More than 50% of the people with job security concerns have savings to cover less than four months worth of expenses, according to McKinsey & Co in its latest survey report.
The decrease in savings is on a net basis. The most dramatic reductions were found in South Africa and Indonesia, where over 70% of respondents reported declines in both income and savings.
Even though economic sentiments have improved somewhat, job security concerns were constant from May to June as the second wave of Covid-19 rages across some countries.
In Canada, 51% of respondents reduced household spending and only 19% increased it. In contrast, 46% of respondents in Indonesia actually increased spending and only 25% decreased it.
In this stressed environment, what customers want most from their banks is tangible support on credit terms. The report says customers are nearly unanimous in desiring waivers on late fees, and respondents in a number of countries expressed a desire for reduced minimum payments, as well as forbearance on loans and mortgages.
Usage of cash is decreasing as digital payments increase globally.
The recent announcement by Malaysia to extend the loan moratorium by three months for those who have lost their jobs because of the pandemic is surely a good sign. Malaysian respondents feel that the current economy is neutral or weak. They also expect their personal financial situation to remain the same or worsen in the next three months.
They have about four months or less of savings to live on and worry about job security just like their global counterparts.
However, the report says consumers are more optimistic about future economic conditions compared to May, with 45% believing the economy will rebound within two to three months.
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