South African Banking Index: Demand for social customer service up 28% posts

In today’s ever-evolving world, standing still means falling behind. This rings true to DataEQ’s latest South African Banking Sentiment Index, which reveals local banks that failed to up the ante over the past year were surpassed by more innovative competitors.

“Advancing in the Index ranks proved more difficult than declining this year,” comments DataEQ Business Development Director, Lyndsey Duff. “Absa, Nedbank, and Discovery Bank all surpassed Standard Bank, despite the latter only declining by 1.8 percentage points in public Net Sentiment.”

In its sixth year of producing the Index, DataEQ collected over 2.7 million consumer social media posts about South African banks from 1 September 2020 to 31 August 2021. DataEQ’s proprietary Crowd of human verifiers analysed some 500 000 of these posts for sentiment and conversation themes, including the Treating Customers Fairly (TCF) outcomes prescribed by the Financial Sector Conduct Authority (FSCA).

Overall, the banking industry still experienced more negative conversation on social media than positive - resulting in an industry Net Sentiment of -7.5% - but it seems to be headed in the right direction, having improved in Net Sentiment for a second consecutive year.

Absa comes out tops

Seeing the greatest improvements in overall public Net Sentiment this year was Absa, having climbed the ranks both operationally and reputationally to take first place in the Index. The biggest improvement in terms of size, however, was Discovery Bank’s operational improvement of 23.9 percentage points, which saw it move up from eighth last year to sixth this year.

Public Net Sentiment is the overall customer satisfaction metric, calculated by subtracting all negative sentiment from positive sentiment. Operational conversation refers specifically to feedback about the customers’ experience of business operations, whereas reputational conversation includes online press coverage, owned and earned PR and marketing efforts, and publicity generated by social responsibility efforts.

In terms of reputational sentiment, TymeBank scored the most positively by a large margin. The digital bank leveraged social media influencers as brand ambassadors to drive positive content, boosting reputational sentiment by 3.8 percentage points and securing third place overall in the 2021 Index rankings.

The struggle to meet rising social customer service demands

Banking customers posted an estimated 188 649 priority Twitter posts over the last year. This represents 28% growth in service conversations - 38% when including risk mentions - and speaks to an increasing demand for social media customer service across the industry.

However, considering that many of these mentions (57%) went unanswered, South African banks still have a way to go in meeting the growing social media service demands of customers, says Duff. “Banks have yet to effectively handle the growing volume of service requests on social media. Service-related conversation first spiked in 2020 as a result of COVID-19, but has continued to increase throughout 2021.”

Unanswered social mentions expose banks to regulatory risk

In addition to opening banks up to unnecessary reputational risk, failure to swiftly identify and respond to service requests online also poses major regulatory risk, explains Duff. “When mapping the social media conversation according to the six Treating Customers Fairly (TCF) outcomes prescribed by the FSCA, we discovered that 50.1% of sentiment-bearing conversation contained a conduct theme.

“With the Conduct Standard for Banks having come into full effect from July of this year, South African banks are required to enforce the TCF principles across multiple areas of market conduct, or risk facing hefty fines,” Duff concludes.