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Ombudsman for Banking Services Award

2004 - SA Banker Vol.101 No.4

At a gala event on the 28th October 2004, held at the plush Westcliff Hotel in Johannesburg, Nedbank was the recipient of the fourth Ombudsman for Banking Services Award for Excellence in Customer Complaint Handling.

The award scheme was initiated in 2001 to encourage banks to focus on what was then a Cinderella aspect of their business, complaint handling, and to encourage them to treat complaints in a fair, reasonable and professional manner. In effect, the awards were introduced as a proactive, positive reinforcement-centered strategy to supplement the Ombudsman's existing repertoire.
Four of South Africa's leading retail banks - ABSA, First National Bank, Nedbank and Standard Bank, participated in the 2004 survey to establish the best bank, conducted by well-known independent market research company, Markinor. The services of Markinor are retained to avoid tainting the hard-earned reputation for neutrality of the Ombudsman's office and to avoid creating the impression that the Ombudsman's office favours one bank over others in its dealing with them or that it endorses the bank found to be the best at resolving complaints. Markinor picks 400 customers from the clients lists of each of the four major banks from its sampling of opinions.

Intentions to extend the scope of the scheme to encompass the smaller banks were thwarted by the disappearance of several players at this level.

Although not the initial intention, the annually-produced survey results have perhaps become the most valuable aspect of the award scheme, enabling participating banks and the Ombudsman's office to track any deterioration or improvement in service levels. In the OBS's annual report for 2002, it was reported that there had been a decline of 8% in customer satisfaction levels in that year. There was, however, a massive improvement in customer satisfaction levels in the following year in 2003 with 44% more people than the previous year having indicated they were "somewhat satisfied" or "extremely satisfied" with the way their complaints were solved by the respective banks. A total of 91% of those surveyed fell into this grouping. This year, the level of overall satisfaction slipped back to 85%, with "somewhat satisfied" dropping one percent to 26% and "very satisfied" dropping five percent to 33% but "extremely satisfied" remaining constant at 26%. (The fact that this year, only customers with serious complaints involving a financial loss were interviewed, and not also those with non-serious complaints, which were included last year, may account for the difference.)

These levels of satisfaction are still much higher than the results of similar surveys conducted in other countries, for instance, research undertaken by Ernst & Young for British banks showed that over half of customers who made a complaint to their banks were not satisfied with how it was handled.

Perhaps, most tellingly, Markinor researchers are finding it increasingly difficult each year to contact customers who have actually had a complaint against their bank. (It took, on average, ten calls to locate a customer with a complaint this year). This seems to indicate a decline in the absolute number of complaints experienced within the industry.

This conclusion is supported by the fact that the steady increase in the number of complaints reaching the Ombudsman's office has not kept up with the levels of increased awareness of the existence of the office (measured in a separate survey) that has resulted from its nation-wide publicity initiatives.

History of the Awards

The awards were launched in 2001. To the surprise of all, particularly the larger banks, minnow NBS snatched the first award. In 2002, it was ABSA's turn to take the main award. In that year, some secondary awards were also introduced to raise interest levels. The following year, Standard Bank took the honours.