Top spammers and scammers in Malaysia by anti-spam mobile app Truecaller

Truecaller: The world's best Caller ID & Spam Blocking app

If you’ve been getting a flood of automated phone calls lately about outstanding traffic summonses or a parcel delivery you know nothing about, here’s the likely reason.

Statistics from an anti-spam mobile application show that over the past 12 months, Macau, parcel and other scam syndicates have been making more calls to trick Malaysians into handing over money.

Truecaller – which claims to have 150 million daily active users worldwide – said there has been a 24% jump in the average number of spam calls received by its one million users in Malaysia this year compared to 2018.

The mobile app, which has offices in Sweden, the United States and India, said it has helped users in Malaysia identify and block 90 million spam calls so far this year, typically from telemarketers offering telecommunications, insurance and credit card products and services.

Scam calls are a form of fraudulent activity with the goal of stealing the victim’s money.

Last year, scam calls – including those by Macau Scam syndicates – made up a mere 1% of spam calls received by the app’s Malaysian users.

This year, the figure has ballooned to a whopping 63%, according to the Truecaller Insights 2019 report.

The Macau, parcel and “Astro” scams are among the top scams in the country over the past year, the report noted. The modus operandi of a Macau Scam is by impersonating someone with authority, such as a policeman or a bank officer, and convince the victims over the phone that they need to pay money to avoid trouble.

For parcel scams (which are also sometimes referred to in Malaysia as love scams), the scammer would strike up a relationship with the victims online, and then convince them to send money so that a parcel said to contain a valuable gift for the victim can be “released by authorities”.

In the Astro scam, someone impersonating a representative from the satellite TV provider would call a potential victim to deliver a warning.

“Input we’ve gotten is that they would say you have an unpaid bill and that needs to be paid right away, otherwise you’ll be reported for it, ” a Truecaller representative said.

The report’s findings are reflected in official figures on losses suffered by the victims.

Police statistics show that of the five currently active syndicated commercial crime cases this year, investment scams took the number one spot, recording the biggest losses at RM200.78mil, with Macau Scam in second and parcel scams third.

On Nov 12, Deputy Home Minister Datuk Mohd Azis Jamman said 1,911 Malaysians lost RM94.04mil to Macau Scam this year, while 1,303 lost RM67.74mil to parcel scams.

According to the Truecaller report, Malaysia is the mobile app’s 19th most spammed country. In first place is Brazil, where Truecaller users receive an average of 45.6 unsolicited calls a month, followed by Peru (30.9), Indonesia (27.9), Mexico (25.7) and India (25.6).

While Malaysia may not be the most spammed country it does hold another unsavoury record.

“Analysing this year’s data, we can see that Malaysia is the market that receives the biggest percentage of scam calls in the world, ” the report said.

Malaysia is trailed by Australia (60%), Lebanon (49%), Canada (48%), and South Africa (39%). The police have a Facebook account, Cyber Crime Alert Royal Malaysia Police (https://www.facebook.com/CyberCrimeAlertRMP/) to warn the public about scams.

A web portal set up by the police, http://ccid.rmp.gov.my/semakmule, allows people to verify telephone numbers and bank accounts that could be used for scamming.

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Spam calls up by nearly a quarter in Malaysia: anti-spam mobile app Truecaller

PETALING JAYA: Malaysia has seen a 24% rise in the number of unsolicited (spam) calls this year which includes those from Macau Scam syndicates, according to anti-spam mobile application Truecaller.

Truecaller - which claims to have 150 million users worldwide – said its one million daily active users in Malaysia received more than 90 million spam calls so far this year that the app managed to block.

"Over the past 12 months Malaysia has seen a 24% increase of spam calls, going from 6.7 spam calls per month to 8.3," the Truecaller Insights 2019 report said.

The report said Malaysia ranked 19th among Truecaller market countries in terms of the number of spam calls. Brazil tops the list, with Truecaller users in the country getting an average of 45.6 spam calls this year.

In second place is Peru (30.9), followed by Indonesia (27.9), Mexico (25.7) and India (25.6).

Spam calls are divided into several categories which include scam calls such as those by the Macau, parcel and "Astro scam" syndicates.

Other types of spam calls include those by telemarketers offering telecommunications, insurance and credit card products and services.

The MO for a Macau scam is that the scammer would impersonate someone with authority such as a policeman or a bank officer over the phone and convince the victim that they need to pay money to avoid trouble.

For parcel scams (which are also sometimes referred to in Malaysia as love scams), the scammer would strike up a friendship or relationship with the victim online and then convinces them to send money or entice the victim with a parcel delivery.

In the "Astro scam", someone impersonating a representative from the satellite tv provider would call to warn the potential victim of a supposedly unpaid bill which needs to be settled immediately to prevent a report from being lodged.

The Truecaller report noted that Malaysia is the top country where the biggest percentage of unsolicited phone calls comprises of scam calls.

"Analysing this year’s data, we can see that Malaysia is the market that receives the biggest percentage of scam calls in the world.

On Nov 12, Deputy Home Minister Datuk Azis Jamman said 1,911 Malaysians lost RM94.04mil to Macau scams this year while another 1,303 lost RM67.74mil to parcel scammers.

The Truecaller report said that other than Malaysia, other top countries with the highest percentages of scam calls include Australia (60%), Lebanon (49%), Canada (48%) and South Africa (39%).

