Asian banks are falling short when it comes too engaging with customers and holding themselves accountable, according to a new report by Fair Finance Asia (FFA).The organization’s latest scorecard, which assessed 15 banks across Cambodia, Indonesia, Pakistan, the Philippines, and thailand, gave Asian banks an average score of just 3.5 out of 10 across four key areas.
While banks fared better in areas like financial inclusion (5.2/10) and consumer protection (5.5/10), their performance in engagement and accountability mechanisms was especially dismal, earning a meager 1.3 out of 10.
“asian consumers are increasingly expecting clarity and accountability from financial institutions,” said Bernadette victorio, programme lead at FFA. “Banks should educate and engage with consumers, empowering them to make smarter financial decisions that align with their values, and enable them to be partners in sustainability.”
The report highlighted several regional concerns. In Pakistan, Asim Jaffry, country program lead at Fair Finance Pakistan, noted that “Pakistani banks seem to prioritize profit over purpose, often promoting financial products with limited knowledge of their impacts on individuals and society.”
Meanwhile, Genalyn Aquino-Arcayera, program manager at Fair Finance Philippines, pointed out that while assessed Philippine banks scored highest in three areas, they need to improve transparency, particularly by disclosing information about financed projects.
Sarinee Achavanuntakul, head of research at Fair Finance Thailand, emphasized the need for Thai banks to strengthen policies preventing over-indebtedness and to increase accountability and transparency.
FFA, in collaboration with its national coalitions and research partner Profundo, is calling on banks to strike a balance between inclusion goals and financial literacy initiatives. The organization stresses the importance of ensuring that clients are informed about a bank’s sustainability strategies and financing practices.
Asian Banks Lag Behind in Customer engagement and Accountability,Report Finds
A new report by Fair Finance Asia (FFA) reveals that Asian banks are falling short in engaging with customers and holding themselves accountable. The report, which assessed 15 banks in cambodia, Indonesia, Pakistan, the Philippines, and Thailand, gave an average score of just 3.5 out of 10 across four key areas.
While banks performed better in areas like financial inclusion and consumer protection, their performance in engagement and accountability mechanisms was notably low, receiving a meager 1.3 out of 10.
To shed light on these findings and explore potential solutions, World Today News talked to experts from Fair Finance’s national coalitions across Asia.
The Disconnect Between Banks and Customers
Bernadette Victorio, Program Lead at FFA, emphasizes the growing demand for clarity and accountability from financial institutions:
“Asian consumers are increasingly expecting clarity and accountability from financial institutions. Banks should educate and engage with consumers, empowering them to make smarter financial decisions that align with their values, and enable them to be partners in sustainability.”.
Asim Jaffry, Country Program Lead at Fair Finance Pakistan, underscores the need for a shift in priorities within Pakistani banks:
“Pakistani banks seem to prioritize profit over purpose, often promoting financial products with limited knowledge of their impacts on individuals and society.”
Transparency and Disclosure: Areas for Improvement
The report highlighted the need for greater transparency in several areas. Genalyn Aquino-Arcayera, Program Manager at Fair Finance Philippines, notes:
“While assessed Philippine banks scored highest in three areas, they need to improve transparency, particularly by disclosing facts about financed projects.”
This sentiment is echoed by Sarinee achavanuntakul, Head of Research at Fair Finance thailand, who stresses the importance of responsible lending practices:
“Thai banks need to strengthen policies preventing over-indebtedness and to increase accountability and transparency.”
Striking a Balance: Inclusion and Literacy
Looking ahead, FFA, in collaboration with its national coalitions and research partner Profundo, is calling on banks to prioritize both financial inclusion goals and financial literacy initiatives.
“Ensuring that clients are informed about a bank’s sustainability strategies and financing practices is crucial,” states Victorio.
Call to Action: Engage and Demand Better
The findings of this report highlight a critical need for change within the Asian banking sector. Consumers have the power to demand greater transparency, accountability, and engagement from their financial institutions.By actively seeking information about a bank’s practices and supporting organizations like Fair Finance Asia, we can collectively push for a more responsible and lasting financial system.
For more information on Fair Finance Asia’s work and to access the full report,visit https://www.fairfinanceasia.org/.