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Frost survey finds slightly improved customer experience in Malaysia's banking, insurance and telco sectors

AvantiKumar | June 7, 2016
The choice of product or service offered is the single most important factor for Malaysian consumers using bank and telecoms services, said Frost & Sullivan's Nitin Bhat.

Nitin Bhat - Frost 

Photo - Nitin Bhat, Partner and Head of Consulting, Asia Pacific, Frost & Sullivan.


According to analyst firm Frost & Sullivan's Customer Experience Index 2015, customer experience has seen some overall improvement in Malaysia's banking, telecommunications and insurance sectors.

Unveiling the top level numbers from the survey, Frost & Sullivan's Asia Pacific partner and head of consulting, Nitin Bhat said the customer experience index (CEI) of the banking sector has increased 0.48 points to 3.69 points in 2015 while CEI in the telecoms sector has increased 0.34 points to 3.61 points in 2015. The health insurance CEI has added 0.6 points to 3.86 points while life insurance CEI has increased 0.39 points to 3.76 points in 2015.

The choice of product or service offered was the single most important factor in determining the choice of primary bank and telecoms services for Malaysian consumers while rates and fees influence the choice for health and life insurance, said Bhat.

He added that the survey focused on key sectors - banking, telecoms and insurance due to the high churn rate in these sectors. "We hope that this research will help companies to fine tune their customer experience strategies and allow them to better retain their customers."

"[However], companies need to design their customer experience approach by looking at different stages of customers purchase and touch points," Bhat said, pointing out that the Customer Experience survey showed that Malaysian consumers were the least likely to promote their primary banks and telecoms service providers to others as the average Net Promoter Score (NPS) for banks are at negative 8 percent while telecoms companies are at negative 17 percent.  

Continuous improvement needed

Bhat said that this showed banks and telecoms service providers in Malaysia must "continuously improve on their customer experience delivery to move out from the negative territory."

He said that this also applied to the health and life insurance sector where Malaysian consumers showed "a lower enthusiasm in promoting their service provider to friends and families, with the industry average NPS at negative 6 percent."  

Some categories have observed more than one recipient, while a few have no recipients, which was due to the better or lower than threshold rating by the consumer of different industry players, said Bhat.

Speaking of the banking sector, he said that branch banking continued to be the most preferred channel for the purchase and post-purchase stages of the customer journey with banks in Malaysia except for the pre-purchase stage of which online channel was rated highly for its ability to gather information.

Bhat added that mobile application is under-utilised despite the growth of smartphones or tablets in the Malaysian market.

"In 2015, the banking sector has shifted into an online-driven industry where consumers are more motivated to communicate through their primary bank's online platform as compared to 2014 where ATM is the most preferred channel among banking consumers. This may be due to the improvement made on the online channel, such as the accessibility, user-friendliness and features of the online channel," he said.

Bhat added that banking consumers in Malaysia have rated call centres "as the least preferred channel to interact through any form of transactions. Online, ATM and Branch remain as the most preferred channels for banking transaction in Malaysia. Nevertheless, call centre showed a slight increase in terms of its customer experience as compared to last year."

Struggling with competition

Turning to the telecoms sector, he said that "choice of products or services is the vital factor in choosing primary telecommunication service provider for Malaysian consumers."

Telecoms service providers in Malaysia continue to struggle to cope with competition, and they must continue to innovate on more personalised products or services that can suit each and every market segment accordingly, said Bhat.

"Telecoms providers that cannot cope with the demand of the market will eventually lose their subscribers as competition is stiff," he said, adding that online was the highest rated channel for customer experience, due to its high degree of availability, allowing customers to perform the transactions outside of office hours, followed by In-Store and Mobile channel.

In 2015, the insurance agents channel was the most preferred channel in all three stages of the customer journey - pre-purchase, purchase and post-purchase stages - with health and insurance companies in Malaysia, Bhat added.

"Mobile channel is severely under-utilised in all three stages of the customer journey due to the accessibility and convenience of interacting with insurance agent in terms of making enquiries, seeking explanation and problem solving," he said.

The Frost & Sullivan Customer Experience program focused on measuring the experiences of consumers across all key touch points such as in-store/retail, products & services and in the contact centres and across all stages of interaction with the brand. The two-month online survey was conducted across more than 1,900 respondents randomly selected from consumer online panels to answer questions on customer experience attributes for specific industries.

(Below) Recipients for the Frost & Sullivan 2016 Malaysia Customer Experience awards

Frost Malaysia Consumer Experience Index


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