South African banks are rated globally as sound and strong, with international banking advisory groups applauding the stability of service in corporate and retail banking.
The stock trading industry on the other hand, is dominated by complacency and a lack of transparent customer service.
Currently, the industry is dominated by brokers and banking professionals making deals the general South African population don’t fully understand. The general belief is that trading on the stock exchange, particularly abroad, is reserved for those who know how to do it. And brokers and banks are happy to operate with limited customer service.
“Banks and brokers are complacent,” says Mexem CEO Itai Liptz, “They are comfortable with their X amount of clients who they charge high fees to invest in a market and share little about where their money is being invested.” Furthermore, clients are not informed enough to invest in anything beyond their trusted brokers.
“As a result, South Africans are left to trusting their financial advisors to invest on their behalf and paying the high fees, even if they are unsure of where the money will go,” says Liptz.
The truth of the matter is that anyone with the right information and support can trade on the stock exchange. The opportunities for South Africans to invest their funds at low fees and put themselves in a better financial position are there. Regardless, the gross rate of savings for the entire population remains at 3%.
Liptz says brokers don’t share enough detail to empower clients to make more investment decisions on their own. The lack of knowledge makes transparent customers service all the more important for customers.
The current status quo
The last two financial years have been tough on South Africans. Evidence of cost cutting is everywhere, with heavy reliance on loans to stretch the monthly budget. After-tax income is not keeping up with inflation, making South Africans more protective of their limited savings.
Coupled with extra financial stress, confidence in the South African economy is still low. Trust in traditional banking systems is low with fear of fraud and poor customer service central to this.
“Money is so important today and South Africans need to feel confident in the investments they make with the limited savings left at the end of the day,” says Liptz, “That’s where customers service is important.”
What does customer service look like in the industry?
Customer service means engaging with clients, solving their problems, finding them the best returns and informing them of their investment options with personalised communication. Non-traditional players emerging in the industry are disrupting this complacency by providing digital solutions and always-on customer support.
Mexem.co.za is a trading platform that empowers customers with accurate and relevant trading advice. The online trading platform makes it easier and more accessible for South Africans to trade locally and internationally at low costs, with always-on access to your account and customer service 16 hours a day, 6 days a week.
“We also send clients signals informing them what shares to invest in and when via emails and SMS,” says Liptz, “It is about going above and beyond for the client, even if they have small investments with us, they have the support and confidence to know their investments are being looked after.”
This is not unheard of. According to Liptz, Mexem is in line with American customer service standards. American trading markets are highly saturated. Banks and brokers have to stay competitive with efficient and ever-evolving customer service.
In South Africa though, Mexem is an anomaly. Top investment firms are complacent and clients don’t know how to ask their financial advisors the tough questions.
Why banks need to invest in customer service
Liptz says banks are not hungry enough to invest in customer service because they are comfortable with a product that works.
“This is a mistake and a missed opportunity for even greater investments,” says Liptz, “A client who feels supported and empowered with the right information will ultimately invest in more products, providing more commission for banks simply because they have the confidence to do so.”
The approach to personal finance is evolving where people want more knowledge and control over their investments. Clients are looking to partner with emerging trading companies like Mexem, where there is transparent financial services and empowered investment opportunities.
Trust is earned, but confidence is maintained with support and engagement. It’s time the industry gets onboard and provides the customer service potential investors need.