March 08, 2021
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In partnership with Going Places by Malaysia Airlines
At the LEAP Summit in November last year, TM ONE Chief Executive Officer (CEO), Ahmad Taufek Omar said: “Every disruption pivots on creativity – a new vision, a new insight of how technology can uplift people and their goals onto a more agile, faster path.”
His words could not have been more prescient for the disruption that followed just a couple of months later, when the Covid-19 pandemic swept the globe, sending industries scrambling to regain their footing.
Nearly a year since the summit, though the dust remains unsettled, the vision, insight and technology he alluded to are on clear display in the business world. Quite simply, there is a cultural shift underway, and there is already a lot that businesses can do – culturally and technologically – to become more resilient in a changing world.
1. Have a business continuity plan
Analyst firms such as Omdia (formerly Ovum) expects Malaysian businesses will view the pandemic as a catalyst to sharpen their business continuity measures and change the way they do business. Ideally, enterprises should have a specific pandemic-focused business continuity plan (BCP) already prepared, says the Omdia report, but – as an alternative – repurposing an existing one that covers “civic emergencies” should suffice.
“The plan should incorporate a tiered response, clearly identifying the actions to be taken at each level and the circumstances that would trigger implementation of the next level,” notes the report.
Professional services network EY elaborated on the requirements of a strong BCP in a March 2020 report, highlighting the need for employee health and safety, short-term liquidity, knowledge of government support measures and many other operational details.
2. Embrace digital transformation
The ability to work effectively and safely away from the office is a key aspect of business continuity and stability, as it is the ability to meet fluctuations in customer demand resulting from any disruption.
There have been a few reports of organisations experiencing big jumps in traffic during Malaysia’s Movement Control Order (MCO) period earlier this year, putting strain to their network and resources, and necessitating an overnight infrastructure upgrade.
Rather than waiting for another disruption, companies can be better prepared by moving data centres and other operations to the cloud and introducing remote meeting and file-sharing applications into their daily operations.
3. Ensure your company culture adapts
While there is a need for digital transformation, it must go hand-in-hand with a shift in company culture. A recent survey by productivity software company Wrike found that 49% of workers have never worked from home. Not only is there a generational difference around attitudes towards working remotely, there is a lack of consensus around manager expectations, best team practices, efficient software and suitable IT infrastructure.
But the new paradigm of working remotely will become mainstream and attitudes must catch up. Ahmad Taufek also commented on the cultural changes required for digitalisation during an interview last year, “Culture is a critical factor underlying a successful transformation. Companies, whether they are big or small, must be ready to change their mindsets to stay relevant and to adapt to the new order of the economy.”
All the appropriate technologies, and cloud infrastructure services are already on hand to ensure companies can operate from both home and the office. It is now a matter of implementation well ahead of the next disruption.
4. Practise strong stakeholder communications
As part of its 2019 Global Crisis Survey, consulting firm Pricewaterhouse Coopers (PwC) found that companies are able to not only survive in times of crisis, but also emerge even stronger in the aftermath, as a result of being prepared and having effective stakeholder communications.
This communication must be regular, transparent and far-reaching, relaying not just evolving company policies but also relevant government guidelines. Furthermore, it must extend beyond immediate employees, and include customers, suppliers, creditors and investors, just to name a few.
5. Look at adjacent industries and prepare
According to American customer service software company Zendesk’s Benchmark Snapshot, of the 23,000 companies that use their services, the three biggest industries that have seen spikes in support requests since late February are restaurants, grocery brands and remote work & learning.
Companies in the same or adjacent industries can glean a great deal of useful information from successes in these three areas, particularly in terms of the digital transformations implemented this year.
6. Implement data-driven decisions
Disruptions are times for quick-thinking and fast decisions, but that doesn’t mean company leadership should shoot form the hip. The PwC survey also found that companies become stronger when supported by data-driven decision making.
Having a big data initiative in place ensures that businesses can respond effectively and swiftly, based on dynamically evolving set of data. The ability to make fast and well-informed business decisions is yet another reason why digital transformations – and the resulting collection of relevant data – can yield benefits well into the next disruption.