The police have a Facebook account, Cyber Crime Alert Royal Malaysia Police to warn the public about scams, as well as a portal for people to verify telephone numbers and bank account numbers that could be used by syndicates carrying out such scams.


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How to outsmart smartphone scammers ?

You carry your smartphone everywhere. But the way you use it could leave you vulnerable to specific forms of identity theft, including robocall scams and hackers looking to hijack your phone number. — AP

Financial talent crunch worsen

PETALING JAYA: The talent crunch in the local financial services sector is expected to worsen in the coming years partly driven by the Gen Y segment that currently makes up about 25% of the workforce in the banking system.

Asian Institute of Finance (AIF) chief executive officer Dr Raymond Madden said that the talent shortage could be due to the lack of understanding on how to cope with the Gen Y group.

Madden:‘At the moment this group of people (Gen Y) makes up about 40% of the current workforce in Malaysia.

“Within the next eight to nine years, we expect the Gen Y workforce in the banking system to rise to about 50% from 25% currently, which means that almost half of the people working in banks will be Gen Y employees, namely those below 30 years of age.

“At the moment this group of people (Gen Y) makes up about 40% of the current workforce in Malaysia and in many Asean countries. This number is expected to increase to 75% within a relatively short span of time,’’ he told StarBiz.

According to the Financial Sector Blueprint published in 2011, the workforce number in the financial sector stood at 144,000. It is anticipated that over the next 10 years, the sector would require a workforce of about 200,000, an increase of 56,000 from the current 144,000 employees.

Madden said among the sectors in the financial services industry that were facing talent shortage was in Islamic finance, notably in the areas of syariah expertise.

Besides this, he added, the crucial areas in the banking system facing talent shortage were in credit and risk management, corporate finance, treasury and wealth management.

He said due to the expected rise of the Gen Y workforce in the financial services in the coming years, banks and other financial services sectors needed to have a better understanding and knowledge of this group.

This group, he said, was looking at what he termed as the three E’s – engage, enrich and empower. He described Gen Y as an impatient lot as they wanted to be prominent in the organisation and would join another organisation if they did not achieve their targets.

As this group was ambitious and wanted to climb up the career ladder as quick as possible unlike their older counterparts, hence employers needed to know how to deal effectively with the Gen Y segment.

Towards this end, Madden said AIF – through its four affiliate institutions – was working closely to beef up talent in the financial services sector.

The affiliates are Institute of Bankers Malaysia (IBBM), Islamic Banking and Finance Institute Malaysia (IBFIM), The Malaysian Insurance Institute (MII) and Securities Industries Development Corp (SIDC).

For example, he said the Financial Sector Talent Enrichment Programme (FSTEP), which is run by IBBM, had played an important role in training new graduates in the financial services industry.

FSTEP is an intensive-training programme that prepares trainees for the operational aspects of finance and banking.

AIF in collaboration with UK-based Ashbridge Business School carried out a survey this year, which among others, showed that 22% of Gen Y employees in Malaysia believed it was reasonable for them to be in a management role within six months of starting work at their respective organisations.

Commenting on the survey, he said there were also inter-generation gaps that existed in the financial services industry between the Gen Y and their older managers, adding that there was a clear difference in perception of Gen Y managers and Gen Ys themselves.

The survey polled 1,200 financial services professionals, including senior human resources personnel who actively manage Gen Ys in their respective organisations.

Contributed by by Daljit Dhesi - The Star/Asia News Network

How to avoid future complications when buying a house?

Points to consider when buying a house to avoid future complications

CAN you afford a house now?

Assuming you can afford a house, how much can you afford to pay? These are important questions that many people do not research. This oversight can lead many people to bad debt and even bankruptcy.

Your monthly expenditures will be more than just the housing loan. There will also be insurance, electricity, water, telephone bills, contributions to maintenance fund, medical bills, groceries, unexpected household/auto repairs, lunch money and many other obligations.

They must all be accounted for in your budget spreadsheet. For many of us the purchase of a house or property is the largest financial commitment we will ever make. This makes arranging the most suitable housing loan just as important.

Make sure you know the costs of entering into the loan for the purchase of the property. They include conveyancing, application fees, valuation and legal fees, mortgage insurance (if necessary) and sometimes, extra life insurance premiums.

Some lenders will tell you the advantages of whatever housing loans they are trying to squeeze you into, but rarely will they tell you the disadvantages.

According to an article in a business magazine, the banking system is flush with RM180bil liquidity. This explains the increasingly aggressive sales promotions undertaken by financial institutions for the housing industry.

Always look at the total deal, not some dangling carrots in front of you. Compare the entire housing loan cost of different lenders to determine which is best for you.

I would like to discuss some of the lenders' offers that may not be as attractive as they appear. I will start with the special low interest offered for the first year. Such an offer is usually given during a sale campaign and it usually carries a fixed calendar period with a run-out date. Thus, even if a house buyer commenced his application process immediately upon the launch of the campaign, by the time the loan is approved and disbursement commences, the period remaining to enjoy this special low interest rate will certainly be less than one year.

If he were to start the application process a few months after the campaign, it is likely that he will enjoy the special low rate for only a very short period.

