Service shocking in SA banks

The empirical research carried out by international consultancy House of Performance highlights a range of shortcomings throughout the SA's Big Four banking groups.

The study involved researchers visiting eight Gauteng branches of the Big Four - Standard Bank, Absa, First National Bank and Nedbank - plus small bank Capitec, with a list of scripted issues and testing processes and the responses of branch staff.

None of the banks substantially stood out from their peer group in terms of service - nor did any of the banks score particularly high on issues such as solving customers' problems, waiting times or productivity.

Researchers found bank processes focused on procedures rather than solving customers' particular problems. However, the banks defend their focus on procedures as necessary to combat fraud and other security issues - but the research indicates that does little to improve customer perceptions.

Waiting times are long and unproductive. On average, South African bank clients spend 71% of their time in a branch waiting to be served, with researchers reporting waiting times of up to 70 minutes to see a consultant to resolve even simple issues.

Of the time spent with a consultant, the clients spend only a small percentage of that explaining what their particular needs might be. Researchers estimate that only 5% of clients' time at a bank branch is spent articulating their needs.

Banks also fail to capitalise on the marketing opportunity presented to them by their captive audience, with cross-selling of products and services relegated to staff often referring customers to bank literature.

In recommendations put to the banks, House of Performance points out there's a great deal of room for improvement, particularly when it comes to cross-selling. "European banks are aiming for a cross sell ratio of three products per customer; South African banks currently operate on a ratio of between one and one and a half," says Marco Glastra, MD of House of Performance in SA.

One of the primary causes of the service shortfall may be as a result of the rapid expansion of SA's retail banking market. While client numbers have surged, there hasn't been a commensurate increase in branch numbers. Rapid staff turnover is often cited as a reason for poor service.

Despite client dissatisfaction concerning service levels South African bank charges remain among the highest worldwide, as revealed in exclusive studies carried out for Finweek by Deloitte and Horwath Forensics.

Banks have also encouraged customers to use electronic channels to alleviate pressure on their branch networks. They've priced electronic options more attractively, making it more expensive for clients to use branches. Clients without access to electronic channels are therefore likely to be lower income earners, who pay higher fees for service levels - which, according to the House of Performance research, can be best described as inadequate.

Researchers found bank staff and managers - especially in banks that more heavily incentivise their staff - were more focused on shifting product rather than addressing clients' concerns.