Malaysia’s financial ecosystem is gearing up for greater growth, enabled by the country’s accelerated digital pivot during the course of the pandemic, however, organizations need to build a secure digital foundation to unlock the full potential of the industry, according to VMware, Inc. The VMware Digital Frontiers 3.0 Study found that the customer battleground for Malaysia’s financial services industry has shifted online with 55% of Malaysians surveyed now preferring to engage with their banks via apps rather than visiting in-person at a branch, leading ahead of its Southeast Asian counterparts Singapore (51%), and Indonesia (53%), on par with the Philippines (55%), but slightly behind Thailand (72%).
Furthermore, the study revealed that two-thirds (66%) of Malaysians surveyed are happy to interact digitally with financial services firms and 56% of respondents are excited for the digital services provided by the financial services firms. This is a clear call-out for financial services firms to harness frontier technologies to deliver superior digital offerings and consumer experiences as more than half (59%) of consumers surveyed will switch to another brand if their digital experiences do not live up to expectations.
Malaysia’s financial services organizations seem to have found what makes consumers tick. While 59% of those surveyed felt that they have delivered better digital experiences in the past year, as compared to retail, healthcare, government and education organizations, it is still vital for financial services organizations to rethink their core processes and operations that will empower superior digital experiences for their consumers: high level of security and protection of data (60%), ease of use across all devices (48%) and faster speed of service (43%).
“COVID-19 has permanently transformed the consumer landscape in Malaysia. To drive successful transformation, financial services organizations must create a trusted digital foundation so as to leverage cutting-edge frontier technologies such as Cloud to accelerate innovations and deliver digital experiences that will excite Malaysians. This way we can establish a viable ecosystem that is also financially inclusive for all, and bolster Malaysia’s growth as we steer and move faster towards our vision of becoming the Heart of Digital ASEAN,” said Devan Parinpanayagam, Country Manager, VMware Malaysia.
“As Malaysia primes the ground for digital banks, this will be an opportune time for financial services firms to harness next-generation technologies such as Cloud, and shape new direction and growth for the industry,” added Parinpanayagam. “With trust and customer-led digital experiences emerging as the key drivers for growth, VMware will remain committed as a trusted partner in enabling Malaysia’s financial services firms with digital innovations so they can respond, adapt and accelerate businesses’ growth, as well as build a more cohesive and inclusive ecosystem.”
Shaping Malaysia’s future of digital banking
The past year has resulted in consumers in Malaysia gaining a better fundamental understanding of the value of digital products and services, with 60% of respondents stating that digital engagements with financial services organizations have freed up their time to focus on other priorities. Malaysian consumers are also embracing newer technologies more than ever before, with 57% of those surveyed expressing their trust in artificial intelligence and more than one-third (35%) saying they would allow an app to help make investment decisions over an individual that works for the bank.
As Malaysia accelerates towards the digital future ahead, digital engagement models will continue to be readily embraced within the nation’s financial ecosystem as demonstrated in the study where it was found that Malaysians are relying on their smart devices more, with 63% of respondents stating that their mobile phones are now more important than their wallets when conducting financial transactions.
Technologies of the future show promise, but security and trust are still foremost concerns
Malaysian consumers continue to show their readiness in embracing next-generation technologies with 64% of surveyed consumers expressing trust in 5G and facial recognition (61%). Consumers are also idealistic about the significance of digital experiences, with more than one-third (40%) of respondents believing that 5G can make banks more efficient, for example, enabling them to process applications credit checks faster.
With more than half (56%) of Malaysian consumers surveyed becoming comfortable with financial services organizations having access to completely accurate data about their daily lives, trust has become a pertinent topic that financial services organizations need to address with 80% of consumers surveyed expressing that security is the number one priority for them when it comes to choosing a financial services provider. While more than half (59%) of Malaysians surveyed trust financial services firms to secure their personal data and information, there is plenty of room for improvement for financial services organizations to not only deliver superior digital consumer experiences, but also secure digital experiences that will not compromise consumers’ privacy.
Growing demands for an ethical and inclusive financial ecosystem
Malaysia’s journey towards carving its position as the Heart of Digital ASEAN has shown tremendous results with 79% of surveyed consumers defining themselves as “digitally curious” or “digital explorers.” However, Malaysians’ appetite for digital consumer experiences spans beyond their choice of financial service providers as digital inclusion comes into the spotlight. Six in ten Malaysian consumers (60%) would consider using more digital services in an effort to reduce their carbon footprint. Additionally, with regard to the financial services industry, 83% of respondents also believe technology will advance financial inclusion within the next decade.
Technology key to accelerating economic growth and recovery
Progressing into 2021, VMware outlines key priorities that will further strengthen the transformation of Malaysia’s innovation-led financial ecosystem:
- Empowering financial services organizations to build a multi-cloud and app future: Unlocking multi-cloud future with app-driven innovations in a consistent and more secure environment that enables continuous innovation
- Enabling innovation and productivity for a distributed workforce: Future ready workforce solutions will enable a seamless and more secure digital employee experience, driving greater outcomes in the new world of work
- Intrinsic security for uninterrupted innovation: An intrinsic approach to enterprise security will provide an additional layer of robust protection for mission-critical operations and infrastructures to fast-track business innovation and resilience
22 July 2021