More Consumers in Hong Kong Seek Help from Financial Institutions as Concerns Over Financial Hardship Rise Under COVID-19
- Latest TransUnion research shows that amidst relaxation of COVID-19 control measures in Hong Kong, concerns over paying household bills is increasing
- Under increasing economic stress, more than half of impacted Hong Kong consumers have sought guidance to alleviate their financial burden
- Over one-third of respondents report receiving some form of financial accommodation.
TransUnion (NYSE: TRU) today announced the latest update to its Hong Kong Financial Hardship Survey, which reveals both rising concerns on the financial impact of the ongoing COVID-19 crisis on household incomes, and more people reaching out to financial institutions for help in managing through the economic conditions that have gripped the city for over four months.
TransUnion has been polling consumers around the world on the financial impact of COVID-19. This is the fourth wave of the Hong Kong survey, which polled 1,069 adults in the week of May 25. This survey wave occurred at a time when cases of local infections had recently re-appeared in the city, and government departments maintained social-distancing measures.
Negative Impact on Consumer Income Resurfaces After Previous Optimism
The latest survey results show that the impact of the pandemic on consumer income has worsened. Compared to the previous wave of the survey conducted in early May, the percentage of respondents who replied that their household incomes were impacted by COVID-19 increased by 8%, from 67% to 75%. Among all generations, Gen X (those aged 41-55) respondents reported the highest level of household negative impact, increasing by 13% from 69% to 82%. In previous waves of the research it was Millennials (aged 26-40) who had recorded they were most negatively impacted (75% in the latest round of research).
Over three quarters (78%) of respondents impacted financially were concerned about paying their bills, a 15% increase since the last wave of the study. Approaching half (45%) of respondents impacted felt they will likely be unable to pay in 1 to 3 months’ time, which is a 5% increase since early May. Credit card bills (46%) were the biggest concern for repayment, followed by rent payment (33%), insurance (30%), personal loans (27%), and mortgages (21%).
“Our last survey in Hong Kong in early May seemed to show that concerns over the financial impact of the pandemic were dissipating. That perceived recovery now appears to have disappeared,” said Francis Lau, director of research and consulting, Asia Pacific, TransUnion. “The financial impact of the virus is being felt hardest by those whose household incomes often have to support both their children and their parents. Their financial hardship is the most worrying in Hong Kong as their situation may affect other generations.”
More Consumers Consult Financial Institutions to Alleviate Financial Distress
The survey results show that more consumers have proactively sought help from financial institutions than before. Over half (56%) of impacted consumers report having reached out to companies to discuss payment options, a 13% increase from the 43% recorded in the previous survey. Companies have also offered more guidance to support consumers, with 63% of respondents impacted commenting that some or all of the companies they consulted provided advice for navigating financial difficulties. This is a 4% increase over the previous survey. As a result, over one-third (35%) of respondents received some form of financial accommodation. The numbers of respondents planning to pay their bills by using their savings, borrowing from friends or only paying back a partial amount all decreased since early May.
“We are beginning to see more consumers becoming more credit-aware and understanding better the diversified payment options that are available to them. That is a positive trend in this challenging time and helps protect long-term savings,” says Marie Claire Lim Moore, CEO, Hong Kong, TransUnion. “Companies should work hand-in-hand with consumers during these challenging times to provide flexible payment options and offer guidance on how to best handle financial payments. The spread of the virus may have slowed in Hong Kong, but the need for financial education continues.”
There was also an increase in the number of people who knew their credit score, with six in ten (60%) indicating they did – an increase of 11% (up from 49%) since the last time the survey was conducted. Nine in ten respondents found self-credit monitoring important during the pandemic.
Postponement of Non-COVID-19 Related Medical Arrangements and Increase in Digital Fraud
The virus outbreak and social distancing measures have also impacted other areas of personal care. For example, over one-third (35%) of respondents commented that their non-COVID-19 related elective surgery, medical appointment or procedure had been cancelled or delayed.
One other important area of concern during the pandemic is cybercrime. Just over one in ten (11%) of respondents in Hong Kong said they were victims of digital fraud, up from 8% in the last survey. Phishing is the most prevalent type of fraud (22%), followed by fraudulent COVID-19 treatment (19%), and identity theft (18%).
TransUnion’s research and credit education tools will be updated regularly on its COVID-19 website as the company continues to support consumers and businesses from around the globe. Businesses interested in learning how to navigate the impacts of COVID-19 can gain insights from TransUnion webinars, here.