The 25 basis point increase in the Overnight Policy Rate (OPR) will benefit fixed deposit (FD) savers after the real rate of return on deposits will return to positive in 2018.
KUALA LUMPUR: More than four-fifth of Malaysians believe the banking sector has a good reputation, 10 years after the global financial crisis and in the aftermath of the 1MDB scandal, according to a survey carried out by MHP Communications.
“Consumer confidence in Malaysia’s financial sector is strong, with 83% of Malaysians saying the sector has a good reputation,” it said on Thursday when it released its inaugural financial services reputation index.
The findings of the survey showed 83% of consumers believe financial services companies have become more trustworthy in the past decade, said MHP Communications, a strategic communications consultancy based in London.
High levels of positivity were also 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.
MHP surveyed over 5,000 adults from Malaysia, China, Hong Kong, India and Singapore, with at least 1,000 respondents per market.
Field work took place from August to December 2018.The data has been taken from a representative of the population between the ages of 18 to 55 in each market.
MHP said 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.
The survey revealed 68% of respondents believe that local banks have a better reputation than their foreign counterparts.
Almost nine 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 survey showed.
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.
It said that 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,” it said.
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%).
MHP Communications CEO Asia Pacific Emma Smith 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.
“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 said.
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