As Malaysia’s digital enabler for enterprises and public sector, TM ONE has played its role in helping customers to weather challenges whenever and wherever required, and this has been especially true during the Covid-19 pandemic.
Through its Cloud Alpha service, TM ONE supports infrastructure, platform and software needs. That means companies can implement everything from remote servers and collaboration and file-sharing platforms, as well as big data gathering, expanding as their needs grow, and with 24/7 IT support.
Covid-19 has been a once-in-a-generation disruption to lives and businesses. But it has prompted innovation, preparedness and digital transformation across all sectors. In Malaysia, it has kick started a new digital revolution that will ensure better resiliency in the years and generations to come.
For more information on how to begin a digital transformation for your company, please visit TM ONE’s Cloud Alpha service website.
April 07, 2021
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As enterprises race to digitalise, new, cutting-edge technologies are becoming more viable than ever, with increased speed and power and decreased costs
In partnership with Going Places by Malaysia Airlines
The pandemic has forced Malaysia and the whole world into an accelerated migration to digital technologies. Businesses are witnessing the deployment of remote work and digital access to services across every domain. To fully participate in this evolution, companies need to incorporate digital transformation at each step of the customer journey and adapt business processes to the new normal.
All eyes on the enterprise sector
Charged with servicing vast numbers of consumers with speed and accuracy – and often, in person – Malaysia’s enterprises know all too well both the urgent pressures and the structural difficulties of adapting to disruptive changes. After all, most organisations today are handling huge volumes of data, and many are using aging legacy IT systems that may be difficult to upgrade.
It remains to be seen whether Malaysia’s enterprise sector can become sufficiently agile quickly enough to thrive in the digital age. The market is also observing large enterprises struggling to keep up with startups that are increasingly disrupting traditional forms of business and meeting customer needs more rapidly via digital platforms.
A company that successfully transforms into a digital enterprise uses technology as a competitive advantage in its internal and external operations, from how it operates, develops products and services to how it generates revenue and engages with customers. Companies that do this successfully also can become economically efficient and more flexible in adapting to future market changes.
Moreover, digitalisation is opening up new markets and creating ecosystems that often extend across multiple sectors. Connected and autonomous vehicles, e-medicine, fintech, e-tailing and smart cities are all enabled by connectivity, growth in storage and bandwidth, advances in cognitive technologies and increasingly sophisticated data analytics.
Three key technologies
Smaller enterprises now have access to sophisticated capabilities once only available to huge multinationals, increasing demand and creating a virtuous cycle for more products and services. Three digital technologies have risen to the fore as the key foundational enablers.
First is smart services, which promise to transform enterprises by embedding intelligence into critical infrastructure and everyday objects from any device, anytime and anywhere.
Secondly, cloud-based platforms have proliferated in response to a rising need for allowing multiple stakeholders to access corporate data, customer information and projects from different locations and devices in real-time.
Digital innovations also bring new risks to businesses, such as cyberattacks, data breaches and other online threats. Enterprises need to convince their customers that data collected by the smart services, processed and stored in the cloud, is secure. This necessitates the third technology – cybersecurity. Enterprises must invest in advanced cybersecurity measures to accompany all the newly incorporated technologies and build digital trust. While implementing these and other new technologies, enterprises will have to adapt their IT and business models as well, ones that are agile enough to place technology at the core of the company strategy.
TM ONE, your partner in digital transformation
The enterprise and public sector business solutions arm of Telekom Malaysia Berhad (TM), TM ONE is committed to offering workable, customisable digital solutions to the enterprise sector. In addition to cost-effective networks, TM ONE also helps digital enterprises remain resilient through smart services, cloud platforms and cybersecurity solutions.
More than just technology, TM ONE has the human touch. Its experts are well-versed in industry best practice and compliance standards. Through professional and managed services, TM ONE’s team assesses a company’s needs and develop an action plan, whether that’s data migration or more complex Artificial Intelligence (AI) solutions.
Another key concern around digital transformation is complexity, with many enterprise leaders worried that they will not be able to maintain their systems after the migration. TM ONE’s team of smart services, cloud and cybersecurity experts guide clients through the entire process, from planning to implementation, and remain on call 24/7 for any challenges.
