A new study by Milieu Insight reveals concerning financial practices among Southeast Asia regions, indicating a need for improved financial literacy and comprehensive planning initiatives in the area. Conducted across six markets including Thailand, the Philippines, Vietnam, Indonesia, Malaysia and Singapore, the study included responses from 3,000 individuals.
Findings drawn from the study show that, as per 43% of Southeast Asians, only 10% of their income is saved. Furthermore, more than half (54%) are not actively investing their money, indicating they could be missing out on avenues to accumulate wealth and opportunities for financial growth.
In terms of perceptions of success, the report shows financial security and sufficient retirement savings as significant indicators, second only to maintaining good health. This sentiment is echoed by 52% of the respondents, highlighting the significance of sustained financial well-being in Southeast Asia.
However, the study also reveals a problematic trend, with over 40% of Southeast Asians only saving up to 10% of their income. This figure suggests the need for more extensive financial literacy and planning initiatives. "There's a clear call and need for enhanced financial literacy and planning in the region," states Juda Kanaprach, Co-founder & CCO, Milieu Insight. "With 46% across the region investing, and a significant portion doing so sporadically, there's a pressing need to equip individuals with the knowledge and tools necessary to make informed financial decisions."
The study further identifies that while nearly half of Southeast Asians own and use a credit card, there are significant disparities across different countries. Singapore holds the highest use and ownership, whereas Indonesia reports the least. However, of these credit card holders, 68% pay their balances in full most of the time.
An alarming 54% of respondents aren't actively investing, possibly due to their low financial literacy level, limited access to investment opportunities, or a preference for saving rather than investing. Despite these challenges, investment is not out of the question, with almost half (46%) of Southeast Asians actively investing. Of these, 58% allocate up to 20% of their income towards investments, but 1 in 5 adopt an ad-hoc approach to investing, pointing to a potential scope for better financial planning strategies.
Among the countries surveyed, Singapore leads in terms of active investing, with 59% of Singaporeans investing their money compared to the 46% average across the region. Stocks, fixed deposit plans, and mutual funds emerged as the leading investment areas for Southeast Asians. However, the fear of losing money, long investment timelines, and the fear of missing out on opportunities are the main challenges faced by investors.
A positive sign from the report is the clear openness among Southeast Asians towards professional financial advice, with 60% stating that it boosts their confidence. It's also interesting to note that of those who invest, 49% rely on advisors as their top source of guidance, demonstrating the importance of expert opinion in financial decision-making processes.
Milieu Insight is a survey software company in Southeast Asia, known for its research expertise. At the core of its offerings is Canvas, a survey and data analytics software providing intuitive tools for survey design, distribution, analysis, visualization, and reporting across various sectors. This aims to help businesses to make informed decisions and develop effective strategies.