In a first-of-its-kind announcement, FNB and Standard Bank have been named joint winners of the inaugural Customer Experience (CE) Index for the consumer banking sector in 2024. This new benchmark is poised to transform the way brands evaluate and enhance their customer experience strategies.
Developed and managed by Professor Adré Schreuder, head of the Industry Chair in Customer Experience at the University of Pretoria (UP), the newly unveiled CE Index is a pioneering initiative in South Africa, distinguished by its formal university support. The index aims to provide a credible and scientifically robust way to measure the entire end-to-end customer experience.
Additionally, it represents the most comprehensive banking industry index to date for consumers, collating insights from a massive sample of 29,898 participants that includes six banking channels and nine banking products. The five largest consumer banks by market share – namely Absa, Capitec, FNB, Nedbank and Standard Bank – were included in the study.
FNB, a leader in a previous satisfaction index for many years, now shares the top position and has been awarded winning status in five categories, including best online banking, ATM services, relationship management, loyalty and rewards programmes (with the popularity of eBucks once again proving difficult for competitors to match), and savings & investments.
Meanwhile, Standard Bank improved its previous overall ranking in customer experience to become a shared industry winner and snagging five category wins: best banking app, branch services, contact centres, credit cards, and home loans.
Absa further walked away with four category wins, Capitec with two and Nedbank with one.
“The CE Index represents a mirror that reflects what customers really think of top banking brands, providing an independent and credible benchmark through rigorous, scientific measurements of customer experiences, and utilising truly holistic data and statistical analysis,” says Schreuder.
“The shared industry win and different portfolios of category wins demonstrate just how seriously South African banks are taking customer experience, and every winner can be congratulated for distinguishing themselves in this intensely competitive field.”
A leap forward for measuring customer experiences
The CE Index is unique from other indices and surveys due to its transparent methodology and rigorous quality governance. Rather than limiting its scope to metrics such as customer service or satisfaction, Schreuder’s model captures multiple factors that influence and shape real-world customer experiences through complex cause-and-effect relationships. These include the quality of the interaction, perceived value, satisfaction with the experience, problem resolution, and customer loyalty.
As proof of concept, the model underwent thorough scientific and scholarly review before being piloted in a major national research campaign in 2023 focused on banks, medical-aid schemes, and insurers. This involved over 12,000 face-to-face interviews that were later included in the CE Index’s statistical analysis and final causal model.
“We often see other measures that only concentrate on narrow measurements, or rely on partial, black-box metrics, while we wanted to achieve a true and full picture of how customers experience their products and services in this real-world model. The goal of the CE Index was to design a transparent, scientifically proven, and comprehensive model that will be used as a benchmark that industry players and consumers could both trust.”
He points to the example of visiting a restaurant to illustrate the model’s underlying logic. The waiting staff is knowledgeable and attentive, the atmosphere is inviting, the service is efficient, and the dinner arrives perfectly cooked. But when the bill totals an unexpectedly high amount, customers may still feel overcharged.
“Quality alone doesn’t define the experience,” he explains. “Perceived value is critical. In turn, when customers reflect on this experience and whether it met their expectations, this will define their overall satisfaction and, consequently, loyalty. Similarly, an adequate resolution to a problem or query can influence satisfaction, and potentially restore a dissatisfied customer’s brand loyalty and positively influence their future behaviour.”
Differences between the CE Index and Net Promoter Scores
The CE Index also considers the influence of loyalty metrics such as Fred Reichheld’s famous Net Promoter Score, introduced in 2003 to measure customers’ likelihood to recommend a product or service.
The CE Index included likelihood-to-recommend, allowing it to publish Net Promoter Score results within its model, which placed FNB in the lead with 37.3 points, followed by Standard Bank at 34.9, and Capitec at 33.4.
However, recognising the limitations of the Net Promoter Score, the CE Index’s Loyalty Index includes more than just a customer’s likelihood of recommending a service provider, but also their likelihood to stay and buy more. Most importantly, it also measures whether the customers interviewed have actually recommended (a metric called ‘stated recommendation’) or spoken positively about the brand – a feature never before seen in any customer experience model.
“Recommendation is more than a stated intention. Our model captures whether consumers have recommended a bank, spoken positively about their experience, and whether they will continue the relationship by purchasing more products or services from the brand themselves. This composite Loyalty Index combines intention and stated recommendation behaviour, which is a first in any index,” states Schreuder.
As a result, the index found that the real recommendation rate for South African banking customers was between 19.2% and 23.2% – an average of one in five customers.
An executive summary of the 2024 consumer banking industry report is available on the CE Index website, and subscribers have each received a full report that features their own results and competitor scores, providing valuable insights for improvements.
Given the momentum sparked by the CE Index, Schreuder now aims to expand the model across all major industries, culminating in a National Customer Experience Index for South Africa.
“The index is about creating a fit-for-purpose, credible tool that can be used to elevate service experience standards and empower consumers to make more informed purchasing decisions. Our ultimate vision is for every business and industry to benefit from a deeper understanding of the current state of customer experiences.”