Due to our unique system of progressive payments to the developers, the mean average of the amount disbursed by the banks during the “first year low interest offer,” is really lower than the loan amount. Thus, any saving on interests is really much less than it seems. And these have all been figured out already by those marketing experts in the banks.

A more sincere approach would be to offer the special low interest rate to apply during the progressive payment period and to continue to run for one year after the date when the loan is fully disbursed. Only then can such offers bear some element of sincerity. I believe that anything short of that makes the offer a sales marketing gimmick.

There are other clauses that put house buyers in a disadvantaged situation. Some lenders include clauses in the loan agreements that give them the absolute rights to alter both the Base Lending Rates and/or the margin of interests.

Doesn't this in effect nullify their typical attractive offer of “BLR plus X% for following years?”

One cannot make a special low interest offer in the sales campaign and then contractually (through the loan agreement) creates a clause to allow that special offer interest rate to be invalidated. Make sure you know all the costs of early discharge of the loan.

One other clause to look out for is the redemption of the loan. A house buyer may wish to sell the house and wished to fully-settle the loan.

This is where the conditions for full-settlement differ from one financial institution to another. Think long term.

When one takes a loan, one spends a much longer period servicing the loan beyond the first year or even the second and the third year. So do not be taken in by the very attractive offers during the honeymoon year/s of the tenure of your loan. Remember, the remaining of the 25 years is more important. Do not go for short-term gains only to lose out heavily on the long remaining years.

I would advise house buyers to look beyond the first year of so-called low interest when shopping for housing loans. With the stiff competition among the various lenders today, one should seriously shop around and scrutinise each and every offer before commencing the application process. Talk to your bankers, lawyer friends or seek advice from the National House Buyers Association.

One really has to scrutinise the fine print before making a decision as to which financial institution to go to for a loan. It is about time to standardisde the terms and conditions in the loan agreement so that there will be orderliness in the banking industry.

No more “embedded” clauses within the voluminous stakes of papers one has to initial giving the impression that one has truly read and understood them. It is obviously impossible to read and understand those 40 over pages of legal language that comes with appendixes.

BUYERS BEWARE
By CHANG KIM LOONG 
Chang Kim Loong is the honorary secretary-general of The National House Buyers Association, a non-profit, non-governmental, non-political organisation manned by volunteers. For more information, check www.hba.org.my or e-mail info@hba.org.my

Crime Watch !

Crime Watch...

(1) Today I passed by a building which has an ATM machine. There was an old man looking at me. Suddenly, he called me. He said he didn’t know how to read, so he gave me his ATM card and asked me to help him withdraw money from the ATM machine. I answered ‘NO! If you need help, ask the security to help you.’ Then he said ‘never mind…’ and continued to find other people to help him… REMEMBER: ATM machines have CCTVs. If you help him he will later claim that you have robbed him or stolen his ATM card. Besides, his ATM card could be a stolen one. So please be careful of these tactics. (2) Suddenly your house lights go off. From your window you find that your neighbours still have their lights. So you go out of your house to check the Meter Box. But once you open the door, a knife will be pointing at you and preventing you from closing it. This is when you will be robbed and injured. REMEMBER: Even though your electricity suddenly goes off, DO NOT open your door immediately. Look around to see if there is anything unusual or if there is any noise around. (3) This is another incident. You may have heard about it before; it is about a lady who saw a kid crying by the roadside. When she spoke to the kid, the kid told her he was lost and wanted her to take him home. The kid even gave her a paper with his house address. So she took him home. But when she rang the door bell, she had an electric shock. Later when she woke up, she was naked in an empty room. REMEMBER: Being such a compassionate and helpful person might not be a good thing these days. Girls, please be careful. DON’T BE TOO KIND! (4) One day, there was an old lady outside my house holding two packets of sweets. At first I thought she was our neighbour and wanted to give us these packs of sweets as a gift. But then when she spoke, I realise that she was foreigner. I could not understand what she was talking about. I guessed she must be asking for money. I sensed there was something wrong and immediately closed the door and ignored her. Later, I found she and an accomplice robbed someone else down the road. (5) I was at the ATM machine to withdraw some money. Behind me, there was an old lady. She asked me whether I was able to withdraw my money because she said she had problem with the machine. Suddenly a small girl came up beside me. The small girl was tugging and squeezing in front of me. I thought she was just naughty and playful. But then, the small girl placed her hand inside the tray of the ATM machine where the money was being dispensed out; ready to take away my money. I sensed something wrong and immediately pushed her away. Later I realised that the small girl and the old lady worked hand in hand together. She was trying to steal my money while the old lady was trying to distract my attention by asking me questions! REMEMBER: BE VERY CAREFUL when you are at an ATM machine and be alert. Look out for anyone suspicious around you! (6) My parents are retired and stay at home most days. One afternoon, a young stranger went to their house and said his motorcycle had no more fuel and the petrol station was too far away, for him to push his bike there. So he asked my parents for an empty coke bottle to buy some petrol. He said he will pay RM2 for the bottle. So my mum gave one coke bottle to him. He really took out the money from his pocket, but it was a RM 100 note. He told my mum he had no small change and asked my mum to give him the change. Luckily my mum was smart. She just told him to take it for free. REMEMBER: obviously that note isfake! Who would want to pay for RM2 for an empty coke bottle! It’s very OBVIOUS that that stranger was a trickster. (7) This happened in Bali . A newly married couple was having their honeymoon at the hotel. When both were in the changing room, the wife suddenly went missing. The husband was very anxious and went around finding her. He asked the hotel staff to help him find her. Then he thought his wife was just playing hide and seek. So he went back and waited for his wife. After a few hours, he decided to call the police. Three weeks passed and there was still no news about his missing wife. So he went back and was very disappointed and sad. A few years later, he came back to Bali , to watch a ‘FREAK SHOW’ in an old house. He saw a dirty and rusty metal cage. Inside there was a lady without limbs. Her body including the face was full of scars. When he had a closer look at her face, he was shocked to find out that she was his missing wife caged there and used for begging. (8) This happened in Shanghai . A few years ago, a lady reported to the police that her cousin sister was missing in the shopping complex. But after five years, one of her friends found her cousin sister begging at the road side on one of the streets in Bangkok , Thailand . The worst thing was that her cousin sister had no more limbs and her body was tied to a lamp post with a shackle (metal chain). (9) Let’s just shorten this story. DO NOT open your house door when you hear the sound of a BABY CRYING! It might be a trap! Women in the house must be alert to this form of trick. The police said it is the work of a robber or murderer using the recording of a crying baby to attract your attention. This normally happens at night and when you are alone in the house. (10) I read an email that was sent by my friend. Her friend, known as A, went to Luo Hu Commercial City with 2 friends, B and C. Luo Hu Commercial City is known as the Shenzhen counterfeit goods distribution center. There are many people there. It’s also near to the Shenzhen train station and Hong Kong ’s Luo Hu Port. C went to the toilet at the shopping centre while A and B waited outside. After waiting for a long, time they felt uneasy and went into the toilet to look for her. When they went in, there was nobody inside. Both were scared and they called C’s phone. There was no reply. So they reported to the police. The police asked them whether they had seen anybody suspicious going into the toilet. Both said there was none and it’s impossible to bring a person out of the toilet without them noticing! Then A remembered seeing a cleaner pushing a trolley in, and then coming out of the toilet. The police told them that were not the first time such a thing happened there. The police suspected a gang of criminals who were always attacking women in the the toilets of shopping complexes. They use cleaners to kidnap people to harvest their organs for sale. REMEMBER: please be careful when using the toilet. Do not go to the wash room ortoilet ALONE (especially if you are female)! Please at least have a partner with you.

