2012 Banking Innovation Study South Africa

Transcription

1 2012 Banking Innovation Study South Africa This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from Innovation Agency. This material was produced by Innovation Agency based on client interaction; it is not a complete record of the discussion.

2 About the Banking Innovation Study 2012 Banking Innovation Study Results Trends

3 About the Banking Innovation Study Purpose of the Innovation Study Research methodology Survey questions Respondent demographics

4 Purpose of the Innovation Study In the highly competitive market that organisations in South Africa find themselves, a means of differentiation is of paramount importance. Innovation is seen as one of the primary drivers in achieving this differentiation. This study investigates a number of aspects surrounding the level of innovation being achieved by organisations, as perceived from a localised end-user perspective. The study also looks at the level of customer satisfaction with their bank; whether they use other banks and what would entice a customer to switch from one bank to another. The market research conducted highlights which banks are perceived to be the most innovative in the industry. Further analysis delves into why this is so, and how this perception about the banks has changed since the 2007 study. The study also serves to create a greater awareness around the concern that banks need to be responsive to customers emotional needs. The core purpose underpinning this initiative is a strategy for managing the information acquired and turning it into insights that empower customers in new ways. Page 4

5 Research methodology This report provides insight on the study conducted during 2011 and This is an administered survey conducted during various programs and workshops offered by Innovation Agency. The survey was administered in a controlled manner. Survey questions were designed to be opened-ended in nature, and served to gauge individual perceptions around the level of innovation achieved by institutions from an end-user perspective. Respondents were not given information and/ or definitions of the survey questions. Data collected was grouped and analysed and keywords created as a means to graphically represent the results of study. The 2012 Innovation Study consisted of 388 respondees. Page 5

6 Innovation Study questionnaire The study questionnaire consisted of the following questions: Which bank is the most innovative? Why did you rate the bank as the most innovative? What lessons can be learnt from innovative banks? Have you switched banks in the last months? Why did you switch banks? Why have you not switched banks? Page 6

7 Key thoughts Respondent demographics Study respondents represented a widespread of individuals, from various backgrounds Gender split Male 58% Female 42% 35% 3 25% 2 15% 1 Age distribution 5% Population group Asian 3% Australian 25% Income distribution 2 White 48% Black 2 British Coloured 11% Chinese 15% 1 5% Indian 17% European Spanish 1% Polack Netherlands Page 7

8 2012 Banking Innovation Study Results Most innovative bank Reason for rating a bank innovative Lessons from innovative banks Switched banks in the last months Reason for switching banks Reason for not switching banks

9 Key thoughts Most innovative bank FNB has consistently been recognised as the leader in innovation, with 5 of the ratings as the most innovative bank FNB has had many product and services launched, including the most recent smart phone banking application; the first of its kind from a South African bank FNB Capitec Absa Standard Bank Investec Nedbank Wesbank RMB Foreign bank FNB perceived as most innovative because of Capitec, despite being a relatively new player, had the 2 nd most ratings ahead of Standard Bank, Absa and Nedbank Page 9 They bring innovation to the public quicker Has products tailored to meet customers wants and needs They make banking easier for clients and a pleasure to do banking Advanced cellphone banking offering to tap into new markets They cover all generations in their offering They always come up with interesting marketing campaigns

10 Key thoughts Reason for rating a bank innovative Banks are rated as innovative due to the following reasons: Technology Products The results may be an indication that customers aren t necessarily looking for tailored solutions but rather a means to do their everyday banking easier and when they want to and whenever they choose Technology Products Processes Customer service Banking easier & simple Innovative culture Marketing Time to market Internet banking Customer centric Targeted market Fees and rates Mobile banking Client solutions Accessible Leaders Business model 2% 4% 6% 8% 1 12% 14% 16% Banks are loved for their Technology and their Products. This is a clear indication that the customer interface is where innovation is most appreciated and recognized Notably, bank Fees and rates were not high on the list of reasons for banks being considered innovative Page 10

