New entrants, African Bank and Discovery Bank, claimed the first and last positions respectively in BrandsEye’s annual South African Banking Sentiment Index. In its fifth year of producing the Index, BrandsEye collected more than 2 million social media posts from consumers about South African banks from September 2019 to August 2020. The posts are analysed for sentiment and conversation themes, including the Treating Customer Fairly (TCF) outcomes prescribed by the Financial Sector Conduct Authority (FSCA).
Two of the main findings of the Index are that there was an increase in social media complaints amid stricter outcomes-based banking regulations and that banks, shockingly, failed to respond to 47.3% of customers 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. 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.
Nedbank and African Bank were the two most responsive banks while 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 ten priority interactions.
In July, the FSCA published the final Banking Conduct Standard designed to ensure that banks operate with transparency and fairness. The Standard is based on the six TCF outcomes and empowers the regulator to take action against banks who do not comply.
In addition to improving fairness outcomes for customers, the Standard prescribes the establishment of a Complaints Management Framework that includes, among other things, the categorisation of complaints made by customers. As is evidenced by the findings of the Brandseye annual South African Banking Sentiment Index, thousands of these complaints are made on social media, 90.7% of which contain TCF themes and 47.3% of which have gone unanswered by banks in the last year.
The Index indicates that 56.6% of TCF conversations received a response from the relevant banks. The TCF categories with the highest response rates were product performance, advice from staff, and customer service. Accusations of misleading advertising, complaints about product design, as well as complaints about the ease of switching products or banks received the least responses from banks.
Overall, this should be alarming for the industry who is 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.
Click here to download the detailed report.
Click here to download an infographic that illustrates the key findings.