Digital Banking today

Digitisation is happening all around us, from online streaming of movies and TV shows to high- speed internet access. In this era of smartphones and tablets that dominate the lives of our gen Y and gen Z population, the trend towards widespread use of smart devices for banking transactions is clear. Correspondingly, the number of visits by bank customers to the branches and those making service hotline calls have been diminishing.

We are, after all, entering a different phase of service delivery where the focus is on “omnichannels” that will serve customers more effeciently and smoothly. Techological innovations on digitisation through new channels and platforms are happening rapidly. Digital disruption that started in the US and Europe has spread across the globe. The advent of e-wallets and the engagment by financial service firms with customers using social media are but two examples of disruption that traditional banking has to address. Given the gamut of developments on digital communication and connectivity, the concept of digitisation in banking, usually referred to as “digital banking”, has evolved in a manner that, not surprisingly, has caused confusion as to its meaning. In this paper, we define digital banking to simply mean internet banking and mobile banking which are by far, the two most conspicuous, voluminous and wide spread manifestation of digital banking.

Given that digital banking in Malaysia, as a middle income economy, is lagging, banks here are at the threshold of growing their businesses by leaps and bounds if only they would seize the opportunities available. With well proven technology used succesfully by telcos and fintechs plus a wealth of intelligence data on consumer behaviour, banks would be remiss not to redirect their resources to digital banking and capture a bigger share of a potentially fast growing market.