FICO Insights: Nearly 3 in 4 Thais Experienced a Drop in Income Due to Pandemic; Many Will Switch Banks in 2022 to Chase Better Offers
Intent to switch in 2022 notably higher than last year, especially for the mass affluent
- 70 percent (nearly 3 in 4) of Thailand’s retail banking consumers experienced a negative impact on their income due to the pandemic
Amidst an uncertain financial climate, the majority of banking consumers in
Thailandwill focus on savings (73 percent) and investment (66 percent) products
- 1 in 5 affluent Thai banking customers will consider switching banks in search of the most competitive banking deals
RFI Global’s 2022 Post-Pandemic Consumer Banking Expectations Report, prepared for FICO, confirmed that the pandemic has aggravated financial hardship for retail banking consumers in
Disruptive impacts from the pandemic differed across the region.
While a considerable 23-30 percent of
The report uncovered that more than 1 out of 4 consumers across the APAC region (27 percent) have deferred loan repayments, with consumers in some countries more likely to do so than others. While nearly half of retail banking customers in
Despite the uncertain financial climate, the majority of Thailand’s retail banking customers plan to maintain or boost their investments (66 percent). Most are looking to maintain or increase savings (73 percent), and many will consider changing banking providers this year.
Increase in customers’ intention to switch banking providers
Surprisingly, while the report indicates that most customers were highly satisfied with their main banking providers, up to 20 percent of APAC banking customers who responded said they plan to change banks in 2022. In contrast, only 10 percent said they changed banks in 2021.
This increased propensity to switch lenders is highest among the mass affluent (defined as the high end of the mass market or those with at least
Top reasons cited by Thai respondents include a change in personal circumstances (28 percent), a wish to consolidate all accounts with another institution (22 percent), a desire for access to better investment and wealth management products and services (20 percent) and incentive from another institution (20 percent).
Financial impacts felt by even the wealthiest of Thais
Amongst mass affluent banking customers in
This disruption to income has left 37 percent of affluent Thais saying they intend to reduce spending, just as half of Thailand’s retail banking customers plan to do.
Across APAC, the mass affluent are more likely to step up their borrowing compared to the wider market (16 percent vs 8 percent). In
The report further revealed that a significant 78 percent of Thailand’s mass affluent are opting to maintain or boost their investment levels with banks, which is higher than the country’s overall retail banking market (66 percent).
Impacts of the Pandemic on banking intentions
Consumers are changing their banking behaviors, in response to the financial impact of the pandemic.
Just about 3 in 4 of Thailand’s retail banking customers will either increase or maintain their savings (73 percent). Across the region, the sentiment to maintain or increase savings was highest in
Despite a dip in borrowing plans year over year, the level of borrowing for APAC retail banking customers still remains higher than pre-pandemic times as consumers deal with the lasting effects of the disruption.
“The pandemic has clearly exacerbated financial hardship for customers regardless of income class,” said
Gravitating towards Digital
Close to half of Thailand’s respondents (44 percent) still consider the proximity of branches and ATMs as a top determinant for a main banking provider; however, the report highlighted the importance of providing digital services. As many as 72 percent of APAC retail banking customers chose a fintech product over the option to use their banks’ main services. This was highest in
Comparing 2021 to 2019, APAC consumers are increasingly gravitating towards digital channels at every stage of their application journey: initial enquiries and research (up 14 percent), follow-up enquiries (up 15 percent), and banking applications (up 15 percent).
How Banks can Ensure the Customer is at the Center of Actions and Decisions
- Transform operations and data silos through the use of sophisticated analytics technology and centralized management platforms.
- Make data-driven decisions by predicting, analyzing and optimizing customer interactions in real time for an event-based, profile-driven approach to relationship management.
- Develop precise insights into optimal interactions and offers that would work best for customers
- Create a digital twin (a type of virtual model used for simulation purposes) to leverage this continuous learning and test out radical new approaches and strategies in a low-cost, low-risk environment.
- Deliver hyper-personalized offers and customer actions in a scalable way
“Banks must understand their customers’ needs on a deeper and more granular level, or risk losing them to competitors and alternative providers,” said Sharma. “Maintaining customer satisfaction alone will no longer suffice; customer experiences must be radically enhanced. Customer-centricity will be key to consistently delivering hyper-personalized experiences and retaining customers.”
This survey was conducted in 2021 by an independent research company adhering to research industry standards. 1012 adults in
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