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Business Times Intellidex
Bank of the Year Survey
Business Times Intellidex
SA’s Best and Worst Banks 2014
Bank of the Year Survey
• The inaugural Bank of the Year Survey was conducted by Intellidex,
a specialist financial services research house.
• Of the respondents, 1 021 provided a complete set of answers.
• All of South Africa’s retail banks were considered, as well as providers
of non-bank credit cards, home loans and vehicle finance.
• Six product categories were considered:
− Current accounts
− Credit cards
− Home loans
− Savings accounts
− Car loans
− Fixed/notice deposits
Bank of the Year Survey
• Two service channels:
− Online banking
− Mobile banking
• The overall Bank of the Year Award was based on the average score
received for the various services that the institution provides, as well as
for its online and mobile channels.
• Banks that are restricted to certain customers in terms of wealth or assets,
such as private banks, were excluded from the overall award.
• This approach means that banks that do not provide certain services, for
example, car loans or home loans, were not prejudiced in the assessment.
• Capitec outperformed larger rivals with much bigger product portfolios.
Capitec Executive – Marketing and Corporate Affairs, Carl Fischer, described
the simple formula:
“Simplicity plus transparency give the customer control.”
• Capitec won on the basis that its average scores for each of the products
it provides were higher than those of other banks.
• The big surprise was Absa – the banner of Barclays Africa came last –
a blow to the bank that has been the largest retail bank in the country
• One customer described why he switched to Capitec and why he could not
“When I opened my account the branch manager came and shook
my hand. It sounds trite and retro, but he also shook the hands of
some old tatas who were opening accounts. I liked that a lot.”
• Another said:
“Capitec is man-on-the-street-friendly, and not puffed up, blowing
their own trumpet and then not living up to what they promise.”
• The other banks – particularly Absa and Standard Bank – came in for
a hammering, with the most common gripes being:
− High fees
− Poor service
− Lamentable communication
“I never, and I mean never, hear from them.”
“Compared with Absa, who [messed] me around and ripped me
off for many, many years, FNB is like paradise.”
• Interestingly, Investec scored very highly in terms of customer service,
but was excluded from the mainstream bank account category, because
it has strict eligibility criteria.
• For 2014, Capitec plans to add another 55 branches to its countrywide
network of 630.
• Capitec aims to be the largest retail bank by 2020, and the fact that they’re
growing at a rate similar to that of the big guys makes this very possible.
• The limitation of the Capitec Group, which grew out of Jannie Mouton’s
PSG stable, is that it does not provide credit cards, car loans or home loans,
like its larger rivals.
• Fischer said Capitec was “investigating” models on how to do this.
• For this reason, FNB was adjudged to have the best ‘comprehensive’
Revealing Blurbs (Not bank-specific)
• On switching accounts:
“A personal banker came to my office.”
“It was the only bank in the town where I worked.”
• On marketing:
“The campaign by them was very visible.”
“I remembered that they had great advertising.”
• On customer service:
“The quality of staff versus the idiots in the other banks.”
“The bank tells me how much it costs me to bank with them
• FNB blazed a marketing trail with its banking apps, online portal design
and hi-tech approach – the rest of the big four then followed suit.
• In 2014, Capitec won the hearts of users of mobile and internet service
offerings, followed by FNB, then Standard Bank.
• Once again, Capitec has won out with simplicity – Fischer said that their
priority was to avoid razzle dazzle and instead try for an intuitive user
experience, so that customers understand fully what is going on.
• Online and cell phone banking are part of SA banks’ cost-cutting strategy,
but the number of South Africans using online or cell phone banking
• Fischer says that not more than 5% to 8% of Capitec’s customers use
• “It is the same with cell phone banking. We have five million active
customers, three million of whom signed up for cell phone usage – but only
two million use it.”
• Despite this wariness, Bank of the Year Survey showed online banking was
the second-most-used product behind only current or cheque accounts.
• More respondents use online banking than credit cards or mobile banking.
Of those who use mobile banking, 83% said they used cell phones as
opposed to tablets.
• 31% of online banking users said they never went into a branch for services
related to that account.
• 30% visited a branch less than once every three months.
• Capitec has walked away with the gong for top transactional account
in this year’s Bank of the Year Survey.
• It is arguably the most important banking product as it is the closest of all
• Salaries go into these primary accounts, so it is, perhaps, no surprise that
Capitec’s high interest rates on its transactional account has won many
• FNB came in second, followed by Nedbank, Standard Bank and then Absa.
• Capitec’s average scores for each of its products trumped the average
scores of the other banks.
• The researchers said, “It is quite remarkable that this was the case in every
category in which Capitec competes”.
• On its main GlobalOne Account, Capitec offers 4,4% interest – far higher
than its rivals, and it charges only a R5 administration fee a month.
• Fischer said, “This is why people tend to use informal savings tools like
stokvels instead. The fees in banking can often exceed the interest, if any
is paid. With Capitec, it is the other way around.”
• While the bigger banks often tout their product depth as an advantage,
Capitec relies on its simplicity.
• Says Fischer, “The problem with complexity is, how many people really
understand it? Some of our competitors have a fee structure that is a
percentage-based fee over a certain number of transactions, but how
does anyone keep track of that?”
• Fischer does not believe that bank fees are particularly high in
South Africa – it is the the fact that there are often surprises in the fees
that antagonise people.
• It is noteworthy that banks’ willingness to resolve issues quickly and avoid
bureaucracy was scored the lowest of the parameters.
• Proximity of ATMs and branches enjoyed fairly positive reviews, but
communication about products and services were viewed less favourably.
• Costs were rated the lowest, meaning South Africans’ banking gripes
probably centre on fees.
• Just over 70% of all banking customers use a cheque account, while savings
accounts were the second-most popular product.