Speaking on the diversity of customer needs, TM ONE CEO Ahmad Taufek said, “As part of the TM Group, and our role as the enabler Digital Malaysia, we have the capabilities to fully support the enterprise sector. From an infrastructure standpoint, TM ONE is a one-stop centre with our network, software and platform and most importantly full data sovereignty. Moreover, from an advisory perspective, we have the expertise of top solution consultants.”
He went on to say that the announcement of MyDIGITAL – the Digital Economy Blueprint presented “the perfect time for enterprises to kick start their digital transformation journey” and that “TM ONE is ready to serve with our comprehensive suite of digital solutions.
A call to action
2021 comes with its own set of challenges for Malaysia and its economy. But the previous year has abundantly underscored the importance of digital leadership and transformation. TM ONE stands at the ready to support the enterprise sector in this trial by fire – a trial that will lay the groundwork for great things ahead.
March 25, 2021
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Pos Malaysia Group (“the Group”) started as a traditional postal service and has since expanded to provide financial services and supply chain solutions. As reinvention became necessary, Pos Malaysia embarked on a digital transformation plan to redefine its business model.
“The rapid adoption of technology has brought about new challenges to our business. Pos Malaysia knew it must adapt to digitalisation to remain relevant in the industry and to support the changing trend in customer behaviour, from physically going to retail stores to buying goods online,” said Group Chief Executive Officer, Syed Md Najib.
When faced with digital disruption, Pos Malaysia encountered difficulties due to its outdated systems, traditional business model, and a weakening outlook for selected business segments. Legacy systems posed a challenge for the Group when competing with digital-native entrants. Amidst this environment, the company has engaged in notable initiatives to provide consumers with fast and secure delivery, as well as a seamless customer experience. This transformation is crucial for the company to build a sustainable business, one that is relevant in the digital era.
Simplifying the customer journey through digitalisation
In 2019, Pos Malaysia committed to a new mission – to build a truly customer-centric organisation. The Group set out a three-year modernisation and transformation plan to remain relevant, competitive and profitable.
A major transformation area was in the digitalisation of customer-facing functions. Recognising the growth of the digitally-driven consumer, Pos Malaysia revamped its website and enhanced its mobile application to improve customer experience. With over 1.3 million downloads of the mobile app, there was an average of 200,000 monthly users with app-related transactions from January to July 2020.
Handwritten consignment notes have been replaced by the e-consignment note which can be generated via the website or the mobile app. Customers can print the e-consignment note at Pos Laju outlets, kiosks and selected Pos Laju EziDrive-Thru. As of September 2020, there have been 1.5 million e-consignment notes generated – thus reducing errors and enhancing efficiency.
Pos Malaysia’s customers can track their parcel via the Track and Trace system that is available on Pos Malaysia’s website and mobile app. The system allows customers to monitor their parcels via the tracking number or by scanning the bar code.
Pos Laju SendParcel, an online shipping platform, is also integrated into the mobile app and allows customers to post their parcels without having to leave their home or office. Customers only need to schedule for pick-up at their own convenience and Pos Laju will come to collect the parcels. The platform has expanded its service by offering international deliveries to over 200 countries, connecting local SMEs and e-commerce businesses to the overseas market. As at the end of January 2021, over 7 million parcels have been shipped via SendParcel.
Additionally, the implementation of the AskPos chatbot and live chat channels gives customers a self-service option to resolve simple issues. Customers are met through real-time conversations and can obtain personalised help online. Since its inception, over 2.9 million conversations were initiated on AskPos, or about 40,000 to 60,000 customer conversations per week – reducing contact centre operation costs.
E-insurance service is Pos Malaysia’s most recent initiative in providing its customers a better service experience. With e-insurance, motor vehicle insurance renewal is made easy, convenient, and available at any time. Pos Malaysia is planning to add more insurance providers and more insurance products soon, to offer its customers multiple options to suit their requirements.
Moving forward, customers can look forward to more services in Pos Malaysia mobile app which include financing, wasiat, will, remittance and others.
