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As we venture into the post COVID-19 world, the financial services sector will be a key driver of economic recovery and growth which brings more traction and potential for digital banking to thrive in Malaysia. As a relatively new entrant to the financial services landscape, digital banking can be seen as either a disruption or a value contributor to the financial system.
In the brunt of the pandemic, a new normal is being redefined as we speak. Customers’ behaviors in both retail and commercial sectors have evolved to be more inclined towards digital banking services.
Digital banks can potentially fill the void that is within our economic environment, by understanding the demographics and needs of customers to be an active platform in the economic lifecycle of the segment it serves.
KPMG’s latest report aims to provide you with the understanding of the dynamics of digital banking, and how, when implemented well, it will raise financial awareness and literacy, and ultimately, bring economic growth to various sectors and segments in Malaysia.
Also included in our report are the insights provided by 1,220 respondents from Malaysia who participated in KPMG’s online survey held from September 2019 to February 2020 to understand customers’ sentiments, preferences and expectations of digital/virtual banks of the future.
Download KPMG’s report “Digital Banking: The inclusive agenda” here.
In a post COVID-19 world, the financial services sector will be a key driver of economic recovery and growth. As a relatively new entrant to the financial services landscape, digital banking can be seen as either a disruption or a value contributor to the financial system. The potential for digital banking in Malaysia was given a boost after Bank Negara Malaysia (BNM)'s announced on 27 December 2019 to issue five digital banking licenses, with financial inclusion as a primary objective, to complement the national agenda of shared prosperity.
What digital banks can offer
A business model that designs its products around customer needs is crucial to establishing a ‘Customer-first’ model to digital banking.
Preferred features of digital banks
| 39% | 23% | 20% | 18% |
| Lifestyle - rewards, loyalty program |
Financial Advisory | Spending Analytics | Recommendations (customised deals and promotions) |
Know your customers
| 77% | 82% | 82% |
| view digital banks as the next evolution in financial services | are already using the internet banking function of their banking service provider | will open a bank account through online platforms as long as they are regulated by Bank Negara Malaysia |
| 79% | 52% | 45% |
| expressed interest to have financing products be made more accessible to them | prefer to perform online application for these financing services | of respondents use e-wallets at least once a week; almost 31% use this channel more than once a week |
The successful digital bank
The key to achieving success in digital banking in Malaysia can be seen in three phases.
- Understand what the customers need in the target segments.
- Play a key role in improving financial literacy and financial inclusion.
- Be an active platform in the economic lifecycle of the segments it serves.
Pre-requisites include:
- Stable and sound infrastructure and network capabilities.
- Network enablement.
Download the infographics.