As part of the Nielsen Global Survey of Investment Attitudes, Nielsen researchers looked at online consumers in Malaysia. It seems 47% repay all credit cards in full each month and 15% pay more than the minimum. We reprint in full the report on Malaysia released on 11th July 2012.
The full survey was conducted in February 2012 and polled more than 28,000 online consumers in 56 countries throughout Asia Pacific, Europe, Latin America, the Middle East, Africa and North America.
Nielsen Global Survey. Malaysia findings:
Two in five (39%) Malaysian online consumers indicate that they use credit cards as a common payment method for dining, shopping and entertainment activities while 92 percent and 35 percent use cash and debit cards respectively according to a new study from Nielsen, a leading global provider of information and insights into what consumers watch and buy. Just under half (47%) of Malaysian credit card users claim that they repay all of their credit cards in full each month, the second lowest repay rate (ahead of Vietnam) among developing markets surveyed (see Chart 1) while 15 percent repay more than the minimum requirement, the highest percentage among 14 markets surveyed in the Asia-Pacific region. Close to one-fifth (18%) of Malaysians repay only the minimum payment required.
The Nielsen Global Survey of Investment Attitudes surveyed more than 28,000 Internet respondents in 56 countries and shows that almost two out of five Malaysian consumers are investing their money via various channels. Of those investing, two-thirds (67%) prefer mutual fund/unit trusts, about half (49%) prefer stocks, 27 percent invest in gold, silver and other precious metals, onefourth in structured investment products, 15 percent in foreign currencies, 10 percent in bonds and 8 percent in derivatives.
Malaysians are generally on the list of the top ten savers in the world according to the Nielsen Global Survey, however, 45 percent of the online respondents are also bearing loans and seeking protection via insurances while 39 percent of them are seeing to the needs of investing for capital appreciation.
“Knowing consumers’ attitudes towards wealth management while creating relevant opportunities to engage with consumers and manage their needs is still a challenging task for financial planners and investment institutions, especially when four in ten consumers do not trust others when making financial decisions,” said Luca Griseri, head of Customised Research, Nielsen Malaysia. “This only emphasizes the need to really understand consumers’ attitudes and needs, not just towards risk, but towards financial transactions in general, and highlights the positive impact that a segmentationbased approach to marketing can have in helping financial institutions understand their customers.”
Professional financial advice is not a popular sought after channel
The survey reveals that less than one-fifth (19%) of respondents rely on financial planners or advisors when it comes to decision making on personal finance or wealth matters. Just one in ten (11%) rely on investment tips from commentators, experts or spokesperson broadcast on TV or radio or via the Internet. Seeking advice from friends, relatives and colleague is preferred by 21 percent of respondents while six percent make investment decisions on impulse (see Chart 2).
Ten percent are high risk takers
When gauging the perceptions on risk taking, 24 percent of investing consumers say that they are concerned about any volatility. One-fourth of investors consider themselves conservative investors, but can accept some minor fluctuations in their portfolio value. Moderate investors who can accept potential for higher returns make up another 21 percent, followed by those who aim for long-term capital appreciation (20%). Ten percent indicate that they are higher risk takers who seek for highest possible returns (see Chart 3).
“With the global economic circumstances remaining uncertain, risk taking is another important consideration in closing the gap with personal investors,” said Griseri. “Overall, there emerges a sense that Malaysian consumers tend to err on the side of caution – which is perhaps not surprising in view of the negative economic outlook worldwide.”
Investment transaction channels skew towards self-reliance
Nielsen’s survey shows that about four out of five (79%) online consumers who invest their money conduct transactions at the bank (physical branch) while 59 percent use online banking for their investment transactions. Twenty percent use mobile phones for investment transactions, slightly higher than those who engage financial planners or advisers (19%) to conduct investment transactions. Less than one in five (18%) use an online investment brokerage or investment service provider whilst 17 percent indicate that they are using a land line phone to perform the task.
“It is not surprising to see that investment transactions are skewed towards self-reliance given that close to half of the investors in the country rely on themselves for personal financial or wealth matters. Nevertheless, financial institutions can take advantage of Internet banking to close the gap between the top two transaction channels,” said Griseri. “In addition, a number of technological trends converge to make mobile banking a real opportunity in Malaysia: the country is experiencing ever-increasing Internet/broadband penetration rates as well as increasing smartphone and tablet penetration. To capitalize on this, the priority for financial institutions will be reassuring consumers about the security of mobile banking.”