Streamlining and securing processes with digitalisation
While the implementation of e-consignment notes has improved customer experience by reducing over-the-counter wait times and human errors, the self-service parcel lockers (i.e Pos Laju EziBox) has been added to give convenience for customers to collect and drop-off Pos Laju items at their own time.
Pos Malaysia’s customers also have an option to pay their utility bills via the Pos Automated Machines that is available at selected post office. Launched last year, customers can pay their utility bills via cashless methods, at their own convenience and reduces over-the-counter congestion.
Pos Malaysia is also giving solutions to their business customers through Pos Digicert, a subsidiary which is responsible for the creation of digital identities through the use of digital certificates. The Pos Digicert Digital Signing feature is another solution that incorporates digital signatures for the company’s BizClient Ivest server and digital certification services. The option safeguards organisations from data fraud, data tempering, and authenticates documents simultaneously, thus enhancing the trustworthiness of the documents in hand. Organisations can now move from a physical certification environment to one that is digital, validated and secure.
As part of Pos Malaysia’s transition into entering Industrial Revolution 4.0 (IR4.0), the company integrated Robotic Process Automation (RPA) into existing Standard Operating Procedures (SOP) for both front-end and back-end processes of our cargo operations at the Kuala Lumpur International Airport (KLIA).
Pos Aviation, a subsidiary of Pos Malaysia that handles in-flight catering and cargo has implemented Robotic Process Automation (RPA) to assist the cargo handling operations team. These robots act as a digital workforce to streamline operations and expedite key business activities thus ensuring efficiency. The human workforce can focus on more valuable work as the system automates repetitive mundane task and increase productivity that are compounded across thousands of transactions.
Pos Malaysia is also improving its procurement process efficiency as it switches from manual processing to an online procurement system. The end-to-end procurement system, from purchase requests, orders to payments, have benefited from the upgrade. Advantages include an overview of the entire process, reduced leakages, improved documentation storage and better budget monitoring.
Promising speed and digital trust with cloud CDN technology
The benchmark for successful digital transformation lies in the ability to provide swift and reliable service. Digital native entrants, in particular, could press on these attributes with its integrated and flexible platforms compared to larger organisations with multiple, siloed systems. As such, Pos Malaysia had a daunting task in hand – to transform its IT infrastructure and mitigate the disadvantages.
Pos Malaysia integrated cloud CDNs (Content Delivery Networks) to provide swifter service delivery for its websites and applications. These technologies reduce information travel distance and server workloads, resulting in lower latency and faster content delivery. The existing Wide Area Network (WAN) services also support cloud CDNs, providing added protection in the information transformation process.
Moreover, to ensure stability and scalability of its software solutions, the Group has introduced Performance Testing Services in 2019. This step helps Pos Malaysia evaluate its system’s performance under normal and anticipated peak conditions. Consequently, it ensures that end-users do not encounter any performance issues when using the applications. Pos Malaysia customers can now enjoy fast, stable, and secure experiences on digital platforms.
Creating a secure infrastructure enforces digital trust in customers, especially when it concerns sensitive personal customer information. A malware attack in 2019 made the Group take a proactive stance in cybersecurity defence. Pos Malaysia has complemented its cloud adoption with intelligent threat detection systems. These systems safeguard end-users and networks from malware and confidential data breach attacks. The digital transformation plan remains secure due to this vital step, and the company now boasts zero complaints from data breaches.
Hitting ideal processing capacity with automation
Pos Malaysia continues to ensure that it is capable to handle the surge in demand driven by e-commerce growth. As such, the Group continues its pursuit in optimising operational efficiency. With parcel volume reaching 800,000 a day during peak seasons, Pos Malaysia commits to leverage on automation for its distribution and fulfilment centres.
To date, Pos Malaysia has equipped 35 distribution centres with semi-automated sorting systems. These upgrades were crucial in easing the strain on manpower, resulting in greater capabilities and lowered costs. The improved sorting systems were especially beneficial during peak seasons, where deliveries can go up to over 8 million parcels per month, as experienced in the 11.11 online mega-sale. As such, the Group plans to continue this initiative by deploying semi-automated systems across 20 distribution centres this year.
