Financial Services Reputation Index for Asia: Has the sector become complacent?
Following the successful launch of MHP’s Financial Services Reputation Index for the UK, we are delighted to launch the Index in Asia, which includes findings for Hong Kong, Singapore, Malaysia, China and India.
The global financial crisis of 2008 ushered in sweeping reform of the financial sector globally. While Asia’s financial markets bounced back relatively quickly, spurred in part by swift actions by regulators, strong macroeconomic fundamentals and favourable demographic drivers, it left a lasting impact on the financial services landscape.
With less fallout to deal with, financial services companies in Asia focused on forging strong pan-regional networks and investing in innovation. What they shared with global peers, was a pressing need to reassess their purpose, relationship with customers, and role in the community. In the years following, structural and cultural changes were enacted, and, crucially, reputation was catapulted to the top of the CEO agenda.
A decade on from the crisis, technology is transforming the lives of people in Asia at an unparalleled pace. Financial services businesses across the region are grappling with how to contend with disruptive technologies and how best to embrace digital solutions to transform customers’ experiences. Overall, the findings in this report paint an overwhelmingly positive picture. In India and Singapore more than 90% of consumers have a positive perception of the industry, and in China, Malaysia and Hong Kong these figures are just above 80%. In Singapore and Malaysia, banks and payment systems providers lead the way in the positivity stakes.
While it is almost inevitable that there will be other financial crises in the future, we can certainly learn from past mistakes and it is important the sector doesn't become complacent in its approach to reputation
By comparison, the same study in the United Kingdom in February 2018 found only half (53%) of consumers there perceive the industry positively. Given the recent challenges with Brexit and the more severe impact of the global financial crisis on the UK, this seems unsurprising, but it should also serve as a warning. While it is almost inevitable that there will be other financial crises in the future, we can certainly learn from past mistakes and it is important the sector doesn’t become complacent in its approach to reputation.
A fascinating thread that emerges from the report is the divide across the region in perceptions of digital vs traditional financial services providers. Almost one in three of those polled in China and India, and almost one in two in Malaysia see digital financial services companies as more trustworthy than traditional peers, while in Hong Kong and Singapore, almost one quarter say they are less trustworthy. Not unexpectedly in light of high-profile data breaches in the region and globally, data security is the top concern for respondents in every market. From speaking to CEOs and CCOs in the region for this report, digitalisation affords huge opportunities to increase revenue streams, drive efficiencies, and deepen customer relationships, but it is also increasing reputation risk.
I hope our inaugural Financial Services Reputation Index for Asia will provide a chance to reflect on how far the sector has come in the past 10 years and provide useful insights for our partners in the sector. As the intense spotlight on the social media giants highlights, people want more corporate responsibility and accountability. More than ever, the industry needs to focus on articulating its role in society and how it makes the wheels of life and trade turn.