By Londiwe Buthelezi for Fin24
BrandsEye’s annual SA Banking Sentiment Index reveals that African Bank had the most positive social media mentions this year.
On the other hand, Discovery Bank had the worst.
BrandsEye also found that, in the early days of the lockdown, customer queries on social media spiked by 61%.
The social distance between banks and their customers, created by Covid-19, has left many unhappy as overwhelmed banks fail to keep up with their customers’ frustrations on social media, according to the latest South African Banking Sentiment Index.
The index, compiled by customer experience data provider, BrandsEye, reveals that, during the early phases of the lockdown, more customers used social media to reach out to their banks. It spiked conversation volumes by 61%, while banks’ response rate to customers over the same period fell by 39%.
“With the influx of customers seeking assistance on digital channels, banks struggled to keep up with the demand for support on social media. 47.3% of priority customer conversation (those which require the banks’ attention and action) on social media went unanswered by the banks,” wrote BrandsEye.
Policing banks’ conduct towards their customers
While BrandsEye has compiled the South African Banking Sentiment Index annually since 2015, this year’s index was more than just about determining which bank has the most unhappy customers on social media.
The Financial Sector Conduct Authority (FSCA) used the index to gauge banks’ Banking Conduct Standard, which the regulator launched in July.
The Standard is based on the six Treating Customers Fairly (TCF) outcomes.
In the past, TCF regulations only policed the conduct of insurers as the FSCA’s predecessor, the Financial Services Board, did not regulate banks.
Looking at data that BrandsEye collected from over two million social media posts about South African banks between September 2019 to August 2020, the FSCA’s divisional executive of regulatory policy, Caroline Da Silva, said 90.7% of customer complaints on social media included issues that touched on fair or unfair treatment of customers or TCF compliance themes.
These ranged from complaints about unauthorised debit orders to complicated product structures and misleading advertising.
“Social media is indeed a rich source of conduct-related conversation that banks ought to pay close attention to. As the regulator, we are concerned with the volume of complaints that BrandsEye has identified,” wrote Da Silva in the report.
The FSCA and BrandsEye said the fact that almost half of customer conversations that required the banks’ attention and action went unanswered “should be alarming for the industry” because had banks paid more attention to these, they would have avoided reputational damage and escalation of complaints to the regulator.
But because they are missing out on doing something when these complaints surface, “they risk facing heavy fines from the regulator as well as significant reputational risks that such sanctions would generate”, read the report.
African Bank scores highest and Discovery Bank the lowest
According to the report, Nedbank and African Bank were the two most responsive banks and Discovery Bank the least responsive.
It said Discovery Bank only replied to about one out of every 10 interactions that required its attention and action.
Overall, African Bank received the most positive posts on social media over the period of data collection, followed by Capitec. Discovery had the most negative customer sentiment, scoring the lowest in net sentiment, after FNB.
On the positive side, the net sentiment score for all eight banks included in the report – which include the big four, Capitec, TymeBank, Discovery Bank and African Bank – improved by 0.9% percentage points compared to 2019.
The net sentiment score tallies the percent of positive sentiments on social media posts, minus the percent of negative sentiments.
The sentiment score around all banks’ turnaround time – which is usually the biggest source of social media users’ frustrations – also improved, a phenomenon that BrandsEye attributed to the increased adoption of digital channels by banks as a result of Covid-19.