Four British banks to pay for scandal!

LONDON: Britain's four biggest banks have agreed to pay compensation to customers they misled about interest rate hedging products, following an investigation by Britain's financial regulator.

The Financial Services Authority (FSA) said yesterday it had reached an agreement with Barclays, HSBC, Lloyds and RBS to provide appropriate compensation following an investigation into the misselling of the products.

The FSA said it found evidence of “serious failings” by the banks and added: “We believe that this has resulted in a severe impact on a large number of these businesses.”

The finding by the FSA of misselling could lead to compensation claims ranging from many millions to several billion pounds from small companies which bought them.

It is the latest in a string of misselling cases that have plagued the financial services industry for over two decades. Banks are already set to pay upwards of £9bil (US$13.96bil) in compensation to customers for misselling loan insurance.

The news will compound problems for a sector that was hit hard on Thursday by news of a record US$450mil fine levied on Barclays for rigging interest rates.

The FSA said the banks had agreed to compensate directly those customers that brought the most complex products.

The products range in complexity from caps that fix an upper limit to the interest rate on a loan, through to complex derivatives known as “structured collars” which fixed interest rates with a bank but introduced a degree of interest rate speculation.

The banks have agreed to stop marketing “structured collars” to retail customers.

The size of the likely compensation was not disclosed but Lloyds issued a separate statement saying it did not expect the financial impact from the settlement to be material. - Reuters

Consumers' Debt trap of payday loans in UK

 
A third of people experienced greater financial problems as a result of taking out a payday loan, according to Which?

Payday loans are trapping increasing numbers of consumers in a downward spiral of debt caused by exorbitant penalty charges, a consumer group has warned.

More than 60pc of people who take out payday loans are using the money for household bills or buying other essentials like food, nappies and petrol, a survey by Which? found.

The figures show an "alarming" picture of people trapped in debt caused by penalty charges because they cannot afford to pay back the loan on time, the watchdog said.

A quarter (25pc) of those who had taken out loans said they had been hit with hidden charges such as high fees for reminder letters, and one in five (18pc) were not able to pay back their loan on time.

A third of people (33pc) experienced greater financial problems as a result of taking out a payday loan, and 45pc of them were hit with unexpected charges.

Which? said the debt trap was compounded with 57pc being encouraged to take out further loans and 45pc rolling over their loans at least once.

A third of people (33pc) were bombarded with unsolicited calls, texts and emails before they had even signed an agreement.

The investigation of 34 payday loans companies' websites also found that customers could face a £150 charge by one company, Quid24.com, if they repaid their loan 10 days late. Most of the companies failed to show clearly their charges or charged excessive amounts for defaulting.

Consumers were also potentially being allowed to take on credit they could not afford, with eight out of 34 companies failing to carry out any credit checks as part of their approval procedure and nearly two-thirds of those surveyed not asked about any aspect of their financial situation apart from their salary.

