When Capitec broke onto the retail banking scene over 20 years ago, I sensed that it would shake up the banking industry in South Africa. The simplicity and accessibility of its offering to consumers ensured its immediate success. But I didn’t expect the “ Big Four” (Absa, FNB, Nedbank, and Standard Bank) to be so nonchalant about this innovative new kid on the block.
I could continue about the innovations Capitec brought to banking, its meteoric rise as a brand, and its emergence today as South Africa’s largest bank in terms of number of retail customers, but I’ll save that for another column. Here, I want to focus on the Big Four and how, in my opinion, they have largely failed to up their customer-service game to win back the customers they lost to Capitec.
I need to state upfront that I am generalising about the Big Four – some have done better than others in matching the innovations that Capitec and younger banks such as TymeBank and Discovery Bank have brought to the retail banking industry. I group the Big Four because they have dominated banking for so long, continue to hold the vast bulk of assets, and, in my opinion, have yet to develop a genuinely customer-centric culture.
It’s a truism that the bigger the organisation, the harder it is to adapt in the face of disruption. Why did it take so long, for example, to do away with branch codes and have universal account numbers? And don’t get me started on the call centres, which form an impenetrable communication barrier between “us” and “them”.
Here’s a personal experience which illustrates my point about the established banks’ casual attitude towards their customers (I won’t name the bank because it was very contrite and bent over backwards to make amends).
Recently, my wife and I sat in a queue for over an hour at our local branch to “Fica” my current account, on which we each have a cheque card – my wife’s card had been deactivated after she ignored what she thought were scam notifications. I could not believe we were in the same queue as someone with extensive, time-consuming banking business. All we needed to do was provide proof of identity and address and have our thumbprints scanned – a procedure that should take five minutes.
There was a lot more paperwork than I expected, and we walked out of the bank hoping we would not have to enter the branch again anytime soon (this is the effect my bank branch always has on me).
It was just a few days later that my wife, to her astonishment, again started receiving Fica warnings. After escalating my dissatisfaction (an understatement), I was contacted by the area manager. It turned out that the staffer we had dealt with at the counter had not completed a section relating to money laundering.
Our story doesn’t end there. My wife and I have operated off the same account for over 30 years. But it emerged (at that point in the saga, not before) that the bank had no record of her having signing power on my account – the documents had been lost at some point in the past when they changed systems.
So back we traipsed to the branch to provide our signatures, foregoing the queue at their insistence.
Handling of complaints
Compounding banks’ shoddy service has been their ineptitude in handling complaints. This was highlighted in the recently released Financial Sector Conduct Authority’s Banking Sector Complaints Management Review Report, which found significant shortcomings. It surveyed complaint records from 23 banks and found that:
- 60% of banks failed to accurately classify complaints according to specified minimum categories,
- 85% of banks were rated “unsatisfactory” regarding the accurate and secure recording of complaints-related information, and
- 92% of banks failed to keep complainants adequately informed of the progress of their complaints. They failed to provide clear and adequate reasons for rejecting complaints or to adequately inform complainants of escalation or review processes.
This appalling attitude towards customers is well illustrated in a recent case reported by the National Financial Ombud Scheme (NFO). Nerosha Maseti, the Lead Ombud of the Banking Division at the NFO, said a 79-year-old bank customer had approached her office following a dispute about fees on his account. After being told he would not be charged fees, they were deducted from his balance. He visited more than one of the bank’s branches on several occasions in an effort to resolve the matter, without success. In his complaint to the NFO, he wanted the fees to be refunded and R160 for the travelling costs he had incurred.
It emerged that the bank staff who assisted the customer did not have the necessary product knowledge and did not take the customer’s request properly into consideration, Maseti says. “In addition, when the customer complained, he was not properly assisted, which resulted in several trips to the branches.
“We recommended that the bank pay the customer compensation for these failures in addition to the fee refund, which the bank and the customer accepted. However, by this time the customer was so unhappy that he closed all his accounts and moved R1 million out of the bank,” Maseti says.
If you have a complaint against your bank that it is unable or unwilling to resolve, you can approach the NFO. For more information, visit the website, www.nfosa.co.za.
PERSONAL FINANCE