A new study finds that South Africa has some of the most dissatisfied banking customers in the world – with more than half of survey respondents voicing their dissatisfaction with the way their banks resolved complaints.
The survey, published by advisory firm Ernst & Young, questioned over 32,000 banking customers in 43 countries, including 512 customers in South Africa. It also surveyed 502 banking customers in Kenya and 1,500 customers in Nigeria.
The survey did not ask respondents to indicate who they were banking with.
In general, South Africa often mirrors global trends, with the other African countries being more aligned with emerging market trends, EY said.
On the positive side, the survey noted that there was once again a trend towards greater trust in banking institutions.
Trust is most frequently associated with the stability of the institution and the customer experience, with “the way I am treated” being of great importance, followed closely by communications, advice and problem resolution.
Emerging markets, in general, recorded a higher increase in confidence than the global average.
Across Africa, confidence increased most in Nigeria (69%), followed by Kenya (66%) and South Africa (33%).
Experience with a provider, while being a key driver of trust, it is also the single most common reason for opening and closing accounts, EY said.
Globally 33% of customers sighted experience with providers as a reason for opening or closing accounts. South Africa at 34% mirrors this, with Nigeria (38%) slightly higher than the global average and Kenya (32%) slightly lower.
Mucking up the customer experience
Despite the upswing in confidence in the banking industry, the survey results indicated that banks are falling short on important aspects of the customer experience, and are also increasingly vulnerable to competition from new providers of banking services, EY said.
Globally, one-third of banking customers said they experienced a problem with their bank in the past 12 months, and 33% noted that they were dissatisfied with the bank’s handling of the matter.
In South Africa, 41% of banking customers pointed to problems, and 51% noted dissatisfaction.
According to EY, the degree of dissatisfaction among banking customers poses a big problem for banks and how their brands are advocated by clients.
“Problem resolution has a substantial impact on advocacy, more so than satisfaction with a bank’s products, channels and benefit delivery combined,” the firm said.
To rectify the problem, the auditing firm advised banking institutions to focus on the customer experience to build complete trust and create advocates within its client base.
“This is especially important in South Africa where trust levels are higher than globally and customers in SA are more likely to recommend their [financial service provider],” EY said.
African customers express stronger advocacy for their primary financial service provider than seen globally (40%).
Customers in Kenya (62%) are the strongest advocates, followed by South Africa (51%) and Nigeria (46%), in terms of likelihood to recommend their primary financial service provider.
EY suggested that banks make their banking products, packages and fees more simple and clear, helping customers make the correct financial decisions and improve problem resolution processes to combat dissatisfaction.