FICO Survey: 1 in 3 Malaysians Reject Bank, Credit Card Applications Over Complex ID Checks

Rhea-AI Summary

FICO's latest consumer fraud survey reveals that Malaysians have low tolerance for inefficient digital experiences when opening financial accounts. 64% expect to answer 10 questions or less during a personal bank account application, with 33% abandoning if asked more than five questions. One in four Malaysians will give up after 10 minutes.

Despite increased identity checks due to fraud concerns, 30% of bank customers have reduced or stopped using existing accounts due to cumbersome verification processes. Consumers show varying patience levels for different account types, with 41% abandoning savings account applications and 39% abandoning personal bank account applications due to complex checks.

While digital applications offer convenience, 77% of Malaysians believe in-branch applications provide better security. The challenge for banks is to balance security and convenience, leveraging technologies like improved identity verification and open banking to streamline processes without compromising safety.

In a digital-first world, identity verification must not hinder new business

KUALA LUMPUR, Malaysia--(BUSINESS WIRE)-- FICO (NYSE: FICO):

2 in 5 Malaysians have abandoned opening a personal bank account after 10 minutes. (Graphic: FICO)

Highlights

• Good fraud protection is the top priority for Malaysians, followed by ease of use and then value
• Seven in ten consumers expect to answer 10 questions or less or they will abandon a savings account application
• Identity checks are on the rise but three in ten Malaysians will stop or reduce the use of existing accounts if the identity verification experience is poor

Global analytics software leader FICO today unveiled its latest global consumer fraud research, highlighting that consumers in Malaysia have a low tolerance for inefficient digital experiences when opening an account via mobile app or website. According to the study, 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.

More information: https://www.fico.com/en/latest-thinking/ebook/consumer-survey-2023-digital-banking-customer-preferences-and-fraud-controls

“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.”

Friction Frustration Exceeds Fraud Worries

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%).

This 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 ten consumers (7%) has 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.

Mortgages and Loans Application Process More Scrutiny

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 ten Malaysian consumers (11%) feels 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,” added 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.”

Appreciation for Digital Application Advantages

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 approximately 12,000 other consumers in Canada, U.S., Brazil, Colombia, Mexico, The Philippines, Indonesia, India, Singapore, Thailand, U.K. and Spain.

About FICO

FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 4 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and has been made available in over 40 other countries, improving risk management, credit access and transparency. Learn more at www.fico.com

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View source version on businesswire.com: https://www.businesswire.com/news/home/20240717904277/en/

Lizzy Li

RICE for FICO

+65 9034 7768

lizzy.li@ricecomms.com

Saxon Shirley

FICO

+65 9171 0965

saxonshirley@fico.com

Source: FICO

FAQ

What percentage of Malaysians abandon bank account applications due to complex ID checks?

According to the FICO survey, 41% of Malaysians abandon savings account applications and 39% abandon personal bank account applications due to complex or time-consuming identity checks.

How many questions are Malaysians willing to answer during a bank account application?

The survey shows that 64% of Malaysians expect to answer 10 questions or less during a personal bank account application, with 33% abandoning if asked more than five questions.

What is the main advantage of digital account opening for Malaysians?

The top advantage of digital account opening for Malaysians is the ability to do it at any time, with 69% citing this benefit for app-based applications and 71% for website-based applications.

How has increased identity checks affected Malaysian bank customers' behavior?

The FICO survey reveals that 30% of Malaysian bank customers have either stopped or reduced their use of existing personal bank accounts and credit cards due to cumbersome and time-consuming identity verification processes.

What percentage of Malaysians believe in-branch applications offer better security?

According to the FICO survey, 77% of Malaysians believe in-branch applications offer better security compared to digital account applications.