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2 June 2009
Kuala Lumpur
As the global recession trudges on without any sign of respite, it is unsurprising that consumers are exercising increased caution when it comes to their finances. A Nielsen Personal Finance Monitor conducted by global leading research firm The Nielsen Company reveals that Malaysians look for stability in their bank of choice, with three in five (60%) citing well established organization as the key criteria when choosing their main bank. (Chart 1)
After stability, over half (58%) of Malaysians want a bank with a wide network of branches, with one in two (49%) considering ease of transaction an important factor. (Chart 1)
The Nielsen Personal Finance Monitor is the first of its kind, face-to-face survey conducted among 3,890 respondents to gauge the behaviors and attitudes of Malaysian consumers aged 18 to 64 with the objective to provide valuable insights into the changing needs of the financial market in Peninsular Malaysia.
“In the current economic climate it is more important than ever for banks to provide consumers the necessary assurances and convenience to ensure the highest levels of customer satisfaction and retention,” commented Mr Vinod Paul, Director for Financial Services, The Nielsen Company, Malaysia.
The Nielsen survey found that more than nine in ten Malaysians have some form of financial product, the most common being deposit-related. Trailing far behind, in second place, was general insurance, followed by life insurance and loans. (Chart 2)
“Our study found that three in ten Malaysians have some form of outstanding loans, with car loans (19%), home loans (13%) and personal loans (6%) being Malaysians’ most common existing debts,” observed Mr Paul. “Findings also showed that supporting children’s education and down-payment for assets are the main purposes for personal loans, and the most recently drawn personal loan was valued in the range of RM10,000 to RM50,000.”
Despite the world becoming increasingly wired and Internet penetration continuing to grow, Malaysians remain reluctant to take their banking transactions online. The Nielsen study revealed that less than one in ten (8%) of the Malaysia population currently uses Internet banking, with viewing account balances, paying utility bills, fund transfer, and paying credit card bills the most popular online banking activities. (Chart 3)
“Although Internet penetration is now more than 60 percent in Malaysia, a large number of consumers do not see the benefits of Internet banking and remain unwilling to take their banking transactions online,” said Mr Paul. The Nielsen survey uncovered several key barriers to Internet banking. The most common reason, as cited by nearly six in ten (59%) of respondents, was that they do not see the need for it, while other reasons include: not Internet or IT savvy (24%); content with using the current channel (17%); and concerns about security issues (16%) (Chart 4)
According to the Nielsen Personal Finance Monitor, 14 percent of Malaysians own credit cards, and credit card holders on average carry two plastics in their wallets, with over half (52%) swiping their cards between one and three times weekly. “Our report shows that monthly credit card spending averages over RM900, which is considered relatively high when compared to the nation’s average household income. Because of this high spending, more than half (55%) of cardholders rotate their credit to the next month and end up subjecting themselves to the high interest rate imposed by the banks for delayed payment,” observed Mr Paul. (Chart 5)
“The financial industry is very competitive and the current economic uncertainty will no doubt have a great impact on consumers’ choices of banks and banking products and services. For banks wanting to expand their market share, it is imperative that they understand their target consumers’ changing behavior, needs and wants. To attract and retain customers, banks should focus on identifying and addressing customers concerns, and catering to satisfy their needs through taking a customer centric view and offering a variety of alternative options or services developed for today’s busy lifestyle,” Mr Paul concluded.
About The Nielsen Personal Finance Monitor
Nielsen Personal Finance Monitor is a face-to-face survey designed to landscape the financial services industry in Malaysia including banking, life insurance and mutual fund in terms of market/product, as well as brand performances as well as usage and attitudes. Conducted in 3 Nov 2008 to 15 January 2009, the study interviewed 3,890 respondents (AGE 18 to 64) in Malaysia, coverage including the semi-urban and rural areas in the country as well.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in New York, USA. For more information, please visit www.nielsen.com.
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