaints and ensure 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.”