Some websites failed to provide any terms and conditions and many of those that did had little or no information about a borrower's rights and obligations or references to free debt advice.

Which? is calling on the Office of Fair Trading to enforce existing consumer credit and lending rules that already apply to payday loans firms and to restrict the default charges that payday loans companies can charge.

Which? executive director Richard Lloyd said: "With 1.2 million people taking out a payday loan last year, it is unacceptable for this rapidly growing number of people to be inadequately protected from extortionate charges and dodgy marketing techniques.

"At its worst, this booming £2bn industry can be seriously bad news for borrowers who are struggling to afford food or pay their bills. People are getting caught up in a debt trap, whacked with high penalty charges, or encouraged to roll over payments and take out more loans at inflated rates.

"The regulator should properly enforce the existing rules that apply to this industry, but they must go further and impose a cap on the amount that lenders can charge for defaulting.

The Government should also now explore other ways to protect hard-pressed borrowers, including Australian-style measures to cap costs and promote affordable alternatives."

Consumer Focus director of financial services Sarah Brooks said: "This research throws up some extremely troubling findings and poses many uncomfortable questions about the growing payday loan sector.

We have long held concerns about the behaviour of some payday lenders and whether consumers are losing out because this industry is not regulated strongly enough.

"Our research in 2010 showed problems with inadequate affordability checks and borrowers being offered multiple new loans or roll-overs on existing loans. Which?'s findings suggest that problems have worsened in this industry and that more borrowers are finding themselves caught in debt traps. Millions are turning to these loans in the current economic climate and it is usually those on lower incomes that suffer most.

"This work is timely given the OFT's compliance review of payday lenders. There is clearly a continuing problem with payday loans and this should give further incentive, if any is needed, for the OFT to act quickly to protect consumers from spiralling debt." Telegrah

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Personal finance: what rich Asian women want for their money?

Starting today, StarBizWeek features a column on personal finance called Money & You, which will focus on money matters as they relate to YOU. Our two writers will take turns every fortnight to shed light on personal finance matters.

■ Yap Ming Hui is an independent financial advisor and author of five best-selling books on personal finance. He is the managing director of Whitman Independent Advisors, an independent financial advisory firm licensed by Securities Commission and Bank Negara Malaysia. Since 2000, Yap and his team of licensed independent financial advisors have successfully helped numerous clients achieve financial freedom. Yap believes that all Malaysians can fully optimise their wealth using a holistic wealth management approach.
 
■ Carol Yip, founder of Abacus For Money, believes that if people understand their money mindset, behaviour and money psychology, they can be financially happy and successful. She actively promotes financial literacy and intelligence within families and for women, youths and retirees.

MONEY & YOU By CAROL YIP

WOMEN in Asia are building and inheriting more wealth than ever before. According to Boston Consulting Group (BSG) 2010 report, the percentage of wealth controlled by women in Asia (ex Japan) is rising nearing 30% annually and total wealth controlled by women reached RM2.8 trillion in 2010. Their heightened visibility in financial circles can be traced to more women achieving success in the workforce and a greater number of women actively managing family finances. Kim Sung-Joo recently made her debut on the inaugural Forbes list of Asia's Power Businesswomen in celebration of International Women's Day recently. She is the youngest daughter of an energy conglomerate tycoon in South Korea and created her wealth from luxury fashion.

The increasing number of wealthy women is also partly because they are inheriting wealth due to their longevity. Puan Sri Lee Kim Hua, 81, widow of the late casino magnate Tan Sri Lim Goh Tong, is one of the 40 richest Malaysians on the 2012 Forbes Asia list.

Without a doubt, Asian women are creating significant financial visibility. But are bankers and wealth advisors paying sufficient attention to this alluring segment of the market?

Women of wealth

Based on research conducted in 2011 by the Family Wealth Advisors Council, a network of US-based, independent fee-only wealth management firms, the financial services industry has a long way to go if it wishes to provide the kind of service wealthy women say they want. The title of the study of high net-worth American women says it all: “Women of Wealth: Why Does the Financial Services Industry Still Not Hear Them?”

Involving 551 women across the United States with a net worth of US$1mil or more, the study collected survey questionnaire data across marital status, employment status, age and net worth. The research looked at what worries wealthy women:

About 86% of working women surveyed consider obsolete careers and eroding earning power as risks to their financial success;

Married women believe health challenges present a greater risk to their financial security than the death of a spouse;

About 96% of women want their unique circumstances and their entire life picture understood by their financial advisor;

About 80% of women (either married or divorced) believe that they will be called on at some point to help one or more of their children in a crisis;

About 81% of retirees see a potential decline in the economy as a major risk, versus 45% of full-time working women; and

About 57% of married women feel that divorce poses a significant risk to their financial well-being.

With women's economic clout in the workplace and purchasing power in all consumer and commercial markets increasing, their dissatisfaction with the financial services industry is also growing. The study clearly showed that women do not like to be considered a monolithic group, but want services tailored to their specific circumstances. Evidence suggests that wealthy women in Asia Pacific are also having similar experiences.

Different women different needs 

As more women call the shots on money, they also want their wealth advisors to do a better job of meeting their needs. They want the same attention, advice, terms and deals that men get with advisers who provide investment recommendations. But, at the same time, women want advisors to tailor services to them because they have very different needs and expectations than men.

