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Mobile Ecology: Are Malaysian Consumers Ready for the New Frontier of Mobile Banking & Payment?
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Mobile Ecology: Are Malaysian Consumers Ready for the New Frontier of Mobile Banking & Payment?

The struggle is real. In an increasingly connected world where news, retail shopping, banking and entertainment are all available 24/7 on a variety of mobile devices, fear of missing out (FOMO) is a legitimate phenomenon. According to the new Nielsen Mobile Shopping, Banking and Payment Report, 55% of Malaysian consumers say they feel anxious when their mobile devices are not close at hand. At least three in five say they can’t imagine life without mobile devices (58%) and about three quarters say their mobile device makes their life better (76%). Nearly two thirds of Malaysian respondents also agree that face-to-face interactions are being replaced with electronic ones (65%), but that might not be a problem as more than half (52%) say they prefer texting to talking anyway.

While mobile devices has transformed the way we communicate and stay connected with each other, it is also revolutionizing the world of retail and banking. Growth in access to cashless payments is estimated to lead to US$10 trillion in additional consumer spending over the next decade, according to The Demand Institute, jointly operated by Nielsen and The Conference Board

“There is no doubt that mobile devices and smartphones are changing the way we operate on a daily basis and one of the key changes in progress is how we pay for items, not just online but in our daily face-to-face transaction.” said Richard Hall, Country Manager of Nielsen Malaysia.

MOBILE DEVICES – MALAYSIAN CONSUMERS’ NEW SHOPPING BUDDY

To many Malaysians, their mobile devices are indispensable shopping buddies used to look up product information (64%), compare prices (60%), look for coupons or deals (51%), make better shopping decisions (50%) and to make their shopping trips quicker or more efficient (41%).

About one third of Malaysians say they purchased a product or service on their mobile device in the past six months (34%) and they have also used a mobile app to make a purchase in the same period (31%). The global average of consumers purchasing a product or service on their mobile device in the last six months is 38% while 34% have done so via a mobile app.

Besides using their mobile devices to buy the usual movie tickets, flight tickets or hotel stays (35%), a fraction of Malaysian consumers are also using their mobile devices as part of their fintech (financial technology) experience. Nearly one third of respondents say that they have used a banking/insurance app (32%) in the past six months and that they have also bought or sold stocks/funds online (11%) and purchased an insurance product online (5%) in the last half year.

“Mobile devices such as smartphones have now become an integral part of our lives and using them as an omni channel, reference point has become the norm. Checking on products whilst in-store is becoming the standard and brands and retailers still need to embrace this phenomena but in the meantime, the way we pay for products and services is going through a step change that consumers will learn to love.” notes Hall.

Whilst the mobile device is seen as an indispensable shopping companion among Malaysian consumers, other top uses of the mobile device include social media (78%), accessing emails (73%), viewing YouTube (63%), checking a bank account balance or a recent transaction (53%) and playing free games (52%).

MOBILE PAYMENT – ARE MALAYSIANS EMBRACING THE VIRTUAL WALLET?

When it comes to making payment using a connected mobile devices, about half of the respondents are highly or somewhat likely to use mobile payments in bars, restaurants and retail stores (52%). Similarly to mobile banking, about three quarters of Malaysians are equally concerned about security when it comes to mobile payment (72%).

Nevertheless, about two thirds are willing to make or increase the number of mobile payment if security features are enhanced (68%). Other factors which would encourage Malaysian consumers to increase the number of mobile payment via their connected mobile device include availability of incentives, loyalty or rewards specifically for mobile payment users (55%) and speedier check-out compared to traditional payment methods (45%).

THE FUTURE OF MOBILE BANKING

The majority of Malaysians (83%) are comfortable about using their mobile device to check their bank account balance or recent transaction in the next six months. Some of their mobile banking activities include transferring money between bank accounts (75%), paying bills online (77%), receiving (74%) or transferring (71%) money from/to another person.

Although nearly all Malaysians are open to the idea of mobile banking, at least three quarters still have reservations about conducting certain banking (74%) activities via their mobile devices in the next six months as security remains a key concern. Other key reasons which inhibits Malaysians from conducting certain banking activities via their mobile devices in the next six months includes a small device screen (29%), preference to visit physical bank branch for banking needs (29%) and lack of access to a stable Internet connection (15%).

The survey also revealed that on average less than a third of Southeast Asian consumers are highly likely to use a mobile-only bank (no physical locations and all interactions are serviced through a mobile app). Only one in five Malaysian consumers is highly likely to use such as a service (21%) if made available. However, at least two in five Malaysians are highly likely to use a mobile-only bank if the service provider offered discounts on lifestyles activities, such as booking entertainment tickets or purchasing movie tickets (44%), higher deposit interest rates (43%) and lower or no fees on purchase of investment products (42%).

In general, Malaysian consumers would like to see cheque scanning and deposit technology (51%), ability to communicate with the bank via social media (39%) as well as facial recognition (38%) and voice recognition (38%) features be developed as part of the mobile banking apps of the future.

“Having gone through a revolution in terms of how products and services are researched, referenced and recommended using the mobile phone with social media and peer reviews during purchase decisions, we can now see that consumers need to move to the next stage of the development of online transactions in terms of how they pay for goods and services. Malaysians have an inherit distrust of online payment, so moving to cashless payment through mobile phones will take a little longer than in other countries but it will happen as the advantages and convenience will overcome these fears.” observes Hall.

For more details and insights, download the Nielsen’s Global Mobile Money Report

ABOUT THE NIELSEN GLOBAL SURVEY

The Nielsen Mobile Shopping, Banking and Payment Survey was conducted on 1-23 March 2016, and polled more than 30,000 online respondents in 63 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America to understand how mobile devices are influencing three distinct yet interconnected activities: shopping, banking and payments. In Malaysia, the sample size is 485. Nielsen examined the kinds of mobile shopping, banking and payment activities respondents are currently engaged in and their likelihood to participate in the future. We also examined the barriers to adoption for mobile banking and payments, as well as the incentives that would encourage wider use. The sample includes internet users who agreed to participate in this survey and has quotas based on age and sex for each country. It is weighted to be representative of internet consumers by country. Because the sample is based on those who agreed to participate, no estimates of theoretical sampling error can be calculated. However, a probability sample of equivalent size would have a margin of error of ±0.6% at the global level. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% internet penetration or an online population of 10 million for survey inclusion. The findings in this survey are based on respondents with online access in 63 countries (unless otherwise noted). While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of only existing internet users, not total populations. In addition, survey responses are based on claimed behavior, rather than actual metered data. Cultural differences in reporting sentiment are likely factors in the outlook across countries. The reported results do not attempt to control or correct for these differences; therefore, caution should be exercised when comparing across countries and regions, particularly across regional boundaries