Banks face Asia challenge

22 March 2012

SINGAPORE: The number of consumers who would recommend a banking brand in Asia Pacific is in decline, posing a problem for financial services providers across the region.

McKinsey, the consultancy, surveyed 20,000 people in 13 nations, and found the typical customer satisfaction score in the category had reached 76%, growing to 96% for the Indian panel.

Consumers in "developed Asia" – i.e. Australia, Hong Kong, Japan, Korea, Singapore, and Taiwan – had increased their number of banking relationships by 20–30% year on year, with "mass affluent" shoppers dealing with 4.7 companies.

In the "emerging Asian" markets of China, India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam, respondents held an average of 2.1 banking relationships, a figure which is also slowly rising.

More broadly, 48% of the sample would recommend their financial institution to a friend or colleague, a decline from the 59% registered in 2007.

Totals peaked in the Philippines on 72%, a five point lift on 2007, while banks in Thailand accrued an extra 12 points in this period, hitting 71%. India posted 71%, but this marked a slide from 91%.

Vietnam logged the largest decrease, down by 40 points to 43% overall. South Korea and Taiwan both saw returns drop by 14 points to 49% and 32% respectively, while China lost ten points, on 47%.

However, Japan actually yielded the lowest rating on this measure, with 13%, a loss of 12 points when compared with 2007.

In developed Asia, weekly customer usage levels for branches had tumbled by 29% since 2007, coming in at 26% in emerging Asia. These amounts also fell by 25% and 50% in turn for telephone banking.

By contrast, the web enjoyed a 22% leap in the former group of nations and 33% in the latter. Mobile banking delivered a 129% improvement on the same metric in developed Asia, standing at 50% in emerging Asia.

Shoppers also now employ as many as five channels to research new products, and 1.8 channels for servicing their existing products. In all, 83% of consumers used multiple channels between the "pre-subscriptions" and "post-subscription" stages, McKinsey added.

Finally, almost 85% of participants in emerging Asia and 63% in developed Asia thought it was "important to deal with a local bank", growing from 70% and 50% respectively in 2007.

Data sourced from McKinsey; additional content by Warc staff