In the BSG survey, women said advisors tend to assume they have a lower risk tolerance than men, so advisors provide only a narrow range of investment alternatives. Some women claimed that advisors for women are too quick to focus on strategies that don't emphasise on performance, assuming that women are more inclined to make investment decisions based on social issues. With these and other study insights, wealth advisors who service female clients should foremostly recognise that women want to be treated differently. Some suggestions come from the findings:

Women want to be understood as unique individuals. They want an advisor who listens to their needs and is trustworthy. A fiduciary advisor who knows how to create strategic investment allocations based on a women's situation, goals and risk appetite will stand a better chance of securing their business.

Women are looking for advisors who can provide advance planning, relationship management and investment advice a one-stop boutique financial centre.

The wealth advisor's gender plays an important part of the financial planning process for wealthy ladies. Female wealth advisors will be able to relate better to their situations and challenges than men.

Women's investment attitude

It's no surprise that women's behaviour as earners, investors and savers is the subject of a large and growing body of behavioural economic research, which has yielded important findings. Women prefer to focus on long-term investment goals and seek holistic advice. When women invest, they tend to look for informed advice and better rate of return than men. Women can be too conservative in their approach, especially given the fact that they tend to live longer than men. Ultimately, from the way they seek financial information and advice, to their understanding of the long term, women's financial behaviour holds crucial lessons for all financial advisors.

Women may also tend to limit their trading far more than men do. They prioritise by protecting principal rather than taking risks to grow their assets. A study by the University of Michigan's Retirement Research Center finds that men frequently and unnecessarily trade their holdings. All other things being equal, the male participants trade 56% more than their female counterparts, and the more they trade, the worse their performance becomes “a result of a too-rosy estimation of their own investment skills,” the researchers write.

The landmark study on gender differences in stock investing also finds that men tend to sell too early, or to swap assets for new ones that underperformed what they havve sold. By contrast, women are more inclined to take the long-term view and understand that performance in many cases are best measured over time.

Huge potential 

Women's financial behaviour and preferences across varied situations show major differences from men's. Women's financial strengths are significant. So are their challenges.

The provision of tailored wealth management services for wealthy women is much needed. There is a unique opportunity for the financial services industry to design investment, insurance, trust and estate planning products and services that better address women's needs, psychological preferences, life values and different life stages.

Wealth is a “means of life planning rather than a goal in itself” for women. The one-size-fits-all concept is no longer appropriate. Customised fitting is always the preferred choice to make wealthy female clients happy. Wealthy female clients will be loyal customers when wealth advisors deliver the results they want. A long-term trusting client-advisor relationship will be the result.

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The natural evolution of markets

THINK ASIAN By ANDREW SHANG 

 

Market change: A general view of ebay headquarters in San Jose, California. Websites like ebay and Alibaba has eliminated geographical space by allowing transactions in rural markets to be done online. —Reuters

Man is a social animal. The 19th century sociologist and philosopher Georg Simmel argued that trade and exchange is “one of the purest and most primitive forms of human socialisation.” Last month, while travelling through remote parts of West Timor, in Indonesia, I was able to study first-hand how rural markets operate. I could not help wondering why so-called primitive markets such as these work so well when complex financial markets can be so dysfunctional?

Rural markets in East Timor are wonders of trade. Men and women in tribal costume converge on different villages on different days of the week. Everyone knows when to go to which village for these markets, which typically start at dawn when produce is fresh and often finish by 11am. Economists would surely call this scene of bustling rural commerce a “concentration of liquidity.”

As the late Stanford economist John McMillan argued, the market is a human construction- a tool. The market has features to make it work smoothly: mechanisms to organise buying and selling; channels for information flow; laws that define property rights, and self-regulating rules that govern behaviour.

Most rural markets are much more complex than they appear. They sell everything needed for daily life and have their own hierarchies. The stalls of wealthier, established traders are sheltered and in the best locations, while poorer traders just spread their wares on the ground. Specialisation is evident even in this basic setting there are designated places to buy textiles, fresh meat or fish, vegetables or household goods. These markets also function efficiently as information exchanges. Prices differ depending on who you are and what you know. Tourists pay more because they do not know the local language or rules, while locals bargain vigorously.

In these basic markets, you can observe the entire range of business evolution, from simple production, to wholesaling to final sale. Everything is designed for convenience and to reduce transaction costs. For instance, there are no roadside petrol pumps. Instead, petrol is sold in small bottles because the most common transport are motorbike taxis that carry as many as three passengers plus the occasional chicken or bag of rice.

The permeation of technologies like mobile phones and the internet even into these remote rural areas has accelerated the speed at which information travels through these markets. This means even lower transaction costs between business, between consumers, and from businesses to consumers. In some instances, use of websites like eBay and Alibaba have eliminated geographical space by allowing transactions in such markets to be done online.

With technology ending the isolation of rural markets and linking them to global markets, the production and marketing game is changing beyond recognition. A similar phenomenon occurred in the airline industry. Budget airlines use the internet to sell forward excess capacity at below average cost, thus filling their planes to capacity and maximising profits. This created a new market because before, many people could not afford to fly.

You see the effect of high transportation costs clearly in rural markets. Here, locally produced goods are ludicrously cheap, but imported good are very expensive.

