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.
Malaysian consumers are more optimistic about the economic situation than the region, with about two in three respondents expecting themselves to be financially better off by June next year. Although three in four respondents felt Malaysia will likely face an economic downturn within the next six to 12 months, this downcast sentiment has softened compared to last year.
With this optimism, about 30 percent of Malaysian consumers plan to increase their allocation for savings, investment and insurance. While spending on insurance tops Baby Boomers’ list, Gen Z and Y are more focused on increasing their savings. Gen X, on the other hand, prioritises their investments.
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.
Thirty seven percent surveyed indicated they had increased spending on essentials such as groceries, with another 35 percent had spent more on utilities. Consequently, Malaysian consumers are most worried about having the ability to set aside money for saving (34 percent), ability to afford essential items (30 percent), and ability to maintain current lifestyles (26 percent). Separately, on discretionary spending, consumers are cutting back spending on jewellery (36 percent), vacation (35 percent) and dining out (34 percent).
Strong preference to use digital channels for banking and rewards
Malaysian consumers have a strong preference to adopt digital banking channels. 54 percent of Malaysians consider mobile banking app as the most trusted banking channel, followed by internet banking through web browser (43 percent).
This correlates to the increase in usage of mobile banking apps by 44 percent and internet banking by 34 percent. One in three Malaysians surveyed prefer to apply for simple products (38 percent), such as purchasing insurance (32 percent) and investment products (36 percent) online.
On the other hand, most still prefer to use offline channels for more complex transactions, including bank loans or refinancing of loans (37 percent), conduct high value transactions (38 percent), and open new bank accounts (43 percent). This reconciles with UOB’s omni-channel approach where the Bank offers a seamless online-to-offline engagement model with its customers.
Additionally, 56 percent 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.
More consumers embracing sustainability
More Malaysian consumers are increasingly adopting sustainable practices by reusing bags (39 percent), reducing water usage (32 percent), recycling waste (32 percent), and using energy efficient lightings (29 percent).
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 percent of consumers have already included sustainable investments in their wealth building portfolio, and another 58 percent are interested to explore sustainable investments.