Fintech activity at the forefront in 2018

KUALA LUMPUR: Very much like 2017, the financial landscape in 2018 is dominated by banks’ further push into digitisation, otherwise known as financial technology (fintech).

This was demonstrated further by a report by accounting firm the EY Global Banking Report which noted that 66 per cent of Malaysian banks surveyed aim to reach digital maturity by 2020, echoing similar aspirations to other markets in the region and the world.

The report noted that Malaysian banks were very much focused on investing in technology from now to 2020 in line with their growth strategies and in order to generate cost savings and operating efficiencies.

Locally, Malayan Banking Bhd in particular has been aggressive in its push into digitalisation.

The group is ending the year with a tie-up with Permodalan Nasional Bhd (PNB) where customers can perform Amanah Saham Nasional Bhd (ASNB) transactions through the bank’s platforms in the next one year, with the introduction of two new online services.

The first is the availability of investing in ASNB units via the online banking portal Maybank2u in real time, while the second is investing in ASNB via automated teller machines (ATMs), also available in real time.

Malaysia also saw the launch of DuitNow sometimes in October, an initiative by Bank Negara Malaysia. It allows an individual to send money instantly to mobile numbers, myKad numbers or business registration numbers.

The initiative is in line with Bank Negara’s goal of making Malaysia a cashless society. The early adopters of the initiave included Maybank, RHB Group and AmBank Group.

It is envisioned that the service would eventually be made available on internet and mobile channels of 44 banks in Malaysia as well as e-money apps.

Artificial Intelligence (AI) offerings, in the form of chatbots functionalities have also made an appearance within the local banking space.

RHB launched an AI-powered real-time messenger platform to streamline the credit card application process while Hong Leong Bank Bhd introduced a virtual assistant named HALI, to help it improve operations efficiency by 60 per cent over the course of the year.

CIMB Group had already rolled out its AI in the form of CIMB Enhanced Virtual Assistant (CIMB EVA) in 2017.

Speaking of CIMB, the bank had allegedly suffered a cyber attack earlier this month.

Although CIMB denied any cyber attacks, it had implemented Google’s reCAPTCHA service on its online banking portal’s login page also within the same weekend of the alleged attack.

Maybank president and group chief executive officer Datuk Abdul Farid Alias commented on the dire need to continue strengthen cyber security in financial institutions.

“Cyber security is a continuous effort because cyber criminals are very sophisticated. We spend a lot of time strategising on the best way to minimise this risk and our digital platform Maybank2U has so far been good and we hope that it will continue that way,” Abdul Farid was quoted as saying.

Financial institutions push into digitisation has also lead to reduced headcounts.

According to the latest Monster Employment Index (MEI), online hiring activity in the Banking, Financial Services and Insurance (BFSI) industry has fallen 12 per cent year-on-year since January 2018.

“Online hiring in the BFSI industry in Malaysia has been on an 11-month decline since the start of the year. According to research houses, macro policy uncertainty post-GE14 seems to be having a slight dampening effect on the banking’s sector growth, and analysts also expects the sector’s core earnings growth to come in lower this year,” said Abhijeet Mukherjee, chief executive officer of Monster.com – APAC and Middle East, in a statement.

“The finance sector was once driven by human judgment and decision-making, but this is slowly changing with emerging technology, in particular intelligent automation. As the needs of banks change, they will sharpen their focus to recruiting people with specific technology expertise.”

The fall in recruitment is in line with most banks policy in either shutting down its brick and mortar branches, or maintaining the branches with less staff.

Source: NST