HONG KONG: Financial services brands will need to meet local needs if they are to increase customer loyalty in Asia, a poll by McKinsey has found.

The consultancy surveyed 20,000 adults across 13 markets to gauge emerging attitudes and habits.

It reported that around 70% of respondents agreed with the statement "borrowing is always risky", an amount which has leapt from 43% during 2007.

Elsewhere, the research revealed "mass affluent" customers trade with 3.3 banks, up from 2.7 over the same period, and rising to 4.7 in developed Asia, like Singapore and South Korea.

Wealthy consumers are often even less loyal, utilising five different providers, according to the study.

More broadly, recommendation levels regarding the retail banking sector are relatively low.

"While banks may not be experiencing drops in loan volumes, consumers are becoming much more cautious on what they borrow for and how much they borrow," Kenny Lam, head of McKinsey's marketing and sales practice for financial institutions in Asia, told Reuters.

Foreign banks also lagged considerably behind their domestic rivals, with 87% of Chinese customers typically doing business with a local firm, up on 75% in 2007.

Similar trends were observed in Taiwan, where scores climbed from 51% to 68%, and Hong Kong, where such figures stood at 55% and 76% respectively.

"We're witnessing a consistent theme across Asia of the desire among consumers for the localisation of banks," said Lam.

One reason for this, he added, was that global players were perceived to be a comparatively high risk proposition after the recession.

Estimates from PriceWaterhouseCoopers, the business services group, suggested international banks held a 1.8% market share in China last year, a modest lift from 1.7% on an annual basis.

Moreover, the resilience and future growth possibilities of China's biggest institutions has translated into analyst and investor confidence.

The Industrial and Commercial Bank of China, for example, is valued at $250bn, the greatest total worldwide, measured against Citigroup's stock market valuation of $117bn.

McKinsey found government backing for indigenous firms, and the perception these organisations have a better understanding of customer and market needs, also tips the balance.

Lam argued marketing strategies and messages among multinationals are now changing to reflect this, moving from being a "sales machine" to joining the "local community".

Another evolving trend is the rise of online banking, which has seen a 27% increase in usage, roughly matching the decline in branch traffic.

Mobile banking posted an equivalent improvement of 87%, showing the substantial potential of wireless devices in Asia.

Data sourced from Reuters, Wall Street Journal, The Economist; additional content by Warc staff