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11 November 2020

Are South African banks treating their customers fairly on social media?

Banks fail to respond to 47.3% of customers in need of support

In July 2020, the Financial Sector Conduct Authority (FSCA) published a new Banking Conduct Standard based on the six Treating Customers Fairly (TCF) outcomes. The regulator defines TCF as “an outcomes-based regulatory and supervisory approach designed to ensure that regulated financial institutions deliver specific, clearly set out fairness outcomes for financial customers.” Banks must demonstrate to the regulator that they deliver and report on these six TCF outcomes. This includes the banks’ behaviour and interactions with their customers on social media.

Writing in foreword of this year’s Index, The FSCA’s Divisional Executive of Regulatory Policy, Caroline Da Silva explained that the regulator had adopted a data-driven strategy to understand the extent and nature and patterns of these complaints as they occur at an individual bank or industry level. She writes “Part of this strategy includes the monitoring of TCF conversation on social media.”

In the 2020 South African Banking Sentiment Index, DataEQ categorised social media conversation and complaints according to the six TCF outcomes to assess banks’ conduct performance.

Banks fail to respond to 47.3% of customers in need of support

Response rate to priority conversation

Nedbank and African Bank were the two most responsive banks, outperforming competitors by responding to more than three-quarters of all priority interactions. In contrast, Discovery Bank’s customers were the least likely to receive a reply from their bank on Twitter. Discovery replied to approximately one out of every ten priority interactions.

Exmaple consumer TCF mentions

90.7% of customer complaints on social media included TCF outcomes

TCF outcomes featured in 90.7% of customer service complaints on Twitter. Discovery Bank had the highest proportion (94.1%) of its complaints relate to TCF outcomes. FNB had the fewest TCF themes present in the bank’s complaints and fell below the industry average at 89.9%.

Percentage of complaints linked to TCF outcomes

Close to half of the complaints containing TCF themes were not responded to

56.6% of TCF conversation 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.

Volume of TCF complaints

Example mentions of TCF complaints

Regulator concerned by volume of complaints on social media

Da Silva urged banks to pay close attention to social media to deliver better outcomes for their customers, noting that the regulator was concerned with the volume of these complaints that DataEQ has identified “If banks take a global view of their customers’ experiences, which include awareness of conversations on social media, they can identify the root causes of complaints and ensure that their customers do not have repeat issues in future,” writes Da Silva

The growing preference of younger consumers for digital channels and the digitisation accelerated by Covid-19 means banks must ensure that they can deliver fair customer outcomes on social media.

To access the full 2020 South African Banking Index please complete the form on this page

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