KUALA LUMPUR (May 29): Malaysian consumers are more comfortable opening bank accounts on their smartphones than consumers in the US and Canada, according to a survey released by FICO, a global analytics software firm.
The survey showed that 23% of Malaysians prefer to open a bank account on their phone, compared with 18% in the US and 16% in Canada.
In a statement on the survey findings, FICO said the study also showed that digital account opening is rapidly becoming the norm in Malaysia.
Some 78% of consumers participating in FICO’s Consumer Digital Banking Survey indicated that they would open some kind of financial account online.
Of those consumers that would open a financial account online, 65% of them would consider doing so for an everyday transaction account, 45% for a credit card and 28% for a personal loan.
“It is not surprising that Malaysian consumers are digital natives,” said Subhashish Bose, FICO’s lead for fraud, security and compliance in Asia Pacific.
“It is demographically a young country, with 80% of the population under the age of 50. Plus, the Malaysian government is actively encouraging development and investment in the digital economy which makes up about a fifth of the country’s GDP. These factors have promoted a digital-first consumer base,” Bose said.
Leading the digital push, said FICO, were 25- to 34-year-olds, with 76% of them saying they would open a bank account online.
However, it dropped to 49% when it came to consumers who are 45-55 years old, but interestingly climbed back up to 61% for those aged over 55.
“Malaysian households are often multi-generational. So, this finding might be explained by younger generations helping their grandparents with their banking, especially if they are less mobile and can’t get to a branch,” Bose explained.
“As consumers’ reliance on online services grows in response to Covid-19, we expect further shifts in adoption and indeed an acceleration and acceptance in opening bank accounts digitally.
“It is important that banks closely examine any points of friction in their application process to ensure consumers are not abandoning a process or switching to a competitor,” he added.
Malaysians expect account opening to be fully digital
FICO said its survey found that a large percentage of Malaysians had an expectation that they should be able to complete all aspects of account opening online or on their phone.
Out of the regular identity checks needed to open an account, 78% of Malaysians thought they should be able to prove their identity by scanning documents or providing a selfie, 46% expected to prove where they live without moving offline and 40% said they should be able to set up a biometric such as a fingerprint scan at account opening.
If all actions required to complete an account opening cannot be accomplished in-session, only 45% of respondents said they would carry out the necessary offline actions as soon as possible and 23% said they would abandon opening the account.
Overall findings demonstrated that financial institutions that don’t facilitate a completely digital account opening experience could lose over 40% of their new business.
“There is research to show that only 6-9% of applicants move through the funnel and complete the process,” said Bose.
“The most important metric that banking executives need to understand is the difference between application completion for authenticated versus non-authenticated applications, as well as how many applicants with saved or abandoned applications return to complete the process,” he added.
FICO said its online, quantitative survey involved 5,000 adults across 10 countries, and was carried out by an independent research company.