To further supplement the vision of an ideal processing capacity, the Group is also investing in fully-automated and integrated fulfilment centres. Pos Malaysia aims to launch its first regional Mini-Integrated Parcel Centre (IPC) in Senai, Johor, to cater for volume growth, with a target to process a total of 1 million parcels daily.
Driving growth by forging strategic partnerships
To remain competitive in the industry, Pos Malaysia forged strategic partnerships to diversify its revenue stream. The Group’s most recent partnership with Allianz Life Insurance aims to improve life insurance accessibility for all Malaysians. Together, they have launched PosLifeCare, an affordable life insurance plan with a premium from as low as RM0.14 a day.
The Group formed a partnership with CollectCo, a leading parcel delivery and collection network. Through this collaboration, Pos Malaysia secured an additional 1,255 partner outlets. The Group was able to expand its customer reach while achieving financial sustainability through agent and partner-operated outlets.
The main focus for Pos Malaysia at this juncture is to win market share in the fast-growing e-commerce driven courier delivery segment. The investments made by the Group in technology augurs well for the future. Pos Malaysia is well-placed to address the shift in consumer demand for digital services.
July 29, 2021
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Maybank, changing the face of traditional banking
Malayan Banking Berhad (“Maybank Group” or “the Group”) is the largest financial services and banking group in Malaysia. The Group serves its 22 million customers through a robust portfolio of financial products and services, including consumer and corporate banking, treasury activities, insurance, and asset management. These contributed to the Group’s annual revenue of MYR 51 billion in 2020. For the same year, Maybank Group had an operating income of MYR 6.48 billion and was the winner of the world’s best consumer digital bank in Malaysia and Indonesia.
Despite topping local and international market charts with notable digital milestones like QRPay and Maybank Trade, the Group’s M25 plan persists on digitalisation as a key-value driver. The strategy is similar to its Digital Bank of Choice strategy set in 2020. With customers spoilt for choice in today’s market, it is a challenge to reach that pinnacle of customer experience and preserve customer relationships at the same time, especially if a brand doesn’t fully invest in digital roadmaps and collaborations.
“We must always have the user behaviour in mind when we are creating new digital services and/or products. Digital banking providers who provide the best user experience and can solve customers’ problems will continue to be relevant,” said Datuk John Chong, Group CEO of Maybank Community Financial Services.
In this article, you will see Maybank in its journey to improve service delivery capabilities in the era of hyper-digitisation and competition.
Improving the digital banking experience
Maybank takes inspiration from the rapid rise of digital banking and fintech startups in its pursuit to continue enhancing customer experience. The bank’s mission is to provide customers with simple and convenient access to its financial services using ubiquitous digital solutions.
In 2018, the Group revamped the Maybank2U mobile application and website to offer a seamless transacting experience. The mobile application, which now features enhanced payment capabilities and customer personalisation, boasts over 12 million mobile downloads with an impressive 7 million active users (excluding website users) in 2020. New upgrades have allowed customers to generate dynamic PayNow QR codes for on-demand transfers. The mobile app also features a display of remittance options for more transparent overseas fund transfers. Apart from that, other Maybank2U experience-enhancing functions include Scan & Pay, a personal debit and credit spending tracker, and a customisable savings planner.
As the Group recognised the growing importance of digital products and services, it launched MAE (Maybank Anytime, Everyone) by Maybank2U in 2020. This complimentary mobile banking and e-wallet application seamlessly integrate online banking with one’s lifestyle needs. MAE not only allows customers to have full access to their savings accounts, pay bills and transfer funds. It also offers newer fintech solutions such as expenses monitoring, in-app virtual debit cards and ‘Tabung’, an individual and group-goal based saving feature.
Maybank Group received numerous feedbacks from customers with negative experiences from self-service options, such as chatbots and FAQs. Looking to offer a better solution, the Group implemented E-CLEVA, an integrated live video chat solution. With this new capability, insurance claims teams could provide real-time assisted claims support for motor and fire insurances, allowing the bank to process claims digitally and within 15 minutes.
