Higher rates of interest help to seal the deal for our winner
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 bank-customer relationships. Salaries go into these primary accounts, so it’s perhaps no surprise that Capitec’s high interest rates on its transactional account has won many new followers.
FNB came in second, followed by Nedbank, Standard Bank and then Absa.
The research did not discriminate between transmission and current accounts, but excluded savings accounts.
Capitec’s average scores for each of its products trumped the average scores of the other banks. “It is quite remarkable that this was the case in every category in which Capitec competes,” said the researchers.
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.
Capitec executive Carl Fischer said that while he didn’t believe earning interest was the most important driver behind transactional product satisfaction, it was only fair that customers received it.
“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’s 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’s a percentage-based fee or a fixed fee with a percentage-based fee over a certain number of transactions, but how does anyone keep track of that? He says that while he doesn’t believe bank fees are particularly high in South Africa, it is the fact that there are often surprises in the fees that make people aggressive.
Overall, respondents scored their banks at a collective average of 3.98 out of 5.
Friendliness of staff was rated most highly on average, followed by general service levels by staff. It’s clear in face-to-face transactions — which, unfortunately, represent the highest cost for banking customers — most customers have a good experience.
It is noteworthy that banks’ willingness to resolve issues quickly and avoid bureaucracy was scored the lowest of the parameters.
Rating their banks in other parameters, most customers appreciated the tendency of South African banks to be financially stable and enjoy reputational depth.
Proximity of ATMs and branches enjoyed fairly positive reviews, but communication about products and services were viewed less favourably, and 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%), but 28% held two current accounts and 11% held three or more.
Just more than half the respondents had held their primary current accounts for more than 10 years.
Their chief motivation was to find the cheapest transaction and other account fees, followed by branch location convenience, ATM location convenience and recommendations from friends and family.