KUALA LUMPUR: Besides economic challenges, banks in Malaysia are facing another big hurdle - the ineffectiveness to fully engage with their customers, hence running the risk of losing revenue and market share. 

According to Gallup Inc in its 2016 Malaysia Retail Banking Customer Engagement Report, more than half of Malaysian banking consumers are indifferent toward their primary banks. 

“ A staggering 60% of Malaysian banking consumers are indifferent to or uninterested in their primary banks, apart from participating in necessary and common banking transactions.Only 28% of consumers are fully engaged and had positive feelings about their primary banks. 

“In addition, 40% do not think of or view their primary banks as better than any other banks, which points to an absence of loyalty. Because of this, Malaysian banks may find themselves facing challenging times should they remain complacent with their present customer engagement strategies,’’ the report noted. 

The report also found nearly seven in 10, or 64%, of today’s Malaysian millennials aged 25 to 29 are indifferent towards their primary banks. 

On average, these millennials use only two banking channels, allowing banks a small window of opportunity during which to engage them and cross-sell other products. 

This, it added was particularly alarming considering that this large group of uninterested millennials presents the biggest threat to the future of banks in Malaysia. 

According to Gallup, there are three distinct customer categories of which banks should be aware: fully engaged customers, indifferent customers and actively disengaged customers. 

Fully engaged customers are the most valuable to a company because they carry a strong positive feeling, purchase more products, give repeat business, are loyal and often willingly act as the company’s brand ambassadors. 

Indifferent customers do not have a strong feeling or care much about the company at all, and they may switch to another bank if enticed to do so. They also have not experienced sufficient differentiated services from their primary banks to develop a strong sense of loyalty. 

Actively disengaged customers have negative feelings about a company and will not refer the primary bank to family and friends, but may still use it to save cost, time and energy, perhaps because they simply feel that there are no better options.  

Understanding the behaviours, attitudes and preferences of these customer groups is imperative, as fully engaged customers result in about 37% more annual revenue to their primary banks, the report said.

The amount of Malaysian banking customers whom Gallup found to be indifferent to their banks indicates that banks in Malaysia have not yet put forth sufficient effort in building emotional connections with their customers on a level that is meaningful enough to garner loyalty and recurring business.

As a result, they are less-likely to cross-purchase from a variety of products and services that the bank offers today, from insurance to loan and investment products, or even make word-of-mouth recommendations. 

Gallup senior practice expert Vibhas Ratanjee added: “Customer engagement and loyalty go a long way toward a bank’s business growth, as Gallup’s research found that 76% of fully engaged Malaysian customers use more products from their banks and act as advocate for the bank to their family and friends. 

“However, this is not a doom and gloom scenario, as there are opportunities in the midst of these challenges. To win over indifferent customers, banks need to consistently deliver solutions, not merely perform transactions for their customers. 

“They need to be aware that customers want a relationship, not a product, and deliver a differentiated customer experience that sets them apart from their competitors. If a bank is able to grasp all of these insights and effectively integrate them into its operational strategy, it can certainly win over a huge portion of the customer base.”