[ D O M E S T I C S U R V E Y | M A L A Y S I A ]
A tougher crowd to please
Client expectations of their service providers appear to have grown with a corresponding decrease in scores achieved .
Some 70 % of respondents to this year ’ s Malaysia domestic custody survey are returnees from last year ’ s survey . It is therefore significant that the 2017 Survey of domestic custody services in Malaysia shows a measurable decline in aggregate scores . At a category level , results are down by between 0.23 and 0.75 . Quite why this should be is unclear , as the additional client comment provided does not identify any common thread of dissatisfaction . The size of individual respondents as measured by assets under management continues to grow , however , and larger clients tend to be both more demanding in terms of service requirements and harsher in their assessments of the service delivered .
“ Interestingly , one of the steeper drops was in Special Operations .”
As Figure 1 highlights scores in all 10 categories were lower this year than 12 months ago . While eight of these still record results in the ‘ Good ’ range ( 5.00 – 5.99 ), two – Operational Reporting and Technology – are now regarded as merely ‘ Satisfactory ’. Interestingly , one of the steeper drops ( -0.61 ) was in Special Operations , which includes both dealing with cross-border securities and the processing of Islamic funds . The latter is an area where Malaysia is seeking to establish a global reputation and which is likely to be a promising source of growth for the market as a whole . It is not , however , a capability that local investors responding to this year ’ s survey yet place high on their list of service priorities . Figure 2 ranks the relative priorities listed by respondents this year and last . Special Operational Requirements ranks eight out of the 10 categories , down from sixth in 2016 . Only 8.4 % of survey participants ranked it first or second , while three-quarters listed it between sixth and tenth ; in other words , below the halfway mark in terms of concerns . Interestingly , this category seemed to be increasing in importance , having risen from tenth to sixth . Given the expected contribution of Islamic finance in general to the future growth of the Malaysian market , we would expect the ability to correctly handle the processing of assets in a
FIGURE 1 : AVERAGE SCORES BY CATEGORY
Category 2017 2016 Difference
Relationship Management and Client Service |
5.29 |
5.81 |
-0.52 |
Cost and Value Delivered |
5.00 |
5.63 |
-0.63 |
Settlement and Cash Management |
5.22 |
5.72 |
-0.50 |
Asset Servicing |
5.36 |
5.59 |
-0.23 |
Special Operational Requirements |
5.19 |
5.80 |
-0.61 |
Operational Reporting |
4.87 |
5.62 |
-0.75 |
Technology |
4.94 |
5.51 |
-0.57 |
Fund and Unit Accounting and Valuation |
5.11 |
5.79 |
-0.68 |
Trustee and Administration Services |
5.33 |
5.89 |
-0.56 |
Reputation and Asset Safety |
5.46 |
6.06 |
-0.60 |
OVERALL WEIGHTED AVERAGES |
5.19 |
5.73 |
-0.54 |
FIGURE 2 : RESPONDENT PRIORITIES
Category 1 or 2 (%)
3 or 4 (%)
6 to 10 (%)
Rank 2017
Settlement And Cash Management |
43.37 |
30.12 |
18.07 |
1 |
2 |
Relationship Management and Client |
33.73 |
32.53 |
13.25 |
2 |
1 |
Service |
|
|
|
|
|
Cost And Value Delivered |
28.92 |
21.69 |
22.89 |
3 |
3 |
Reputation And Asset Safety |
24.10 |
13.25 |
46.99 |
4 |
4 |
Technology |
18.07 |
22.89 |
50.60 |
5 |
8 |
Asset Servicing |
12.05 |
20.48 |
56.63 |
6 |
5 |
Operational Reporting |
12.05 |
13.25 |
55.42 |
7 |
7 |
Special Operational Requirements |
8.43 |
2.41 |
74.70 |
8 |
6 |
Fund And Unit Accounting And Valuation |
3.61 |
24.10 |
39.76 |
9 |
9 |
Trustee And Administration |
3.61 |
9.64 |
50.60 |
10 |
10 |
Services |
|
|
|
|
|
OVERALL WEIGHTED AVERAGES |
6.48 |
6.39 |
0.09 |
|
|
Rank 2016
66 Global Custodian Summer 2017