The study of modern, sophisticated supply chains enables us to appreciate the fact that producers do not necessarily make most of their money in the product-to-consumer chain. The rule of thumb is that if a product costs US$1 to make, the distribution and transportation costs may account for US$3 of the US$4 final sale price to the consumer. Common conceptions of innovation still focus largely on creating new products, whereas services or process innovation are probably much more profitable and add more value than is generally understood.

To illustrate, the global trade regime still has a “hardware” focus, concentrating on physical trade rather than the more complex and less measured services trade. Apple innovated not in manufacturing, but in design and lifestyle. This means that it can sell a product at much higher prices than its competitors. Once it has captured a market, value creation comes from downloading new apps for the iPhone and iPad.

Financial services have emerged as one of the most profitable businesses, certainly until the last financial crisis. For a time before the 2007 crisis, the turn on capital in the financial sector was 20% per annum, significantly higher than for manufacturing and other real sector businesses.

With the benefit of hindsight, we now know there were two major reasons for the large profits in finance. The first is that the physical cost of creation of a financial derivative is almost zero, as it is an abstract product of its creator's imagination. For many, the reason to buy a derivative is to hedge and reduce risk. If a buyer believes that the hedge is useful, which it can be under specific circumstances then he or she will be willing to pay a premium for that hedge. A second reason is leverage. The greater the leverage, the larger the profits are for both lender and borrower. But there is a catch it adds systemic risk to the entire market and can be fatal to the over-leveraged borrower.

The FX Accummulator is a good example. It is a financial product that looks and feels like a wonderful foreign exchange hedge that yields good profits for the speculator. However, many were not aware that at certain price levels, the amount of margin called by the lender could be greater than the total assets held by the speculator. Thus, what appears to be a “safe” hedge can turn out to be toxic, particularly when markets are volatile.

This raises the question whether financial markets have evolved beyond the limits of social safety. University of Southampton Professor Richard Werner is one of the first to point out that there are two aspects of credit creation one that contributes to real value creation and one that does not. Financial markets have evolved into highly complex systems that consumers, financial experts or regulators do not fully understand. Increasingly, they contribute less to social utility and become systemically fragile.

As McMillan presciently pointed out, “markets are not miraculous. There are problems they cannot address. Left to themselves, markets can fail. Viewed as tools, markets need be neither revered nor reviled just allowed to operate where they are useful.”

Rural markets arise from communities that have organised their commerce in such a way that reinforces social utility and stability. The Holy Grail of financial theory and practice in the world's advanced economies is to identify at what level of complexity financial markets exceed the limits of social stability.

Andrew Sheng is President of Fung Global Institute.

Banks tighten lending rules amid uncertainty

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By DANIEL KHOO danielkhoo@thestar.com.my

KUALA LUMPUR: The competitive environment for loans by banks will likely abate in the months ahead despite a general slowdown of loan growth which is expected this year, analysts said.

This is because banks in Malaysia are also expected to put their own interest first and extend loans to the consumer sector more cautiously given the uncertain backdrop amid the economic turmoil in the US and eurozone.

“It is quite normal to be more cautious as dark clouds gather over the horizon. However, I don't expect the slowdown to be as bad as it was back in 2009 when the sub-prime crisis hit the US,” said a banking analyst from one of Malaysia's top three banks by market capitalisation.



“Given the state of the global economy, it is timely that Bank Negara imposes stricter rules on lending to continue to keep lending activities in the country at a healthy state. A healthy banking system will only ensure a healthy economy,” the analyst added.

Bank Negara's more stringent revised lending rules came into effect on Jan 1.

Show-and-tell: Data released by Bank Negara showed that loan growth in November 2011 moderated further to 12.8% from a 13.1% and 13.8% growth in October and September 2011 respectively >>

Effective this year, the debt service ratio of a loan applicant is calculated based on the person's net income rather than gross income, which means the calculated income of the applicant is based on his or her take home salary after tax deduction and Employees Provident Fund contribution.

The softening competition for loans also means that loan growth is likely to slow further from the preceding two months.

Data released by Bank Negara showed that loan growth in Nov 2011 moderated further to 12.8% year on year (yoy) from a 13.1% and 13.8% yoy growth in October and September 2011 respectively.

CIMB Investment Bank's analyst Winson Ng had in a report on the sector outlook said that there was still a downside to the industry's loan growth even though it had declined for the two months.

“We are projecting total loans growth of 12-13% for 2011, followed by a softening to 9-10% in 2012 when consumer loans are expected to increase 10-11% and business loans are expected to advance by 8%-9%,” Ng said in his report.

Despite the apparent slowdown in loan growth, Maybank Investment Bank said that the scenario might not be as bad as it seems because there was a pick-up in loan applications and approvals, with a slight improvement in spreads in November 2011.

Maybank analyst Desmond Ch'ng said that the total system loan growth in 2012 was expected to slow further to 9.4% while loan growth was expected to be at 12.4% in 2011.

Meanwhile, RHB Investment Bank said in a report that Bank Negara could resort to cutting interest rates should global economic conditions deteriorate further and that it expected Bank Negara to employ a more proactive approach to “begin cutting interest rates sooner rather than later.”

RHB said that based on its sensitivity analysis, the Alliance Financial Group Bhd and Malayan Banking Bhd would be more adversely impacted by a cut in interest rates due to their higher proportion of variable-rate loans.

