UOB’s flagship ASEAN Consumer Sentiment Study (ACSS) 2023 has found that while many Malaysian consumers are planning to maintain or decrease their expenses due to concerns about rising inflation, they remain positive about the economic outlook and are focused on securing their long-term financial health through savings, investments, and insurance.
With this optimism, about 30 per cent of Malaysian consumers plan to increase their allocation for savings, investment and insurance. While spending on insurance tops Baby Boomers¹’ list, Gen Z and Y are more focused on increasing their savings. Gen X, on the other hand, prioritises their investments.
Mr Ronnie Lim, Managing Director and Country Head of Personal Financial Services, UOB Malaysia, said, “We are encouraged to see more Malaysians investing in their financial future, and UOB will continue to support their financial aspirations through our wide range of products and services. With the valuable insights from ACSS, we can better understand consumer behaviours to sharpen our focus and offer more personalised banking solutions catering to their unique needs and preferences.”
In its fourth year, ACSS is UOB’s regional flagship study analysing consumer trends and sentiments in Singapore, Malaysia, Thailand, Indonesia and Vietnam. The study was conducted from 1 to 26 June 2023 and surveyed 3,400 respondents online across the five countries, including 600 respondents in Malaysia. This is also the first time UOB partnered with global management consulting firm Boston Consulting Group on the study.
Daily concerns and spending habits
Similar to the region, three out of four Malaysian consumers surveyed are increasingly more concerned about their finances, specifically due to rising inflation, increased household expenses, and a decline in savings/wealth holdings. 37 per cent surveyed indicated they had increased spending on essentials such as groceries, with another 35 per cent had spent more on utilities. Consequentially, Malaysian consumers are most worried about having the ability to set aside money for saving (34 per cent), ability to afford essential items (30 per cent), and ability to maintain current lifestyles (26 per cent). Separately, on discretionary spending, consumers are cutting back spending on jewellery (36 per cent), vacation (35 per cent) and dining out (34 per cent).
Strong preference to use digital channels for banking and rewards
Malaysian consumers have a strong preference to adopt digital banking channels. 54 per cent of Malaysians consider mobile banking app as the most trusted banking channel, followed by internet banking through web browser (43 per cent). This correlates to the increase in usage of mobile banking apps by 44 per cent and internet banking by 34 per cent. One in three Malaysians surveyed prefer to apply for simple products (38 per cent), such as purchasing insurance (32 per cent) and investment products (36 per cent) online. On the other hand, most still prefer to use offline channels for more complex transactions, including bank loans or refinancing of loans (37 per cent), conduct high value transactions (38 per cent), and open new bank accounts (43 per cent). This reconciles with UOB’s omni-channel approach² where the Bank offers a seamless online-to-offline engagement model with its customers.
Additionally, 56 per cent of Malaysian consumers are researching more for offers and rewards online. To cater for this trend, UOB TMRW, the Bank’s all-in-one banking app, is built around the needs of individual consumers to serve their banking, financial and lifestyle needs. The app serves real-time personalised insights to customers such as a wide range of exclusive offers, deal recommendations and promotions from the UOB Rewards+ programme based on their spending patterns and travel locations. Customers can also conveniently browse local and regional deals, redeem rewards, and pay with points through the UOB TMRW app.
More consumers embracing sustainability
More Malaysian consumers are increasingly adopting sustainable practices by reusing bags (39 per cent), reducing water usage (32 per cent), recycling waste (32 per cent), and using energy efficient lightings (29 per cent). Two in three Malaysians will choose to buy local produce or brands that support local communities, support brands with sustainable practices and prefer green-certified companies. Generally, three in four consumers are likely to spend more on sustainable products and services related to their daily needs, with the Baby Boomers more likely to do so.
Following the trend in ASEAN, Malaysian consumers have a strong interest in sustainable investing. 29 per cent of consumers have already included sustainable investments in their wealth building portfolio, and another 58 per cent are interested to explore sustainable investments.
¹ Baby Boomers are those between 57-65 years old; Gen X are aged between 41-56 years old; Gen Y also known as Millennial are those 25-40 years old; and Gen Z refers to anyone between 18-24 years old
² Omni-channel customers are customers who use a combination of physical and digital channels, including online banking and mobile banking apps. Traditional customers are customers who use only physical channels such as branches and call centres.
