Malaysian (and ASEAN) banks need to step up their digital gameplan
To fully embrace the digital scene, banks need to be more open in terms of working with key players to push local business into adapting the competitive environment
Digitalisation is taking the global economy by storm, Malaysia and the rest of the ASEAN members are not exempted from joining the trend with the surging numbers of e-commerce and fintech.
Yet, it seems like local banks are still not taking charge to embrace this inevitable change. If this continues, giant digital players such as Google and Apple might just wipe off the entire banking industry in the future. At least it sounds like so, according to some of the bank leaders.
At the Asian Institute of Finance Symposium 2016 entitled ‘Talent, Technology and Tomorrow’s Workplace’, Hong Leong Islamic Bank Bhd CEO Raja Teh Maimunah Raja Abdul Aziz has urged the industry players to realise the potential threats coming from non-finance entities that have ventured into digital payment business.
“The introduction of digital payment systems has disrupted the financial industry globally and banks are facing risks of losing market shares and even position if they are still refusing to adapt into the changes. I would be very worried if you are still not worried now,” she told the participants at the event on 17th August.
Also Read: Smart Nation be damned: Singaporeans aren’t embracing innovation
To recap, Google’s Android Pay platform was launched in May 2015 where most credit and debit cards are available in the United States, Europe and Australia. The giant tech company joined the battleground with its rivals, Samsung and Apple, whom entered the market a year earlier with Samsung Pay and Apple Pay.
This year, Visa has bring excitement into the local market with the introduction of Visa Checkout, specifically designed to tackle the issue of online payment hassles by reducing steps of filling in details in the payment page.
To be fair, one of the largest banks in Malaysia, Maybank has launched its first mobile wallet, MaybankPay, which will allow customers to pay using their smartphones, and the amount will be charged to their Visa cards.
Not only targeting Malaysia, Maybank intends to launch the app in Indonesia, Singapore and the Philippines by the end of next year. This has caught the attention of its competitors and many are awaiting the next plan from these players to spice up the competition.
Also Read: Disruption in Singapore: Is your industry next?
Embracing fintech and e-commerce
The emergence of fintech and e-commerce platforms in the local market continues to bring excitement to the local economy. However, consumers and digital players are hoping that more banks will improve their digital platforms.
Despite having e-banking or online banking, banks are still underestimating the mobile banking segment to drive for better consumer experience. In a survey report titled ‘2015 Frost & Sullivan Malaysia Customer Experience’ carried out by the firm, mobile applications are still under-utilised despite the growth of smartphones or tablets in the Malaysian market.
Apart from having applications for banking services, number of features provided is still limited while layout is not user-friendly, according to an industry observer.
“Rather than lingering on developing digital platform on their own with limited success, banks should take into consideration to leverage on the emerging fintech companies to reach out to consumers,” Raja Teh Maimunah added.
E-commerce platforms such as Lazada, Uber, Grab and Airasia are continuously improving their payment systems to sustain their businesses. At the same time, fintech startup such as CompareHero offers the consumers and banks better platform for financial products signups through digital platforms.
To fully embrace the digital scene, banks need to be more open in terms of working with these players to push local business into adapting the competitive environment and be on par with regional and international players.
Also Read: Singapore MAS sets up FinTech Innovation Lab; reviewing VC funding rules to boost fintech sector
Room for improvement in digital banking experiences
In the report, ‘Digital Banking: Measuring the Consumer Pulse in Malaysia’ released by AIF, over one-third (37 per cent) of consumers surveyed are regularly using online banking on a monthly basis, while 34 per cent are using mobile banking on a monthly basis. A total of 2,000 respondents aged 18 and above participated in this survey.
Sadly, the survey also showed that customer experience in local digital banking platforms remain relatively low, with only 27 per cent and 24 per cent, respectively, rating ‘very good’. Apart from security concerns and confidence in reliability, top must-have features are still missing in the mobile banking.
These features include personalised products and services based on consumer personal spending and bill payment patterns, a personalised homepage and loyalty points/cashback/discounts for the use of mobile banking.
Other recommended features include personal financial capabilities, shopping updates on mobile apps and a seamless experience across channels will be a boost as well.
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Shen Ooi is a senior content writer at CompareHero, Malaysia’s online financial comparison portal. The company seeks to increase financial literacy in Malaysia by providing free, transparent and detailed product comparisons for credit cards, personal loans and broadband plans.
The views expressed here are of the author’s, and e27 may not necessarily subscribe to them.e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, submit your article here.
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