• More respondents used home loans, fixed-deposit accounts and car loans
than personal unsecured loans and student loans.
• Respondents who voted for their favourite current or transactional account
mostly held only one account (61%).
• 28% held two current accounts and 11% held three or more.
• Just more than half of the respondents had held their primary current
accounts for more than ten years.
• Their chief motivation was to find the cheapest transaction and other
• This was followed by branch location convenience, ATM location
convenience and recommendations from friends and family.
• Every corner shop is now seemingly offering a credit card product.
• Despite the fact that only 8% of South Africans have credit cards, it is a
particularly hotly contested arena.
• The survey looked at the top 20 credit cards and found that existing banks
still largely offer the best cards.
• Investec topped the rankings with a score of 8,4 out of ten followed by FNB,
Discovery and Nedbank.
• Customers liked the fact that with Investec everything “is all combined into
one card”, and it offered “a better package”.
• Discovery pipped most of the major banks with its credit card linked to the
medical aid’s health care reward programme, Vitality.
• Customers said that “most benefit was for those who are with Discovery
Health and Discovery Life”.
• While many complained about credit card costs, the rewards programmes
linked to the card were a factor in luring customers.
• “The card partners with the best car rental companies,” said one customer,
indicating that benefits on offer are considered.
• Another notable feature was that Woolworths’ credit card was judged
better than Absa’s credit card.
• African Bank’s card and SA Airways’ credit card brought up the rear.
• Virgin Money, which billed itself as the cheapest card in the market,
ranked only ninth in the survey.
• One of its customers moaned, “Virgin Money is very quiet. I don’t get to see
its adverts or branding anywhere. The only reason I chose it as a credit card
provider is by going to justmoney.co.za – otherwise, I would have easily
gone with my bank account-linked credit card.”
• Absa, now trading under the banner of Barclays Africa, and Standard Bank
are the biggest losers in the Business Times Intellidex Bank of the Year Survey.
• A decade ago they led the pack in both quantity and quality.
• They still remain on top in terms of market share, but their customers are not
amused by the quality of their service and products.
• “Absa’s customer service is notoriously poor. I have had painful problems
with my home loan in the past to the extent that I seriously considered
moving my account.”
• Another customer described the customer service at both banks as
• Craig Bond, Barclays Africa’s Head of Retail and Business Banking, said
the bank’s “intention is to regain customer and customer dominance in our
• “We are investing in customer channels and infrastructure, rebooting and
relaunching our brands and propositions, and boosting the sales engine.”
• Standard Bank, however, seemed reluctant to discuss why it seems to have
slipped back in customer perceptions.
• One customer said that his time with Standard Bank “has been rough,
especially as I’m a student. For us, times are hard, and Standard Bank is not
near to helping the situation at all.”
• Another customer said that while Absa’s bank fees were high, “it is just a
hassle to change banks due to debit orders and deposits”.
• These comments contrasted with those who banked with Capitec Bank.
The perception of Capitec was summed up by one customer, who said that
the bank made them “smile”.
• Three years ago, only 9% of South Africans who had considered switching
banks actually did so.
• This year’s Bank of the Year Survey showed that 15% of respondents
switched their primary banks in the past year.
• Another 10% said that they were planning to switch soon, and 12%
• The figures showed that Capitec and FNB gained most of these customers,
largely from Absa and Standard Bank.
• Of the customers who switched banks in the past year, 41% moved
to Capitec and 31% to FNB.
• Of those who have not moved banks, the largest group was at FNB.
• The most common reason for switching, according to customers, was lower
charges (35%), followed by lower interest rates on their debt.
• Other reasons cited include:
− Bad service
− High fees
− Better rewards
− Being offered too many products
− Being refused a loan
• Not falling into the trap of offering too many services is one of the reasons
why Capitec is gaining ground on its rivals, according to Carl Fischer.
• “We grew from the low-income end of the market, but now, with our greater
presence in the major urban areas, we have middle-income, higher-income
and middle-aged people joining us.”
• The demographic profiles of the respondents show that very little
differentiates the customers of Capitec from those of other banks in respect
of income, education and location (though it had more customers in the
• “The perception was that it was complex (to switch), but most banks have
stepped in to say they’ll assist customers,” says Fischer.
• “The reality is that it is not so cumbersome, and the stop and debit orders
are the only hurdle.”
• More than half of the respondents in the survey said that they believed
they were getting value for money.
• “Of the 43% who don’t believe they are, only 8% would switch banks
because of charges alone,” said the researchers.
• Most thought ATM charges for transactions were fair, with 29% believing
they were cheap. 40% thought them ‘reasonable’ and 23% ‘excessive’.
• Consumers ought to cheer that their sentiments about their banks – good and
bad – feed through clearly in the share prices of these banks on the JSE.
• This will surprise sceptics, especially as it runs counter to experience overseas.
• A US survey by the American Customer Satisfaction Index this year found that
“customer service scores have no relevance to stock market returns” –
however, in South Africa this is not true.
• If you compare the winners in the inaugural Bank of the Year Survey, the
top performers also performed best on the JSE, while the laggards trailed
• Take Capitec, the winner in most categories – Capitec’s share price rocketed
by 570% over the past five years.
• On the JSE, FirstRand’s share price vaulted 235% over the past five years,
which accords well with the fact that FNB was second to Capitec in
• FirstRand’s car finance arm, Wesbank, came in tops for best car loan
product, edging out BMW and Standard Bank.
• FNB raced to the lead when it came to best home loan product, ahead of
the upstart, SA Home Loans, and then Nedbank.
• FNB’s success comes despite some customers clearly not liking the bank’s
irritating “Steve” adverts, a marketing campaign that one customer
describes as “the biggest scam story I have ever come across”.