Building operational efficiency with digitalisation
As customers stay at home during the movement control order, Maybank Group saw a significant surge in the number of digital transactions and users on its platforms — zakat payments before the festive period, for example, has increased by 227% year-on-year (Y-o-Y). At the same time, QRPay saw a transaction volume growth of over 650% Y-o-Y. With active mobile users expanding by 34%, Maybank Group had to deploy cutting-edge technologies to maintain its business outcomes at a rapid speed.
The Group placed a heavy focus on automating its back offices, namely to streamline back-end processes by implementing machine learning for processing credit applications, branch operations, remittances and trade services. It reinvented the technology stack to support every layer of banking operation by adopting technologies like robotic process automation (RPA), ICR/OCR (Intelligent or Optical Character Recognition) and application integration for certain ‘open’ operations.
Other digitalising efforts include migrating transactions from branches onto the online payments platform and implementing Artificial Intelligence (AI) in Anomalous Parts Detection for vehicle claims submission. The Group also launched a fully digital Know Your Customer (KYC) capability, enabling a customer to onboard through app-integrated video calls.
Maybank Group measures the success of all digital initiatives through two (2) measures — straight-through processing (STP) rates and customer turnaround times. These measures allow the bank to track and analyse the efficiency of its services, enabling more productive service delivery capabilities across various operations.
Enabling convenient, safe and secure transactions
The rise of digital banking is analogous to a double edge sword — on one end, you have greater convenience at your fingertips. But on the other side, digital vulnerabilities and frauds can now affect us more than ever. Maybank Group mitigates these risks by internalising a robust cybersecurity infrastructure that covers internal governance, human knowledge and network capabilities.
The Group employs a best-of-breed Security Information and Event Management (SIEM) technology that enables continuous real-time monitoring of any internal or external cyberattacks. Coupled with its Regional Security Operations Centre, which centrally manages the operational level of system security, the bank’s security specialists can quickly and continuously detect and respond to malicious activities using the Splunk Enterprise Security platform.
Driven by the surge of digital transactions, Maybank announced in April 2021 that it is discontinuing the SMS TAC (transaction authorisation code) for approving online transactions on both its apps. The bank intends to protect its customers with improved online banking security. Customers will switch to Secure2U as the preferred authorisation method for most transactions, excluding Financial Process Exchange (FPX) and Direct Personnel Expense (DPE). This alternative feature adds an extra layer of protection. Transactions can only be approved within 50 seconds on a registered device using Secure Verification (one-tap authentication) or Secure TAC (a six-digit TAC number generated on the mobile app).
This new ability creates a safer and more conducive way for customers to transact. At the same time, Maybank Group can build a digital ecosystem that enables safe and secure transactions continuously, fostering digital trust with its users.
Accelerating growth through key partnerships
As non-banking institutions with digital banking licenses flood the market, Maybank Group ensures business competitiveness by engaging in strategic partnerships to introduce new products while enhancing existing offerings. The bank focuses on creating close C-level collaborations with technology disruptors to foster customer stickiness by integrating lifestyle propositions with financial services.
At a time where customers are increasingly adopting digital products in their lifestyle, Maybank Group joined hands with the ride-hailing company, Grab, to drive the acceptance and ubiquity of cashless payments further. By integrating the two payment systems, customers of Maybank and Grab can choose between using their GrabPay or Maybank QRPay mobile wallets at the merchants they support. Direct cash top-ups on the GrabPay mobile wallet via Maybank2U enrich the online experience between these two digital apps.
The partnership with Grab doesn’t stop there. Maybank Group unveiled a new dual-faced credit card that enables customers to seamlessly collect GrabRewards points that they can then use to redeem vouchers and other rewards. Aiming to serve younger consumers further, the Group also teamed up with an e-commerce powerhouse, Shopee, to offer a lifestyle and e-commerce credit card. Similarly, users obtain rewards – Shopee Coins which they can spend on future online or offline purchases.
The Group also partnered with various property leaders including, UDA Holdings, Tropicana Corp. and i-City to offer “HouzeKEY”, an alternative home financing solution for first-time home buyers. Another partnership with Permodalan Nasional Berhad (PNB) saw the launch of ASNB e-channels on the bank’s platform. The collaboration enables cross-system transactions and the viewing of account balances via Maybank ATMs or the Maybank2U app.
