‘How does a tiger bank?’, ask Macquarie researchers

The rapid growth of China and other Asian economies has been one of the major economic stories of the century. With increased savings and investment capabilities, international banking and finance companies are keenly interested in attracting new customers in, and from, the region.

However a recent McKinsey study revealed that consumer behaviour in Asia is changing rapidly and international banks face a number of challenges in the Asian market, with local consumers strongly loyal to local banks and generally reluctant to borrow.

In light of this ‘changing face’ of personal finance in Asia, Macquarie academics Dr Chris Baumann and Dr Hamin have teamed up with Professor Rosalie L. Tung from Simon Fraser University in Vancouver to investigate the differing behaviours of Caucasians and Chinese when it comes to retail banking.

Published in the International Journal of Bank Marketing, the paper ‘Share of wallet in retail banking’ follows on from Dr Baumman and Professor Tung’s earlier research on the different attitudes to money amongst overseas Chinese and Chinese in China.

Dr Baumann says he and his colleagues were initially drawn to the topic because of the unique characteristics of the Chinese market, with its distinct Confucian culture.

“Ethnic Chinese in Australia and Canada have developed their own unique behaviour,” he notes. “There tends to be an over-adaptation to local behaviour when managing their assets”.

Known as ‘crossvergence’, this behaviour constitutes a challenge for Western banks, who are required to adapt to the distinct patterns of loyalty and banking behaviour among their Chinese customers.

The paper also highlights the need for banks to adopt ‘ethnic banking’ practice and customise products and services to successfully engage with Chinese customers.

A Senior Lecturer in Macquarie’s Department of Marketing and Management, Dr Baumann will soon be taking his self-described ‘passion for dynamic East Asian markets’ to Seoul National University, where he will teach a marketing course.

“The world has become global, and we need to live that spirit in order to teach it to our students,” he says.