Poor service and governance issues in the banking industry had caused significant pain among customers, an industry survey of consumer sentiment showed yesterday.

The latest DataEQ SA Banking Sentiment Index analysed over 3.3 million social media posts to gauge public perception towards South Africa’s biggest retail banks. Among the seven regions analysed by DataEQ, South Africa ranked first in banking Net Sentiment, followed by Botswana, Kenya, Ghana, Saudi Arabia, the United Arab Emirates, and the UK.

However, over 60% of related conversations locally reflected dissatisfaction with service levels. Common complaints included long response times, unresponsive service channels, and staff competency issues, particularly in call centres, said Sarah Lamb, the banking lead at DataEQ, in a statement.

Despite a four-percentage-point decline in Net Sentiment from 2023, the banking industry maintained an overall positive sentiment score of 20%. This performance saw banking outperform the retail, insurance, and telecoms industries, according to the consumer Net Sentiment index.

Lamb said online campaigns had been effective in generating positive sentiment, but they were not a substitute for addressing operational issues.

“While they create a temporary uplift, customer frustrations—particularly regarding service quality—resurface when the promotional spotlight dims,” she said.

Strategic campaigns boosted customer sentiment across the industry, with hashtags like Discovery’s #DiscoveryBestBank, FNB’s #LoveFNB, Absa’s #WeDoMoreWednesdays, Standard Bank’s #SBLove, and African Bank’s #AudacityToBelieve fostering positive engagement.

“However, such campaigns somewhat masked underlying operational grievances,” said Lamb.

Governance issues also emerged as “a critical area of concern,” with over a quarter of industry priority conversations containing a risk theme.

Of this, 54% were linked to perceived downtime issues, such as app outages and delayed transactions, which significantly impact customer trust.

Fraud conversations were also a major driver of industry risk, with 14% of all risk-related discussions referencing fraud complaints, including unauthorised transactions and delays in query resolution, highlighting the industry’s struggle to address these risks effectively.

The lack of compliance with Treating Customers Fairly (TCF) principles, particularly regarding performance and service issues, further underscored governance vulnerabilities across the industry.

“The governance challenges revealed in this year’s report present a significant risk to the market. Operational downtime and unresolved fraud issues not only undermine customer trust, but also expose banks to potential regulatory repercussions. Addressing these systemic issues is essential for long-term stability and maintaining the industry’s hard-earned positive reputation,” said Lamb.

Meanwhile, the index showed Discovery Bank to be South Africa’s favourite bank in 2024, based on public consumer sentiment. The bank achieved the highest Net Sentiment (NS) scores in overall, operational, and reputational categories.

Discovery was followed by FNB and Absa in the operational rankings, with both banks “earning praise for innovative features and excellent staff service,” a statement said yesterday.

In reputational rankings, Discovery Bank’s community initiatives, award wins, and product innovation solidified its position at the top. Absa and TymeBank followed closely, supported by their strategic partnerships and educational campaigns which resonated with consumers.

BUSINESS REPORT