abridged sm study on retail banking

2014/2015 Ubiquity Social Intelligence Report: SA Retail Banking

South Africa's best and worse retail banks and the issues driving opinions

for the 12 months between 1 July 2014 - 30 June 2015

31 July 2015


South Africa's first social business intelligence consultancy

Introduction

Key Findings

Data sample

SA's banks social media share of voice

SA's best and worst banks

Issues driving opinions about SA's banks

Opinions of banks on key issues

Behavioural analytics

Gender analysis

Appendix


Content

Social media provides a significant opportunity for companies to better understand the markets they serve. However, beyond sales and marketing, harvesting social data to provide actionable business insights is dicult. The main challenge is discerning between industry-created and market-created content. Another main challenge in SA, is opinion mining. South Africans can literally express something in a thousand dierent ways, which requires the best natural language processing technologies and hundred of hours to rate language terms. In this analysis, for example, we excluded more than 80% of social data relating to SA's banks, which was created by the banks themselves, their agencies and partners; is the result of spamdexing; content syndication; or contains data that cannot be used for opinion-mining. We also reiterated thousands of sentiment terms and phrases.

However, social media insights provide authentic views and opinions with a high degree of specificity and can be dissected to provide more powerful insights than traditional market surveys. Furthermore social media insights can be harvested daily, even hourly, which enables companies to an opportunity to build better relationships with customers by quickly and quantitatively assessing problems, operational issues, risks and opportunities.

Ubiquity - SA's first social business intelligence consultancy - conducted this analysis to demonstrate that social media data can provide actionable business insights.

Ubiquity embarked on a social business intelligence project to answer two questions: (1) What are market opinions around South Africa's retail banks, and (2) What are the issues driving those opinions? We chose the retail banking sector, which is considered as the most challenging retail sector to analyse.

The banks analysed in this study are Absa, Capitec, FNB, Nedbank and Standard Bank. This analysis covers 90% of retail banking issues across social media, which were statistically identified and categorised into four main issues:

* customer service * banking fees * credit - lending practices, products, service, home loans, debt, debt collection and credit application

* savings - products, services, advise, financial education and the promotion of savings

Business banking and vehicle (and asset) finance are excluded from this analysis.


Introduction

SA's best and worst banks

* Capitec is SA's best bank and the only bank that received a net positive opinion on social media.

* Nedbank is SA's worst bank.

Issues driving opinions about banks

* Credit is the top retail banking issue on social media, followed by customer service, costs and savings.

* Customer service is the industry's biggest pain point. All of SA's banks - with the exception of Capitec - are failing

customers.

* Opinions are only slightly more negative than positive about banking fees after eorts by banks to reduce costs, while

the market had a net overall positive opinion about banks' eorts to promote savings.

Behavioural analytics

* More FNB customers engage on social media than any other bank.

* FNB receives more negative recommendations than any other other bank, closely followed by Standard Bank and

Absa.

* More prospective customers are looking into FNB than any other bank.

* Absa and FNB have the highest proportion of customers indicating their intention to leave.

Gender

* There are slight gender biases toward Absa and and Nedbank, however men and women definitely express dierent priorities around banking issues - costs, credit, customer service and savings.


Key findings

Social Media Share of Voice

FNB has the largest share of voice on social media. This reflects a winning strategy to promote two-way symmetric communications with stakeholders which will enable it to respond and adapt quicker than its competitors in the long run.

20,0%

10,4%

35,8%

14,2%

19,5% - Standard- Nedbank - FNB- Capitec- Absa


1 July 2014 - 30 June 2015

SA's best and worse banks

Capitec is SA's best bank and the only bank with a net positive opinion score according to social data. Nedbank is the worst bank.

-30

-22,5

-15

-7,5

0

7,5

15

-10,5

8,3

-16,3-23,1

-14,6

- Standard- Nedbank - FNB- Capitec- Absa

Net s

entim

ent s

core

s


1 July 2014 - 30 June 2015

015

30

45

60

FNB Capitec Standard Bank Nedbank Absa

3,7

4,3

3,93,03,3

15,3

14,4

14,126,3

14,9

25,837,5

28,718,0

31,2

Negative Positive Ambivalent

SA's best and worst banks* Capitec is SA's best bank according to consumer opinions on social media and the only SA bank to receive

an overall net positive rating. * While Nedbank received the highest negative rating, Standard Bank received the lowest positive rating. * Nedbank is SA's worst bank according to opinions on social media, having received the lowest overall net

rating.


Each sentiment score is represented as a proportion of total comments

Neutral comments are excluded in this chart

- Absa- Capitec- FNB- Nedbank- Standard

Net s

entim

ent s

core

s

SA best and worst banks (per quarter)


* Capitec was SA's best bank during each quarter for the year ending 30 June 2015, and is growing its lead, while Nedbank crashed in the last quarter due to poor customer service.


