Absa says its investment in technology is helping to change customer perceptions of its retail bank offering.
The bank, like others in the industry, has invested large sums to give its operations a more digital flavour, after having largely been seen as a laggard in this regard.
The country’s biggest banks have had to retrofit new systems onto the old, with varying levels of success. This is not just one bank’s problem. The industry has to invest as a collective in upgrading the system.
The managing executive for technology and operations at Absa everyday banking, Thato Matolong, told Business Day that its investment in technology had turned around its image as a laggard.
“A few years ago, we found ourselves at the bottom of the SA customer satisfaction index (Sacsi) and the most complained-about bank among our peers, according to the banking ombudsman, which presented the opportunity for a tech led transformation,” he said.
“Our key focus on improving customer satisfaction and resolving complaints coupled with years of investment in our core customer facing capabilities has caused us to move from market lagging to market leading in customer satisfaction.”
Part of this push has come through the bank’s partnership with, and use of, Salesforce. The US tech giant is a specialist in customer relationship software and systems.
Data from Apple’s iOS App Store and Google Play Store for Android devices shows that Absa has one of the best-rated SA banking apps.
“Absa is one of the leading banks in terms of app store ratings among banking apps with high-volume customer ratings,” Matolong said.
“Our ambition is to continuously improve our customer experience performance, responsiveness and overall digital performance to further improve our store ratings. In future Absa aims to maintain a leading position in terms of its app ratings in the market.”
He said this data point was also emphasised by a voice of customer score above 90% and a positive net sentiment social media score of 50.4%.
Absa has a presence across 10 countries and services about 12-million customers, predominantly in SA.
In the most recent financial year, to end-December, information technology (IT) made up 11% of the bank’s operating expenses at R6.05bn. At the half year to June, Absa recorded a 14% increase, indicating annualised IT spend of about R6.7bn by end-2024.
The lender said this reflected investment into new digital capabilities resulting in higher cybersecurity, software licence and maintenance costs.
Absa also incurred other IT-related costs in the interim period, including R1.6bn in amortisation and depreciation, R2bn on staff, and R710m in other spend.
Rival Standard Bank has also been working to clean up its technology image and offering. The bank recently reported that its mobile app experienced a 13% increase in the number of clients and more than 140-million logins per month in the half year. This resulted in a 33% increase in digital revenue.
Total technology function spend in the period stood at R11.05bn, up 2% from the previous comparable period. This amounts to an annualised spend of R22.1bn, in line with similar costs incurred for the 2023 full year.
Most of the bank’s IT spend is on software, cloud and technology, with staff being the other major cost driver.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.