Jobless schizophrenic with 12 credit cards owes RM50,000

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By AMANDA NG YANN CHWEN and KATHY CHIN newsdesk@thestar.com.my

KUALA LUMPUR: An unemployed schizophrenic has landed himself with a RM50,000 debt – no thanks to his 12 credit cards.



MCA Public Services and Complaints Department head Datuk Michael Chong said the man, known only as Y.F. Chong, 35, had approached him for help as he was afraid he would go to jail.

“Why was it so easy for him to get so many cards when his salary was only 1,500?” he asked reporters at a press conference at his office here yesterday.

Y.F., who used to work in a milling factory, said he would apply for every credit card offered to him by promoters at shopping centres and was approved for all of them.

He said that when he lost his job in October due to his condition, which was diagnosed in 2004, he started depending on his credit cards to get by.

“Previously, I used to pay for trips to spas and a holiday in Thailand with my credit cards,” he said, adding that he even took two supplementary cards for his mother and sister.

He said last year, the banks started demanding payment, adding that all his cards have now been cancelled.

“If I still had a job, I would pay off the debts by instalment, but I am jobless now,” said YF, who because of his condition, claims somebody is following him and poisoning his food.

Schizophrenia is a mental disorder characterised by a breakdown of thought processes and by poor emotional responsiveness. Symptoms include auditory hallucinations, paranoia or delusions,

He claimed that when he tried to file for bankruptcy, the Official Assignee office asked him to pay another RM1,500 for filing charges.

“I couldn’t as I didn’t have the money,” he said.

Chong expressed amazement that YF managed to get 12 credit cards.

He said he had tried to apply for a Gold Card more than 10 years ago, and was rejected.

“Why is it so easy to apply for credit cards now?” he asked.

Chong added that it was not surprising that so many young people in the country were in serious debt.

“There’s something really wrong with the current system,” he said, adding that banks should have a more thorough vetting process.

Banks offering more attractive home loans to boost market share

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Rising competition prompts banks offering more attractive home loans

By DALJIT DHESI daljit@thestar.com.my

PETALING JAYA: With razor thin margins due to rising competition in the home loans market, banks are now aggressively value-adding their home loans to stay competitive and boost their market share.

OCBC Bank (M) Bhd head of secured lending Thoo Mee Ling said banks must value-add to their generic home loan offerings in order to not just survive but thrive, especially in this competitive climate.

“What separates those who thrive from the others today is how much they have moved from price to innovation. It is heartening to see a greater emphasis today on enhancements to loans products, rather than mere reliance on price cutting previously.

“This is where banks are getting even more creative by adding in the necessary finer details to a product that otherwise appears bland. Home loans with features and benefits that are tailored specifically to complement customers' lifestyles often serve to compel them to look beyond price and into a more holistic perspective,'' she told StarBiz.

File picture shows a housing are in Shah Alam - Starpic by BRIAN MOH
 

Thoo said customers were nowlooking for more than just a home loan as purchasing a house was simply the beginning.

Banks would also need to cater to their immediate follow-on needs like renovations and furnishing, for example, and this was where additional financing that came with the home loan would be helpful, she reckoned.

At OCBC Bank, she said there were bespoke home loans that were tied in with study loans, renovation loans and even overseas property financing schemes, adding that each of these took into consideration things that went beyond mere property purchase.



She said it was undeniable that investing in a product to bring in customers and then introduce them to other products remained a good strategy for growing the business, but banks would still need to strengthen their range of offerings to become a one-stop shop for their customers.

Outstanding home loans, valued at RM261bil, accounted for about 27% of the total banking system's loans as at end-September 2011. Although there has been strong expansion in home loans in the last couple of years, the proportion of home loans has been hovering at 27% in the past five years.

,B>Thoo: ‘What separates those who thrive from the others today is how much they have moved from price to innovation.’

Commenting on home loans, RAM Ratings' head of financial institution ratings Wong Yin Ching said competition among banks in the home loan market had been rife, resulting in razor thin margins in recent years.

This stemmed from the homogeneity of the home loan products, whereby any innovation in product features and price competition (by lowering rates) were quickly replicated and matched by market players, she said.

Wong added: “While some banks have instilled more discipline in its risk-reward pricing, aggressive pricing is still seen in the market and this is unhealthy and unsustainable in the long run.

“Going forward, we think that personalised services and quicker turnaround times by banks would be key to stay relevant in the home loan market.”

Alliance Bank Malaysia Bhd executive vice president and head of consumer banking Ronnie Lim said competitive pricing aside, Malaysian banks were now re-inventing the mortgage landscape by extending superior customer experience at every customer touch point.

For the bank, he said having mortgage specialists, who also acted as advisory consultants, among others, had enabled Alliance Bank to become one of the key mortgage players in the market.

He said the bank has been growing its mortgage specialists force extensively to not only engage customers effectively but also deepen its relationship with developers, lawyers and real estate agents.

Lim added the bank was also able to provide fast “approval in principle” service to assist customers looking for home financing solutions to make informed decisions before committing to their choice property.

For mortgage players, he said one of the key challenges was about overcoming margin compression and the bank was able to achieve this by introducing new systems and processes to help staff increase their productivity.

This had since yielded results: “For the year under review, sales productivity has increased threefold compared to a year ago,” he said.