Issues driving opinions about banks

Credit - is the No1 retail banking issue on social media

10%

26%

42%

22%Banking fees and costsCredit-relatedCustomer serviceSavings

11%

22%

39%

28%11%

18%

47%

24% 13%

22%

39%

26%8%

33%

43%

16%

Q3 2014 Q4 2014 Q1 2015 Q2 2015

Credit is the main bank-related issue on social media. Customer service has consistently deteriorated over the past three quarters and has overtaken banking fees and costs as the second major issue.


013

25

38

50

Q3 2014 Q4 2014 Q1 2015 Q2 2015 12-month average

3,33,0

2,06,2

3,2

14,911,618,421,615,9

18,018,816,715,418,5


Credit


* Credit - incorporates all credit issues relating to (except vehicle finance and business finance) like lending criteria and practices, products, service, home loans, debt, debt collection and credit application and disputes.

023

45

68

90


5,66,44,0

5,7

4,6

15,215,618,2

16,1

10,7

63,264,759,349,4

68,2


Customer service


* Customer service includes all issues relating to service including complaints, customer experiences at bank branches, online and call centres.

* Customer service is showing steady deterioration since Q3 2014. * The market is extremely opinionated about this issue.

013

25

38

50


4,64,63,55,24,9

17,416,8

18,914,8

18,4

22,525,019,924,9

20,4


Banking fees


* Banking fees was a hot-button issue, but overall more than half of all social data is neutral, while opinions are divided. On the one hand, banks have developed more compelling value propositions, partly in response to Capitec. However, customers complain regularly about transactional banking fees relating to issues like reversing unauthorised debit order charges.

010

20

30

40


2,74,01,0

1,0

3,1

21,414,5

23,514,3

28,1

12,818,5

10,311,47,5


Savings


* Savings incorporates products, services, advise, financial education, promotion of financial savings and general eorts by banks to save customers money.

* Banks are aggressively promoting savings spurred by tax incentives on short-term savings products, which appears to resonate with banking customers.


Opinions of banks on key issues

SA's best and worst banks: Credit

- Absa- Capitec- FNB- Nedbank- StandardNet

sent

imen

t sco

res


* Opinions are more positive towards Absa and Capitec. Absa is the only bank to score a net positive opinion on credit-related issues.

* However, opinions are steadily turning more negative on the remaining three banks. (Also see next graph)

Sentiment is turning negative in 2015

08

17

25

33

42

50Ab

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733

53

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42

111

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246

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141515

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211817

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20

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16242223

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1919191417

202121141514

191911

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22141616

25

13171819


Opinions about credit

Q3 2014 Q1 2015 Q2 2015 12-month average

Q4 2014


SA's best and worst banks: Customer Service


sent

imen

t sco

res


* Opinions are more negative about customer service than any other banking issue. * Negative opinions are consistent toward FNB, while opinions deteriorated significantly towards Nedbank in

Q2 2015. * Customer service is the banking industry's biggest pain point as banks are failing customers. (Also see next

graph)

The banking industry's key pain point, but Capitec is in a league of its own

017

33

50

67

83

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FNB

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ank

Stan

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765

468

66461

10

2

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67

2

535

14

912

43

1313

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49

1717

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613

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6

33

8

597370

31

64607672

28

606351

70

11

64

3522

51

24

6162

13

75

48

71


Opinions about Customer service


Q4 2014


SA's best and worst banks: Banking fees and costs


sent

imen

t sco

res


* Opinions are most negative towards Nedbank and FNB around banking fees and costs, while Capitec leads the way. (Also see next graph)

Fees and costs - key dierentiators for Capitec

012

23

35

47

58

70Ab

sa

Capi

tec

FNB

Nedb

ank

Stan

dard

Ban

k

Absa

Capi

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FNB

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Stan

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FNB

Nedb

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FNB

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4

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82

6

4764

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139

4

91

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161625

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14

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15

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29

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2028241921

2735

27

1424

1222232021

323525

14191626

202518


Opinions about banking fees and costs


Q4 2014


SA's best and worse banks: Savings

- Absa- Capitec- FNB- Nedbank- Standard

Net s

entim

ent s

core

s


* Absa, Nedbank and Capitec all score a net positive rating on savings as an issue. * Opinions are turning more negative, while FNB and Standard Bank lag. (Also see next

graph)

FNB and Standard Bank losing ground

010

20

30

40

50

60Ab

sa

Capi

tec

FNB

Nedb

ank

Stan

dard

Ban

k

Absa

Capi

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FNB

Nedb

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FNB

Nedb

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43

4

1

84

3

2

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43

13

29

2029

17

1315

112218

4

392139

1714

22

12

13

1819

1931

31

151415131210

2115

21171587

149710

33

818

1217

511

3


Market opinions: Savings


Q4 2014



Behavioural analytics:

Analysis of consumer categories by behavioral attributes

Behavioural analytics identifies and segments people (where possible) into the consumer categories by thorough behavioral attributes shared on social platforms:

There are four behavioral segments:

Users - (or customers)

Recommenders - not necessarily customers and can include journalists, bloggers or other stakeholders like the banking ombudsman.

