Banking industry to be heavily tested in 2019
It’s going to be a tough year for traditional banks as new entrants disrupt the sector and customer expectations increase
It’s set to be a tough year for traditional banks in 2019. For the first time, SA’s largest retail banks – FNB, Absa, Capitec, Nedbank, Standard Bank and African Bank – are facing stiff competition from new entrants to the market.
With the launch of TymeBank, Bank Zero and Discovery Bank, all of which are playing in the digital sector offering consumers greater convenience and lower costs, customer satisfaction will be the deciding factor when it comes to how much market share the traditional banks will sacrifice.
According to the SA customer satisfaction index for banking 2018 (SA-csi), conducted by Consulta, customers are starting to expect more and more from their banks, while banks are battling to achieve even the most fundamental aspects of customer satisfaction.
SA-csi founder and chair Professor Adré Schreuder says that in the current landscape, where competition has become more complex thanks to the new disruptors, getting to grips with delivering on all variables of the customer experience across the board crucial to survival.
According to the index, Capitec stands out in terms of overall customer satisfaction, stemming from the bank’s excellent understanding of its target markets and their needs, and ensuring that its brand promise delivers on these.
At the same time, Absa is experiencing a halo effect from its brand relaunch last year, which is evidenced by its increased customer expectation score. That said, the bank is now under pressure to meet these increased expectations – something it is battling to do. Absa needs to reflect the promises made to customers during the relaunch in all aspects of its operations.
The big take-out
It’s going to be a tough year for traditional banks as new entrants disrupt the sector and customer expectations increase.
Meanwhile, Standard Bank’s turnaround has shown positive results; it has had the biggest improvement in customer perception across all the brands.
Standard Bank, Nedbank and Absa have shown good results in terms of customer loyalty and consistent year-on-year growth.
In a coup for FNB, it is strongly perceived to be digitally differentiated. That said, it will be a challenge for it to maintain this position as the new entrants are all digitally led.
For more information on the SA-csi and to download the infographic, click here.