Malaysian consumers not happy with their telcos and banks: Frost study
By Lum Ka Kay June 6, 2016
- Less likely to promote their service providers in these two sectors
- In terms of customer experience, Celcom the best, Maxis the worst
MALAYSIAN consumers are not likely to promote their primary banks and telco service providers to others, compared with their insurance peers, but all three sectors need to improve on the customer experience front, according to a Frost & Sullivan study.
The research firm looked at the Net Promoter Score (NPS) for companies in the banking, telco, and health and life insurance sectors. NPS is calculated as the percentage of promoters (customers likely to promote a brand) deducted from the percentage of detractors.
Telcos fared the worst, with an average NPS score of -17%, while banks and insurance providers had average scores of -8% and -6%, respectively. Yes, all three sectors are in the negative zone.
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In the banking industry, CIMB Bank Bhd led with 9% while RHB Bank Bhd had the lowest NPS score of -21%.
In the telco space, U Mobile Sdn Bhd scored the highest at -1%, with Maxis Bhd the worst at -29%. In between were Telekom Malaysia Bhd (-7%) at No 2, followed by Digi.com Bhd (-18%) and Celcom Axiata Bhd (-19%).
“However, it should be noted that U Mobile has a smaller subscriber base compared with the other telco brands like Maxis, Celcom and Digi,” said Frost & Sullivan partner and head of consulting for Asia Pacific Nitin Bhat.
Meanwhile, for the 2015 Frost & Sullivan Malaysia Customer Experience study, the firm conducted an online survey from October to November 2015, involving 1,900 respondents randomly selected from consumer online panels, to measure customer experience in the three sectors.
In the telco space, Celcom Axiata had the highest overall customer experience index (CEI) with a score of 3.83, compared with 3.25 in 2014. The industry average for 2015 was 3.72.
Celcom was closely followed by Telekom Malaysia with a score of 3.79, Digi (3.72), U Mobile (3.64), with Maxis again lagging with a score of 3.61.
In the banking sector, CIMB led with a score of 3.82, followed by Hong Leong Bank (3.74), Maybank (3.68), Public Bank (3.65) and RHB Bank (3.55). The industry average was 3.69.
The choice of product or service offered is the single most important factor in determining the choice of primary bank and telco services for Malaysian consumers, Nitin told a media briefing in Kuala Lumpur on June 2.
In the insurance sector, rates and fees influence customer choice.
For the banking sector, branch banking continues to be the most preferred channel for the purchase and post-purchase stages of the customer journey, according to the survey.
Mobile being under-utilised
Telcos, banks and insurance providers need to design their customer experience approach by looking at different stages of customers’ purchase and touch points, according to Nitin (pic).
For instance, despite the heavy adoption of smartphones and tablets in the Malaysia, the mobile app is still being under-utilised, he said.
“Online, the ATM (automated teller machine), and the branch remain the most preferred channels for banking transactions in Malaysia.
“This may be due to the improvements made on the online channel, such as accessibility, user-friendliness and features,” he added.
Nitin also noted that consumers have rated call centres as the least preferred channel of interaction with their banks.
In the telco sector, operators are struggling to cope with competition and will have to innovate on more personalised products or services to suit various market segments, he suggested.
“Telco providers that fail to cope with the demands of the market will eventually lose their subscribers as competition is really stiff,” he said.
Based on the Frost survey, the top three reasons consumers for switching their current mobile operators are: Better rates from another (51%); better choice of products and services (43%); and poor network data connections (42%).
The insurance industry is still face-to-face: Insurance agents are still the most preferred channel in all three stages of a customer journey – pre-purchase, purchase, and post-purchase.
“Mobile is severely under-utilised in all three stages of the customer journey due to the accessibility and convenience of interacting with insurance agents in terms of making enquiries, seeking explanations, and solving problems,” said Nitin.
When it comes to banking, approximately 33% of respondents who discontinued their primary bank’s services indicated branch proximity as their top reason.
The second most popular reason was customer experience issues (31%), followed by better choice and products/ services from another bank (30%).
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