KUALA LUMPUR: More than half of Asia-Pacific banks, including those in Malaysia, expect to become digitally mature or digital leaders by 2020, according to the EY Global Banking Outlook 2018.
The survey of senior executives at 221 banking institutions across Asia-Pacific, Europe, North America and emerging markets found that just four per cent of banks across developed markets in Asia-Pacific currently view themselves as being digitally mature or digital leaders.
Ernst & Young Advisory Services Sdn Bhd partner and Malaysia Financial Services Banking & Capital Markets advisory leader Shankar Kanabiran said in Malaysia, 66 per cent of banks surveyed aim to reach digital maturity by 2020, echoing similar aspirations to other markets in the region and the world.
“All of them are focussed on investing in technology in the coming three years in line with their growth strategies and in order to generate cost savings and operating efficiencies.
“Over 50 per cent of the banks in Malaysia are also likely to set up partnerships or joint ventures in core markets this year,” he said in a statement.
All of the banks surveyed in Malaysia have similarly identified recruiting, developing and retaining talent as one of the top priorities, with digitalisation and other market demands pushing for new or upgraded skills from the workforce, he added.
Partner and Malaysia Leader for Financial Accounting Advisory Services (FAAS) Chan Hooi Lam said IFRS 9 or MFRS 9 Financial Instruments has been effective in Malaysia since January 2018.
“With much more reliable and auditable credit information made available under MFRS 9, it will be critical for banks to improve their digital and technological capabilities to ensure accurate and efficient financial reporting, as well as to take advantage of the available analytics now made possible.”
EY Global Banking and Capital Markets deputy sector leader Jan Bellens said Asia-Pacific has a much higher penetration of digital and mobile technology adoption than many other regions.
“Mainland China, for example, has the highest rate of FinTech adoption in the world and many of the big cities there are effectively operating as cashless environments.
“Compare this with the US, where cheques are still prevalent and the relative benchmarks for financial digital maturity look quite different,” he said.
“Regardless, there is an obvious recognition among Asia-Pacific banks of the urgency of embracing digitalisation, with 60 per cent in the developed and 57 per cent in the emerging Asia-Pacific markets aspiring to reach digital maturity by 2020, almost on par with the global average of 62 per cent,” he added.