- Shift to digital can’t come sooner as more millennials make up the population in Malaysia
- Bank Negara’s adoption of Open API is a step in the right direction for fintech integration
IN OUR fast-moving digital world, financial institutions need to keep up with the pace of advancement in technology and changing customer base. However, local banks have been moving at a glacial pace in expediting their move to digital according to Vipin Kalra (pic), chief executive officer of BankBazaar International.
The company runs Bbazaar, an online financial product comparison service that was launched its operations in Malaysia in March 2018. The online portal provides an end-to-end service from searching and claims to even be able to take customers through the application process with a bank of their choice.
Vipin is of the opinion that between local and international banks, the former have been slower in enacting their digital transformation strategy and remain operating on a paper-based model.
“Banks have been reluctant to move forward given that 60% of the population in Malaysia are millennials, a segment that is notoriously digitally savvy,” he said.
“There are already some glaring facts that banks should move into digital. The writing is on the wall. Why waste time and not move with the flow? Follow where the customers are going,” he advised.
However, he does understand the dilemma long-established local banks are facing. Over the years, they have invested a lot in their physical branches and relationship business. It is not something that they can simply do away with.
He believes that local banks should set a goal for themselves to double their digital footprint every year. “It is not about getting rid of their physical channels but shifting the focus to where the customer finds it most convenient to interact with the bank and that is via digital platforms.”
That being said, it is not just about moving to digital as regulators like Bank Negara Malaysia (BNM) also need to quicken the process of having the entire industry move towards fintech adoption.
Thus far, BNM seems to be moving in this direction as it is open to the adoption of Application Programming Interface (APIs).
This spells good news for players like Bbazaar as with open APIs, banks would be able to facilitate money transfers through more convenient and accessible third-party applications without logging onto an online bank account or obtain bank account information and enable an individual’s access to a wide range of financial solutions from alternative providers.
While the move is welcomed by Bbazaar, Vipin believes that more can be done to quicken the pace of fintech adoption in the country.
In his dealings with local banks, he found that there needs to be a standardised certification process so that fintechs like Bbazaar can integrate with banks more easily without having to go through multiple rounds of certification.
Looking beyond Malaysia
Bbazaar claims to have one million unique visitors since the website went live while partnering with banks like Standard Chartered, Alliance and Citibank. So what is next for them?
Vipin believes there is much to do as the company looks to open up its financial product line, expanding it beyond offering credit card comparison and personal loans but towards insurance and even investment products in the future.
“We have ambitious plans but we are not in a hurry. We do not want to compete in terms of marketing but have a long-term goal of building a sustainable business,” he said.
Indeed, Vipin does have high goals as he hopes that Malaysia will hit the mark Bbazaar has made in Singapore within just one year as compared to two in Singapore.
“Malaysia remains a promising and interesting market. It is definitely bigger and the potential for upside is there are banks are not matured yet. Also, there is more demand from consumers to do more things online,” he said.
As it is the case with fintech players approaching Asean, Malaysia will be the test bed for its formula in the region before it looks to markets in Indonesia, Thailand, Vietnam and the Philippines in the near future.