Confidence in digital banking is rising in Malaysia but consumers want a better online experience and more personalized offerings, according to the new Asia-Pacific focused Bank of the future survey revealed on Friday from Capco, the global technology and management consultancy.

Capco surveyed 999 consumers in Malaysia with a focus on Kuala Lumpur (46 percent of respondents) and selected urban areas to gauge their attitudes to banking services at a time of rapid change in the retail banking industry. The findings form part of a larger survey of nearly 5,000 consumers across five key markets in the Asia-Pacific region.

Asked to identify areas where banks should focus to deliver a better online experience, Malaysia respondents selected mobile apps (61 percent), easy and clear navigation (60 percent) and money transfers (60 percent).

Banking services that are more tailored to customers’ individual needs also emerged as a key regional theme in the survey. Almost seven in 10 (68 percent) Malaysian respondents said they would at least consider sharing the personal data required to facilitate such enhanced personalization, including 28 percent who said they would ‘definitely’ share such data.

Of those willing to share their data, respondents said they would allow access to location data (47 percent), life event data (46 percent), and health test data (41 percent).

There was more reticence around wearables data (33 percent of respondents) and social media data (32 percent), and the least popular choice was data from other bank accounts (22 percent).

Key themes to emerge from the Malaysia survey include:

1. Malaysian respondents are concerned about sustainability – 39 percent said the sustainability credentials of banking services such as their stance on climate action are ‘extremely important’, a markedly higher percentage than those responding to its Hong Kong survey (27 percent of respondents), for instance, though lower than in Thailand (52 percent).

2. Rising confidence in digital banking over the last two years – 78 percent of Malaysia respondents said their confidence in mobile and digital banking services has increased over the last two years, including 28 percent who said they were ‘significantly more confident’. Three-quarters (75 percent) of respondents now use mobile apps to access banking services, underlining the degree to which the future of banking services is digital. Other digital channels surveyed included desktop/laptop (59 percent) and wearables (9 percent); non-digital channels included branches (41 percent), phone (41 percent) and mail (15 percent).

3. Consumers are open to the idea of banking services in the metaverse – 30 percent of respondents were ‘definitely’ interested in buying banking services via the still emerging metaverse. The metaverse, which has the potential to be a significant banking channel over the next decade, is a more attractive option for the younger age groups surveyed, with the percentage of respondents stating a ‘definite’ interest increasing to 37 percent among 25 to 34 year olds.

“Our survey indicates that bank customers are looking for intuitive, transparent and frictionless digital experiences. Malaysian consumers are willing to consider sharing various kinds of data to unlock personalized products and services that align with their individual needs and values,

“Banks have an opportunity to reimagine their role in customers’ daily lives, and in particular explore how hyper-personalization can more effectively align banking services within customers’ lifestyles in order to address their ambitions and anxieties,” said Paul Sommerin, Partner and Asia Pacific (APAC) Head of Digital and Technology at Capco.
James Arnett, APAC Managing Partner at Capco, said retail banking services across Asia-Pacific are undergoing a seismic transformation.

“Digital-savvy, mobile-oriented consumers are playing a key role in reshaping banks’ priorities and the wider banking ecosystem. New technologies are granting consumers unprecedented freedom to pick and choose how they engage with their bank(s), access more personalized services, and see a more complete single view of all their finances,

“As incumbent banks and their competitors aim to support consumers’ personal and lifestyle ambitions, our survey findings throw new light on the priorities that will define the bank of the future,” he added.

The survey was conducted online during September and October 2022 and collected responses from a total of 4,889 respondents in five Asia-Pacific markets.

Individual samples sizes – Hong Kong: 707; Greater Bay Area (ex-Hong Kong): 1293; Singapore: 1,000; Thailand: 890; Malaysia: 999. Survey respondents were drawn from six age groups – 18 to 24, 25 to 34, 35 to 44, 45 to 54, 55 to 64, and 65+ – and sample sizes were representative of age-related demographics in each market.

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