PETALING JAYA: Consumers in Malaysia have a low tolerance for inefficient digital experiences when opening an account via mobile app or website, research by global analytics software leader FICO showed.

According to results of its latest global consumer fraud study released yesterday, Malaysians selecting a new financial account place a high value on both good fraud protection and ease of use.

Nearly two in three (64%) expect to answer 10 questions or less or they will abandon a personal bank account application. One in three (33%) will drop out if asked more than five questions. Regardless of the number of questions asked, one in four Malaysians will give up on a personal bank account application after 10 minutes.

“Malaysian consumers have rapidly adopted digital banking, and their expectations are evolving,” said Aashish Sharma, Apac segment leader for risk lifecycle and decision management at FICO.

“FICO’s research shows a growing demand for seamless account opening experiences. Financial institutions that can streamline their processes will be best positioned to retain customers and improve satisfaction.”

In the past year, half of Malaysians have noticed more identity checks when they log in to bank accounts (51%) or make an online purchase (49%). The increase in identity checks by Malaysian banks is a direct response to the significant issue of identity theft in the country.

Close to one in 10 consumers (7%) confirmed that their identity has been fraudulently used to open an account, while one in three (30%) suspects it has.

Despite this, frustration with identity checks can alter consumer behavior. The FICO survey revealed that

three in ten bank customers have either stopped or reduced their use of existing personal bank accounts

and credit cards, citing the cumbersome and time-consuming nature of these identity verification

processes.

A clear majority of Malaysians (70%) have noticed more identity checks in the past year when they log in to bank accounts or make an online purchase.

Malaysian consumers show varying levels of patience for different account opening processes. They are most likely to abandon savings accounts (41%) or personal bank accounts (39%) applications due to complex or time-consuming identity checks.

Close to one in three have abandoned credit card applications (31%) for the same reason, while close to one in four (24%) have been frustrated enough to abandon mortgage loan applications.

Additionally, only one in 10 Malaysian consumers (11%) feel comfortable opening a mortgage account through digital channels, while a significant 47% prefer to apply for personal loans 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 scrutiny, the survey clearly shows that expectations for ease of use remain high.

“Banks encouraging customers to use digital services for faster online loan approvals must address frustration caused by complex and lengthy identity checks,” said Sharma. “More than half of Malaysians (52%) will not complete a digital mortgage application (52%) or a personal loan application if it has more than ten questions.”

When asked about the benefits of opening an account digitally via the provider’s app, being able to do it any time (69%) was identified as the top advantage, followed by being able to open it anywhere (65%).

Similarly, Malaysians ranked being able to open an account at any time (71%) as the top advantage via the provider’s website, followed by speed (63%).

In contrast, three in four (77%) Malaysians believe in-branch applications offer better security, with less than half (44%) identifying security as a benefit of digital account applications via the provider’s app, and close to two in five (38%) via the provider’s website.

“Providing convenience and ease to consumers should not come at the cost of security and anti-fraud measures,” noted Sharma. “The challenge lies in finding the sweet spot between security and convenience, especially for high value-products and interactions prone to risk. Consumers are looking for smarter onboarding processes and identity checks, not riskier processes. Banks can achieve this by leveraging technologies like improved identity verification, transaction history analysis, open banking and government databases to expedite the process without compromising security.”

The survey was conducted in November 2023 by an independent research company adhering to research industry standards. 1,001 Malaysian adults were surveyed, along with about 12,000 other consumers in Canada, the US, Brazil, Colombia, Mexico, the Philippines, Indonesia, India, Singapore, Thailand, the UK and Spain.