In the inaugural Financial Services Reputation Index for Malaysia, released by MHP Communications, it is also revealed that 83% of consumers believe financial services companies have become more trustworthy in the past decade.
Ten years on from the global financial crisis and in the aftermath of the 1MDB scandal, consumer confidence in Malaysia’s financial sector is strong, with 83% of Malaysians saying the sector has a good reputation.
Emma Smith, MHP Communications, CEO Asia Pacific said: “Despite the challenges faced by Malaysia’s financial sector in the past year, following the developments at 1MDB issues and change in government, the sector’s reputation remains surprisingly resilient. We see local banks leading trust in the country’s financial sector, with bankers outranking police, politicians and lawyers in the trust stakes. Consumers have also shown their loyalty to local brands – with these strongly outperforming foreign competitors.”
Ms Smith continued, “Increasing digitalisation is providing both opportunities and challenges in financial services with consumers showing both high concerns around data security, while digital services are also seen as a key driver of reputation. With consumers’ expectations of the role that the private sector should play in society increasing, we see that whether a company is a responsible corporate citizen, good employer or gives back to the
community, have become more important to consumers. I expect we will see this trend increase,” she ended.
High levels of positivity were seen across Asia, with 90% of respondents in Singapore and India rating the industry’s reputation as good, as well as 82% and 84% in China and Hong Kong respectively. These findings are in marked contrast to sentiment in the United Kingdom, where only 53% of respondents polled were positive.
Banks Most Trusted
Almost 9 out of 10 Malaysians (88%) view their banks positively, with an almost equal number believing that local payment system companies have a good reputation (87%). However, trust falls away for industries in venture capital (73%) and private equity (72%).
Malaysians also ranked bankers as the most trustworthy profession in the country (60%), followed by journalists (38%) and the police (36%). This sentiment was not shared for politicians/government officials, who were the least trusted among the professions asked (12%), potentially due to a lack of public confidence in previous administrations and also from the reputational fallout of various Government-linked financial scandals.
The top five most trusted financial services brands are all Malaysian banks – Maybank, CIMB, Public Bank, RHB Bank and Hong Leong Bank, representing greater consumer trust in local brands. 68% of respondents believe that local banks have a better reputation than their foreign counterparts.
The Digital Dilemma
When asked about the digitalisation of financial services, almost half of Malaysian consumers (46%) say that greater use of technology has increased their trust in financial services companies. 88% also believe that new and emerging digitally-based financial services providers are either equally or more trustworthy than traditional firms.
However, Malaysian consumers also identify data security (27%) as their number one concern with financial services. This is followed by honesty (20%); performance of products (17%) and their own financial literacy (15%).
Online peer-to-peer lending has some ways to go towards building trust with consumers. More than half (53%) of consumers in Malaysia consider these platforms to be highly risky. 14% of consumers rated them at the maximum level of “Very High Risk”, the same as investing in stocks and shares.
What’s Driving Reputation?
In Malaysia, 66% of respondents attribute the increase in trustworthiness in the financial services sector to increased regulation aimed at protecting consumers, with 46% stating that increased competition had improved practices.
When asked about what actions the sector can take to enhance its reputation in Malaysia, 59% of respondents said they wanted to see better products and customer service in financial services.
The three most important reputation criteria for respondents when choosing a financial services company in Malaysia are if the organisation operates responsibly (80%), is a good employer (76%) and if it gives back to the community (73%).