Banks must embrace technology or risk losing customers, warns Singapore FinTech Consortium co-founder.
KUALA LUMPUR: Banks in Malaysia are beginning to realise that their main competitors are smartphones and apps, rather than other banks.
Singapore FinTech Consortium co-founder Gerben Visser said fresh-faced financial technology start-ups (fintechs) were coming up with new mobile-first services – payments, loans, money transfers, digital currencies – which were threatening to “steal” customers, particularly younger ones, from banks.
Visser warned that if banks did not keep up with the times, they would lose out.
“Fintech will be the Uber, Airbnb and Tripadvsor of the banking industry. It is tech based.
“Malaysian banks have not felt the pinch of losing clients, like the taxi, hotel and travel industries have. It is just a matter of time, unless they buck up in terms of technology,” he told FMT.
Visser was one of the speakers at the International Conference on Financial Crime and Terrorism Financing at the Majestic Hotel. He spoke on Fintech: Facilitate or Disruptive Technology?
He also warned that Malaysian customers would realise that start-ups could offer more relevant services, despite being relatively small.
The biggest problem with banks, Visser noted, was that their core systems were 20 to 30 years old, while Fintech startups offered seamless transactions.
“The younger generation wants Facebook-type solutions. They want to have seamless, elegant and intuitive systems.
“They feel: Why do I have to fill up a form or fax stuff,” he explained.
He, however, said start-ups would not take over the role of commercial banks just yet, as they were relatively new in Malaysia and had not impacted the local banks yet.
“Once Fintech becomes a norm among Malaysian customers, commercial banks will have to keep up in terms of technology
“Banks will either need to buck up on their tech to get the customers back or look for new solutions to find new customers.”
In Malaysia, three Malaysian banks – Malayan Banking, CIMB and RHB – are working with Fintech start-ups.
Interestingly, in August, CIMB closed some branches in Thailand, Indonesia and Malaysia to embrace digital banking.
Banks worldwide, meanwhile, have been reducing their branches while increasing technological features at brick-and-mortar locations to reduce reliance on service staff and push more customers into digital products.