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Malaysian banks increase spending on digital, engagement financial wellness initiatives

KUALA LUMPUR: About 64 per cent of Malaysian retail banking decision-makers said their respective companies are increasing spending on digital and engagement financial wellness initiatives — the highest figure in the Asia Pacific (APAC) region, more than Singapore, Japan and Australia.

According to a study commissioned by Backbase, a leading engagement banking platform, the revelation came from the submission of applications for a digital banking license from Bank Negara Malaysia.

At the close of the submission date, June 30, 2021, the central bank received 29 applications for five digital banking licenses which are expected to be granted in the first quarter of 2022.

“Malaysia’s retail banking sector is now preparing for the onslaught of competition by offering customers a host of new digital features,” said Backbase.

Its APAC regional vice-president, Iman Ghodosi, said the present situation presents a window of opportunity for banks to build up their digital offerings, as the report revealed that Malaysians have an insatiable appetite for digital offerings.

For example, about 67 per cent of consumers surveyed said they used their banking institution’s mobile app, 87 per cent believes that an excellent mobile app is a feature they value from financial services providers, and 82 per cent conduct their day-to-day banking via their smartphone, he said.

Ghodosi expects the next six months to be a critical inflection point in the digital banking space.

“The urgency and focus behind this are clear — Malaysia has five of the hottest digital banks waiting to explode into the banking scene and take market share next year, and the traditional banks are worried,” he said.

He noted that Malaysians want a higher level of customer service and flexibility for the financial services they subscribe to, the ability to access their personal finances through any channel anytime, anywhere, and the necessary tools to manage it.

“Traditional banks may lose ground if they do not innovate quickly. Now more than ever, it’s important to own the relationship with your customer.

“We have entered the engagement banking era, an evolution that stresses a unified platform approach for banking, and the number one priority is to completely shape the bank around the customer, moving away from siloed technology investments,” he added. – Bernama

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