Banking Consumer Index dips as S.African consumers change patterns - CNBC Africa

Banking Consumer Index dips as S.African consumers change patterns

Southern Africa

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Online banking from First National Bank, one of South Africa's big four banks. PHOTO: First National Bank

“SA’s banking industry has gone through revolutionary changes over the past couple of years,” said Adré Schreuder, founder and chair of the South African Consumer Satisfaction Index (SAcsi).

“With Capitec bringing competitively priced banking products to the market and FNB driving new innovations in the way in which consumers do banking, it is more challenging for the banks to keep up with consumers’ increased demands on service quality and value for money.”

According to the Index’s survey done in the 4th quarter of 2013, South African banks recorded an overall index satisfaction score of 75.6 out of 100. This was a statistically significant decline of 2.6 per cent from last year’s score of 77.6 out of 100.

(READ MORE: Q2 2013 banking confidence in S.Africa weak)

7,796 customers of Absa, Capitec, First National Bank, Standard Bank and Nedbank were randomly selected for the survey.

Capitec Bank set 2014’s overall banking benchmark at 81.5 out of 100. Its customer satisfaction score significantly increased by 3.2 per cent on the 2012 rating, and was 7.8 per cent above the industry average.

First National Bank (FNB) followed with an overall banking benchmark of 89.9 out of 100. The bank also shares the industry leader position with a satisfaction score which is 5.1 per cent above industry average.

All the other banks’ satisfaction scores were below industry par, with Nedbank showing a 5.5 per cent decline, followed by Standard Bank with a 3.6 per cent decline. Absa’s satisfaction score was also down 4.3 per cent.

SAcsi also expanded its banking industry coverage survey by adding the main banking channels that are available to South African consumers, which include ATMs, , cell phone and online banking, and banking apps.

FNB leads the cell phone banking sphere with a score that is 4.7 per cent higher than industry average. The bank also took the highest score in online banking satisfaction with consumers rating it 7.0 per cent above industry average.

(READ MORE: Banking and telecoms on the path of convergence)

Nedbank was on par with the industry in the category, but the three other banks were all below the industry average.

FNB and Nedbank took the lead in the banking apps category, and Standard Bank found to be on par with industry average. Absa lagged the industry average by 4.3 per cent. Capitec does not offer a banking app.

Schreuder added that South African consumers’ expectations have increased slightly from last year to this year, and are more willing to switch banks if they are not satisfied with the products and services offered by their bank.

“This behaviour makes customer retention a challenge, one that no South African bank should take lightly given that retention scores have dropped slightly from last year to this year,” says Schreuder.