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The market research conducted highlights which banks are perceived to be the most innovative in the industry in 2010. Further analysis delves into why this is so, and how this perception about the banks has changed since the 2007 study.
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2010 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 InnovationAgency. This material was
produced by InnovationAgency based on client interaction; it is not a complete record of the discussion.
About the Banking Innovation Study
2010 Banking Innovation Study Results
Trends 2007 – 2010
About the Banking Innovation StudyPurpose of the Innovation Study
Research methodology
Survey questions
Respondent demographics
Page 4
Purpose of the Innovation Study
In the highly competitive market that organisations in South Africa find themselves, ameans of differentiation is of paramount importance. Innovation is seen as one of theprimary drivers in achieving this differentiation.
This study investigates a number of aspects surrounding the level of innovation beingachieved by organisations, as perceived from a localised end-user perspective. Thestudy also looks at the level of customer satisfaction with their bank; whether they useother 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 mostinnovative in the industry. Further analysis delves into why this is so, and how thisperception about the banks has changed since the 2007 study.
The study also serves to create a greater awareness around the concern that banksneed to be responsive to customers’ emotional needs. The core purpose underpinningthis initiative is a strategy for managing the information acquired and turning it intoinsights that empower customers in new ways.
Page 5
Research methodology
This report provides insight on the study conducted during 2010. This is anadministered survey conducted during various programs and workshops offered byInnovationAgency.
The survey was administered in a controlled manner. Survey questions were designedto be opened-ended in nature, and served to gauge individual perceptions around thelevel 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 tographically represent the results of study. The 2010 Innovation Study consisted of456 respondees.
Page 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 12 – 18 months?
•Why did you switch banks?
•Why have you not switched banks?
Key thoughts
Page 7
Respondent demographics
• Study respondents represented a widespread of individuals, from various backgrounds
• 95% of the respondents held primary bank accounts with one of the Big 4 banks
Female41%
Male59%
Male vs. Female
Coloured13%
Indian22%
African28%
White 37%
Population group
0%
5%
10%
15%
20%
25%
30%
20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60+
Age Distribution
0%
5%
10%
15%
20%
25%
150k -250k
251k -350k
351k -450k
451k -550k
551k -650k
651k -750k
751k -800k
850k -1mil
1.1mil -
2.6mil
Income Distribution
2010 Banking Innovation Study ResultsMost innovative bank
Reason for rating a bank innovative
Lessons from innovative banks
Switched banks in the last 12 – 18 months
Reason for switching banks
Reason for not switching banks
Key thoughts
Page 9
Most innovative bank
• FNB has consistently been recognised as the leader in innovation
• Standard Bank has made progress and closed the gap on FNB
• Capitec has appeared on the rankings for the second year now
0%
5%
10%
15%
20%
25%
30%
35%
BoE HSBC None RMB Investec Capitec ABSA Nedbank Standard Bank
FNB
FNB perceived as most innovative because of
• First to market with new products
• Exciting opportunities and innovative products
• Million a month account
• In-Contact SMS notification
• Ability to think outside the box
• Internet and cellphone banking
Key thoughts
Page 10
Reason for rating a bank innovative
• Banks are rated as innovative due to the following reasons:
• Products
• Technology
• The results imply that customers enjoy the convenience that the banks’ technology offers, that allows them remote access to the banks’ products and services
• Banks are loved for their products and their technology. This is a clear indication that the customer interface is where innovation is most appreciated and recognized
• Great customer service is not high on the list of reasons for being considered innovative
0%
5%
10%
15%
20%
25%
Key thoughts
Page 11
Lessons from innovative banks
• “Its about understanding me and making it easier for me to interact with you…”
• The prominence of “Client Centricity” is another indicator that the customer interface is where innovation is most appreciated and recognized
• The products and technology that make it easier for customers to interact with their bank are clearly important
0%
2%
4%
6%
8%
10%
12%
14%
16%
Key thoughts
Page 12
Switched banks in the last 12 – 18 months
• Despite some strong criticism, people are still unlikely to switch banks
• 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
Yes9%
No91%
Key thoughts
Page 13
Reason for switching banks
• Despite the high percentage of people hating banks because of their service, it is still not enough to make them switch
• This suggests that there may be a combination of reasons that drive customers to switch
• The results also imply that customers would rather stay with the bank they know despite the bad service levels, than switch to an unknown bank
• Service levels looks to be the top factor that customers find to be important when considering to switch banks
0%
5%
10%
15%
20%
25%
30%
Key thoughts
Page 14
Reason for not switching banks
• The results imply that customers may find it too cumbersome a process to switch banks
• The results also suggest a degree of apathy from customers
• A number of the respondents indicated banking with their employers
• Results also indicate that good service levels are an important factor to customers
0%
5%
10%
15%
20%
25%
Trends 2007 – 2010Most innovative bank
Reason for rating a bank innovative
Key thoughts
Page 16
2007 – 2010: Most innovative bank
• 2008 had the highest “no response” rate, coincidentally during the height of the financial crisis
• FNB looks to be recovering from the sharp fall in 2008
• Standard Bank has been consistently gaining ground since 2007, and closing the gap on FNB
• Capitec did not feature at all in 2008
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2007 2008 2009 2010
FNB
Standard Bank
Nedbank
ABSA
Capitec
Investec
RMB
Other
Key thoughts
Page 17
2007 – 2010: Reason for rating a bank innovative
• “Technology” trends suggest that customers have become more concerned with managing their finances better
• “Technology” rose to become the number one reason for rating a bank innovative
• “Products” fell sharply in 2008, from a peak in 2007
0%
5%
10%
15%
20%
25%
30%
2007 2008 2009 2010
Technology improvements
Products
Marketing
Well managed
Company strategy
Good service
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