Prospective customers - people who indicate that they are looking around and share their attitudes

Potential churners - customers who indicate their intention to leave their current bank.

1,9%6,9%1,2%

90,0%

Users (customers)RecommendersProspective usersPotential churners


Share of voice by behavioural segments

Behavioural analytics segments

Kaveer

A

Kaveer

A AA

A

A A

A

AA

A

A

A

A

AA

Key Findings

Customers More FNB customers engage on social media than any other bank.

Recommenders FNB receives more negative recommendations than any other other bank, closely followed by Standard Bank and Absa.

Prospective customers More prospective customers are looking into FNB than any other bank

Potential Churners Absa and FNB have the highest proportion of customers indicating their intention to leave.


Behavioural analytics: summary


Key Findings

Customers Credit is the dominant issue

Recommenders Absa only received negative recommendation, all relating to credit.

Prospective customers Prospective customers are looking at all four major aspects banking.

Potential Churners Customers are indicating they are likely to leave because of costs, credit and issues dealing to savings.

Behavioural analytics - Absa


Key Findings

Customers Credit is the dominant issue

Prospective customers Potential customers are focusing on access to credit, and costs and customer service, to a lesser extent.

Potential ChurnersCustomers are indicating they are likely to leave because of issues relating to credit.

Behavioural analytics - Capitec


Key Findings

Customers Credit is the dominant issue filled by customer service. FNB receives more negative recommendations than any other other bank, all relating to credit.

Prospective customers Potential customers are focusing on mainly on access to credit, and costs.

Potential ChurnersCustomers are likely to leave because of issues relating to credit and costs.

Behavioural analytics - FNB


Key Findings

Customers Credit is the dominant issue followed by customer service.

Prospective customers Potential customers are focusing equally on credit, costs, customer service' which is indicative of a brand push, but sentiment is largely negative.

Potential ChurnersCustomers are indicating they are likely to leave because of issues relating to credit.

Behavioural analytics - Nedbank


Key Findings

Customers Credit is the dominant issue. RecommendersAll recommendations are negative and relate to credit.

Prospective customers Potential customers are focusing on mainly on access to credit, and costs, however sentiment is split.

Potential ChurnersCustomers are indicating they are likely to leave because of issues relating to credit and issues related to savings.

Behavioural analytics - Standard Bank

Gender analysis

Gender biases towards brand

Gender priorities toward issues



There is a positive bias among females and a negative gender bias toward Absa . Females engage proportionately more regarding credit and customer service, while males engage proportionately more on credit.

Gender analysis - Absa


There is no gender bias toward Capitec. Males engage proportionately more regarding costs, while females engage more regarding credit.

Gender analysis - Capitec


There is no gender bias toward FNB. Females engage proportionately less regarding credit and more regarding costs, when compared with men.

Gender analysis - FNB


There is a negative gender (female) bias toward Nedbank. Females engage proportionately less regarding costs and more regarding customer service and savings, when compared with men.

Gender analysis - Nedbank


There is no significant gender bias toward Standard Bank, however females engage proportionately less regarding costs and more regarding customer service, when compared with men.

Gender analysis - Standard Bank


Conclusion

Traditionally, there's a widely-held belief that consumers will more readily complain and express negative opinions towards companies and brand, as oppose to complimenting and expressing positive opinions. This is not necessarily true in a digital age, as people will share thoughts, opinions and experience, whether positive or negative, especially if incentivised to do so.

Opinions on social media about Capitec and savings were more positive than negative, and while one would expect South Africans to express an overwhelming negative opinion towards banking fees and costs, this is not the case. South Africans have responded positively to eorts by banks to reduce costs (or provide better value) and promote savings.

This type of analysis provides customers with comparative data to promote more informed decision-making and assist banks to identify and address problem areas.

About Ubiquity Consulting

Ubiquity was founded in 2008 and has evolved from a consultancy specialising in reputation and stakeholder governance to become Africas first social business intelligence consultancy. We harvest social media data through auditable and transparent analytics to provide actionable business insights.

Analysis by Ubiquity Consulting

A303 Pardis Bay, Big Bay, Cape TownTel: +27215549891

[email protected]


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