Maybank is poised to conquer the fast-growing digital banking space with its wide range of digital products and services, seamlessly integrated into a customer’s everyday life. The Group continues to defend and grow key customer markets in the era of digitalisation without losing sight of its core principle; humanising banking.
July 28, 2021
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The COVID-19 pandemic redefined how the financial services industry operates. It also created great momentum for innovations within the industry as consumers increasingly reached out for digital financial solutions. This growth has caused banks around the world to seriously look into Open Banking, a concept that was introduced just a few years ago.
What is Open Banking?
Open banking is undoubtedly a huge leap towards digital transformation for banks globally. To define it, open banking is simply the practice of enabling Third Party Providers (TPPs) to have access to banks’ data through open Application Programming Interfaces (APIs). These TPPs range from e-wallets, microloans, FinTechs and many more.
Application Programming Interfaces (APIs)
Third-Party Providers (TPPs):
How is Open Banking beneficial?
The Open Banking revolution is bringing many new opportunities for innovators to create services and for customers to enjoy these services. The benefits of Open Banking is not just limited to consumers, but it extends to service providers as well.
Benefits to Consumers
Open Banking allows banks to collaborate with FinTechs and businesses from various industries. Data-sharing agreements with FinTechs and other non-financial companies open up the potential to develop new, innovative services as they utilise the vast data available. A more expansive source of data could potentially change the face of more traditional industries such as travel, retailers and insurance.
ii. Enhance the customer-centric approach
Banks gain access to user’s data from other participating financial institutions through Open Banking. This capability gives banks the means to leverage that data and create their integration-based financial offerings. As banks increase their database of customers and curate products accordingly, they are able to strengthen their “customer-centric” approach to business.
Where is Malaysia today in the Open Banking space?
In June 2016, Malaysia’s central bank and principal financial services regulator, Bank Negara Malaysia (BNM), established a Financial Technology Enabler Group (FTEG) to support innovations within the Banking, Financial Services and Insurance (BFSI) sector. The FTEG plays the role of developing new policies and enhancing existing ones related to the adoption of new technologies in the sector.
Consequently, in 2017, FTEG launched a FinTech Regulatory Sandbox framework to test new and applicable technology, including Open Banking.
In March 2018, BNM made their biggest stride yet by establishing an Open API Implementation Group. This was to develop standards and regulations around open data, security, oversight arrangements for TPP, and rights of access. The group was also accountable to review the existing regulations regarding controls on customer information.
As of 2021, BNM is taking a phased approach towards Open Banking; they are cognisant of the security threats and governance measures that would need to come along with it. The central bank is also welcoming additional proposals from the BFSI, FinTech community and any interested parties that would benefit from standardised open APIs.
What does the future hold for Malaysia and Open Banking?
The Nordics in Europe and the UK are at the forefront of building a world-class Open Banking digital ecosystem. These countries have their framework and API standards in place to facilitate the process. They also have a vast digital infrastructure that enables the widespread use of Open Banking.
The global acceleration of Open Banking will be a catalyst towards Open Banking in Malaysia. Malaysia will be able to learn from the best practices of countries around the world and avoid the mistakes that they may have made while adopting Open Banking. With the right governance, regulations and security checks in place, Malaysia will soon follow suit with these leading countries in implementing Open Banking.
Open Banking will also gain traction in the country, thanks to its rapidly advancing FinTech ecosystem. The FinTech community in Malaysia is hungry for innovation and is also open to collaborating with banks to create new products and services. Moreover, Malaysia is home to the most digital natives in Southeast Asia, with 83% in digital consumers. These modern consumers are imperative in ensuring Open Banking is a success.
The increasing prominence of fintech companies alongside the high digital readiness of consumers proves one valid point – Malaysia has an emerging market with a vibrant digital ecosystem; one that is ripe to accept Open Banking. This digital transformation might just be the right enabler that unlocks opportunities in the banking space, ultimately revolutionising banking itself.
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