In a digital-first world, authentication cannot hold back new business
KUALA LUMPUR, Malaysia–(BUSINESS WIRE)–FICO (NYSE: FICO):
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Two out of five Malaysians give up on opening a personal bank account after 10 minutes. (Photo: FICO)
emphasize
- Good fraud protection is top priority for Malaysians, followed by ease of use and then value
- Seven in 10 consumers expect 10 or fewer questions answered or they will abandon their savings account application
- Identity checks are on the rise, but three in 10 Malaysians will stop or reduce use of existing accounts if identity verification experience is poor
FICO, the global leader in analytics software, today released its latest global consumer fraud study, highlighting that Malaysian consumers have a low tolerance for inefficient digital experiences when opening accounts via mobile apps or websites. According to the study, good fraud protection and ease of use are highly valued by Malaysians choosing a new financial account.
Nearly two-thirds (64%) expect to answer 10 questions or fewer or they will abandon their personal bank account application. One-third (33%) will quit if asked more than five questions.
No matter how many questions are asked, a quarter of Malaysians abandon their personal bank account application after 10 minutes.
More information: https://www.fico.com/en/latest-thinking/ebook/consumer-survey-2023-digital-banking-customer-preferences-and-fraud-controls
Malaysian consumers have rapidly adopted digital banking and their expectations are constantly changing. Aashish Sharma, Asia Pacific Head of Risk Lifecycle and Decision Management at FICO said. FICO research shows growing demand for a seamless account opening experience. Financial institutions that can streamline their processes will be best positioned to retain customers and increase satisfaction.
Friction frustration outweighs fraud concerns
Last year, half of Malaysians noticed more identity checks when logging into their bank account (51%) or making purchases online (49%).
The increase in identity checks by Malaysian banks is a direct response to the country’s serious identity theft problem. Nearly one in 10 consumers (7%) confirm that their identity has been fraudulently used to open an account, while a third (30%) suspect this is the case.
Still, the frustration of identity checks may change consumer behavior. A FICO survey shows that three in 10 bank customers have stopped or reduced their use of existing personal bank accounts and credit cards, citing these identity verification processes as cumbersome and time-consuming.
Apparently, the majority of Malaysians (70%) have noticed more identity checks when logging into their bank accounts or making purchases online over the past year.
Mortgage and loan application processes come under more scrutiny
Malaysian consumers show varying levels of patience with different account opening processes. They are most likely to abandon applications for a savings account (41%) or a personal bank account (39%) due to complex or time-consuming identity checks.
Nearly a third (31%) gave up on a credit card application for the same reason, while nearly a quarter (24%) gave up on a mortgage application out of frustration.
Furthermore, only one in 10 Malaysian consumers (11%) are willing to open a mortgage account through digital channels, while 47% prefer to apply for a personal loan in person at a branch rather than opting for online alternatives.
While some consumers are more tolerant of detailed processes for certain financial products that require thorough review, the survey clearly shows that expectations for ease of use remain high.
Banks are encouraging customers to use digital services to speed up online loan approvals and must overcome the frustrations caused by complex and lengthy identity checks. Sharma added. “More than half of Malaysians (52%) would not complete a digital mortgage application (52%) or a personal loan application if there were more than ten questions.
Appreciate the advantages of digital applications
When asked about the benefits of opening an account digitally through a provider’s app, being able to open an account at any time (69%) was cited as the biggest advantage, followed by being able to open an account anywhere (65%). Similarly, Malaysians see being able to open an account at any time (71%) as the biggest advantage of going through a provider’s website, followed by speed (63%)
In contrast, three-quarters (77%) of Malaysians believe in-branch apps offer better security, and less than half (44%) believe security is through the provider’s app Digital account application benefits, while nearly two-fifths (38%) go through the provider’s website.
Providing convenience and ease to consumers should not come at the expense of security and anti-fraud measures, Sharma pointed out. The challenge is to find the optimal balance between security and convenience, especially for high-value products and risk-prone interactions. Consumers are looking for smarter onboarding and identity checks, not riskier processes. Banks can achieve this by leveraging technologies such as improved identity verification, transaction history analysis, open banking and government databases to speed up the process without compromising security.
The survey was conducted in November 2023 by an independent research firm in accordance with research industry standards. 1,001 Malaysian adults were surveyed, along with approximately 12,000 other consumers in Canada, the United States, Brazil, Colombia, Mexico, the Philippines, Indonesia, India, Singapore, Thailand, the United Kingdom and Spain.
About FICO
FICO (NYSE: FICO) powers decisions that help people and businesses around the world thrive. Founded in 1956, the company is a pioneer in using predictive analytics and data science to improve operational decisions. FICO holds more than 200 U.S. and foreign patents on technologies that improve profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, healthcare, retail and many other industries. Using FICO solutions, businesses in more than 100 countries can take actions ranging from protecting 4 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. Used by 90% of the top U.S. lenders, the FICO ® Score is the standard measure of credit risk for U.S. consumers and is used in more than 40 other countries to improve risk management, credit access and transparency. For more information, please visit www.fico.com
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Liz Lee
FICO meters
+65 9034 7768
lizzy.li@ricecomms.com
Saxon Shirley
Fitzgerald
+65 9171 0965
saxonshirley@fico.com
Source: FICO