11 Key thoughts Lessons from innovative banks The varied responses to this question may also suggest that customers look beyond the obvious product development when differentiating from different banks The top 5 reasons illustrate that customers feel that banks should be customer focused in order to be regarded as innovative Encourage innovation Technology improvements Customer centricity Keep it simple Customer service Processes Marketing Time to market Risk management Individualised solutions Challenge the status quo Lead Flexibility/ adapt to changes Implementation cycle Understand market needs Targeted market People Company strategy Business model Products 1% 2% 3% 4% 5% 6% 7% 8% 9% 1 The results may be an indication that customers are becoming familiar with innovation as a concept, enough so to use this as a means of differentiation between the different banks Through the banks various offerings, banks are also looking at innovative ways retain existing clients and also grow their customer base Page 11

12 Key thoughts Switched banks in the last months Despite some strong criticism, people are still unlikely to switch banks Yes 11% No 89% Despite some vehement criticism only a small percentage of people have actually switched banks in the past few months. This indicates that there is still a degree of loyalty or perhaps that it is just too difficult and inconvenient to switch Page 12

13 Key thoughts Reason for switching banks The results may indicate that it may be a combination of reasons that customers switch and not just a single one Consumers have become price conscious possibly as a results of the financial crisis The low numbers of respondees who have switched may also imply that customers would rather stay with the bank they know despite the bad service levels, than switch to an unknown bank Customer service Fees and rates Employed by bank Products No customer focus Innovative Inflexible Internet banking Offered international banking Technology Relocated Processes Perception Not innovative Needs weren't met Needed the change Made errors Less queues Consolidate portfolio 5% 1 15% 2 25% Customer service; Fees and rates did not rank highly in the most innovative bank category. They were however, the top two rated reasons that respondees indicated for switched banks Page 13

14 Key thoughts Reason for not switching banks The 2 nd highest reason given was that switching would be too cumbersome a process, suggesting that customers would switch if they thought it an easy process to do Customers may also find the banks offerings too ubiquitous and see no value to be derived by switching to another bank Satisfied with bank Too cumbersome Employed by bank Customer service No reason to Fees and rates Planning on switching Loyal No benefit to switching Time consuming Outstanding debt Convenient Closed an account Better value/ options Internet banking Risky to switch 5% 1 15% 2 25% The results of this question may be used to gauge customer satisfaction levels with their bank Over 2 of the respondees indicated to be either satisfied or happy with their bank Page 14

15 Trends Most innovative bank Reason for rating a bank innovative

16 Key thoughts Most innovative bank Despite the dominance of the Big Four banks in South Africa, Capitec continues to receive recognition in this category FNB Capitec Absa Standard Bank Investec Nedbank RMB FNB continues to hold the lead position in this category and has surpassed the results from the 2007 study Standard Bank has had the biggest drop since 2010 levels to see it ranked 3 rd to below the 1 mark, ahead of Absa Page 16

17 Key thoughts Reason for rating a bank innovative The trend from the reasons given also look to be converging from 2010 levels, where previously there were more clearer distinctions from the top and bottom reasons given for rating a bank innovative 35% 3 25% 2 15% 1 5% Technology Products Processes Customer service Simplicity Innovative culture Technology as a reason for rating a bank innovative has regained top position once more ahead of Products Innovative culture was previously insignificant a reason to mention. Many respondees in the 2012 study, however, recognised innovation as one of the top reasons for rating a bank innovative Page 17

18 About Us We live in a socially aware society where involvement across a collective workforce community is used to drive innovation. Social Based Innovation approaches pave the way to a more networked and integrated means of managing innovation. We are driving this evolution forward. United Kingdom London 81 Oxford Street London W1D 2EU Tel: +44 (0) Fax: +44 (0) Uganda SystemicLogic East Africa Limited Plot No. 254 Albert Cook Road, Rubaga, Kampala, P. O. Box 70770, Clock Tower, Kampala Tel: Australia Melbourne Level Collins Street Melbourne, 3000 Tel: +61 (0) Fax: +61 (0) info@systemiclogic.com.au South Africa Johannesburg Peregrine Building 6a Sandown Valley Crescent Sandton, 2194 Tel: +27 (0) Fax: +27 (0) sl@systemiclogic.net Sydney Level Bridge Street Sydney, NSW 2000 Tel: +61 (0) Fax: +61 (0) info@systemiclogic.com.au Global Contact info@innovationagency.com