The banks South African consumers will most likely choose after a bad experience

South African consumers have had a torrid year dealing with banks during the Covid-19 pandemic, according to BrandsEye’s latest Banking Sentiment Index for 2020 – with many threatening to cancel their accounts and take their business elsewhere.

The index is based on a collection of over 2.5 million social media posts about local banks, between September 2019 and August 2020.

The customer service and experience solution provider uses topic analyses to gauge the sentiment of posts (either positive or negative), across 70 topics, and seven broad categories including reputation, customer service, pricing and customer retention.

The net index score is determined by subtracting negative sentiment from positive sentiment.

In terms of overall net sentiment in 2020, South Africans are overwhelmingly negative, with only one bank – African Bank – recording a positive score overall.

Negative sentiment was driven by complaints around customer service and confusion over coronavirus relief measures implemented by the banks, in a year when digital was thrust into the spotlight.

As part of the assessment done by BrandsEye, the group also scoured through the many cancellation threats made by customers on social media.

“Most of the threats to cancel, or churn, came from customers of the incumbent banks,” BrandsEye said. “Following this, the next largest churn threat came from Discovery Bank, whose customers threatened to join FNB.

Of the incumbents, FNB customers made the most threats to cancel accounts and move to another bank – accounting for more than half of all these types of threats made. This was followed by Absa, Nedbank and Standard Bank.

As a proportion of conversation share, however, Discovery Bank had the highest share of cancellation threats, BrandsEye said.

  • FNB: 53.4%
  • Absa: 15.1%
  • Nedbank: 9.9%
  • Standard Bank: 8%
  • Capitec Bank: 6.2%
  • Discovery Bank: 4.3%
  • TymeBank: 1.7%
  • African Bank: 1%

Why customers are leaving

According to BrandsEye, turnaround time continues to drive the most negative sentiment towards banks – a trend that has continued for several years. However, this was exacerbated in 2020 by the Covid-19 pandemic, which led to flooded digital channels and lagged response from the banks.

A large wave of negative sentiment around Covid-19 relief programmes emerged in 2020 – which were initially welcomed, but later became an issue for many customers as prolonged economic pressures weighed down on them, while many programmes did not provide the relief many originally expected.

Due to high traffic volumes, many queries and attempts to get in contact with banks were left with no response, leading to frustration. Across all common themes in social media posts, each had a negative net sentiment score.

Where customers are going

FNB customers are most likely to move over to other big banks, with Capitec the most likely choice for alternative services. This is also the case for Absa, African Bank and TymeBank customers.

Standard Bank customers are most likely to move over to FNB, which is the same for Nedbank, Capitec and Discovery Bank clients.

For the new digital entrants, TymeBank is most likely to acquire FNB, Capitec and Absa clients, while Discovery Bank is most likely to receive customers from FNB and Absa.

Notably, Bank Zero, which has not yet launched publicly, has garnered the most interest from FNB, Capitec, Absa and Standard Bank customers.

Purchase mentions – customers looking to sign up with a bank – are slightly more prevalent than cancel mentions, BrandsEye noted.

African Bank has the greatest deviation between the percentage of customer acquisitions and cancel threats in conversation – with purchase topping cancelation by 25.7 points.

Capitec and TymeBank follow. Of the new entrants, TymeBank and African Bank have higher acquisition opportunities than cancellation threats, while Discovery Bank has the inverse.

Read: Best and worst banks in South Africa according to customers

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The banks South African consumers will most likely choose after a bad experience