South Africans are threatening to close their bank accounts – this is where they would rather go
Capitec Bank is at risk of losing customers – and if customers make good on their threats to close their accounts and leave, banks like Discovery Bank stand to be the biggest winners.
This is one of the key findings from the latest DataEQ Banking Sentiment Index.
The index is based on over 4 million consumer social media posts about South African banks from 1 September 2021 to 31 August 2022. DataEQ then analysed posts for sentiment and conversation themes.
One big area analysed by the group is churn – the movement of banking customers from one bank to the next – where the analysis of conversation topics looked specifically at author intent.
Acquisition intent speaks to the purchase intent of consumers – ie, customers looking to join a bank – while cancellation intent tracks the threads made by current customers to leave a specific bank, DataEQ said.
The net score – derived by subtracting the acquisition intent from cancellation intent – indicates how likely a bank will see customers leaving or entering their business (churn).
Using this metric, DataEQ’s data shows that among the major banks, Capitec, FNB and Standard Bank are the most likely to see customers leave, with the other banks being more likely to gain new business.
Here, Capitec is the biggest potential loser with a net intent score of -1.7%, while Discovery stands to get the most business with a net intent score of +6.5%.
Where are customers going?
According to DataEQ, the index shows that of total churn conversations, 14.3% of customers’ threats directly compared to two or more banks in 2022. This was up 2.3 percentage points from last year.
These direct comparisons give an indication of where banking customers would head if they left their current bank.
“Capitec overtook FNB in terms of the volume of mentions from consumers threatening to leave for another bank, with 17.3% of its churn conversation referencing another bank,” DataEQ said.
Capitec customers spoke mostly about moving to FNB and Nedbank, the group said.
Standard Bank had the second-highest number of customers threatening to leave for another bank. Most of these customers saw FNB and Nedbank as the preferred alternatives as opposed to the smaller banks.
As for the smaller banks – Discovery Bank, African Bank and TymeBank – acquisition opportunities were likely to come from Capitec Bank customers, the group said.
The chart depicts the flow of customers who threaten to leave from one bank to another.
The top section of the chart represents customer conversation where they are threatening to leave the bank, while the bottom shows which bank they are threatening to switch to.
Overall, FNB looks to be the biggest gainer should banking customers make good on threats to leave, drawing customers from Captec, Standard Bank, Nedbank and TymeBank.
Nedbank would see the next biggest inflow, also taking customers from Capitec, Standard Bank and FNB.
Why banking customers would leave
According to DataEQ, despite the overall banking industry swinging into positive sentiment territory, general customer service remained a major pain point in consumer complaints.
Slow and low responsiveness – on both social media and traditional channels – was a common theme in these complaints, as consumers struggled to get hold of their banks.
“Digital downtime was a major obstacle in this regard, impacting the industry negatively and eroding consumer confidence in banks. Often linked to this was a rising concern around digital security amid increased accusations of account irregularities and reports of fraud,” the group said.
There was also a greater emphasis placed on digital experience, in general, which for the first time received a greater volume of conversation than general customer service, it said.
In the overall sentiment index, things swung wildly for FNB – which ranked as the bank with the most positive sentiment – and Capitec – which emerged as the lowest-ranked among the banks.
“FNB’s notable improvement from the 2021 index – having climbed up from eighth to the first position – is a testament to how social media Net Sentiment is ever-changing and requires constant effort and attention,” the group said.
“The growing focus on improving customer experience is crucial for banks of all sizes, especially given the tough economic climate South Africans are having to navigate. Consumers are more price sensitive than ever before and won’t hesitate to cross-compare banks if they feel they are not receiving the level of service required.”
Read: The best and worst banks in South Africa – according to customers
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