Digital banking maturity

Taking a quick recap of the year 2020, we can all agree that COVID-19 fast-tracked the digital evolution and brought on a number of unique challenges for banks. The pandemic saw the need for us to deal with many situations such as social lockdowns, remote working, loan defaults, need for interest reductions, and the various SME stimulus packages.

Based on Deloitte’s digital maturity assessment (where more than 250 banks across the world took part), the pandemic saw banks adopting the functionalities such as increasing the limit of contactless payments, Electronic Know your Client (EKYC) solutions, and full digital onboarding experience. Similarly in Malaysia, such patterns were also found and adopted.
“Where digital maturity is concerned, it is not about achieving it by offering new products or value added services. It is about having the right balance between innovation, and risk management and security,” said Justin Ong, Malaysia Innovation and Regulatory Leader of Deloitte Malaysia.

The key insights we have on digital bank maturity are the difference in strategies adopted by digital champions vs digital latecomers, and the range of value-added services offered by banks to customers with compelling user-experience. Digital champions is an exemplary model in this comparison because they set digital trends and have leading market practices.

Along the customer journey, champions lead the way especially in expanding relationship, customer onboarding, and mobile as an important channel, with products and personal financial management as the key investment priority.

Based on the prevailing scenario, banks in Malaysia should ask the following questions this year: 

• What innovative banking products and services should banks be supplying beyond core products like deposits and lending?
• What partners and ecosystems should banks engaging with to provide products and services beyond traditional banking?
• How can we provide customers with the ability to manage their products and increase loyalty?
• What level of personalisation is appropriate for our customers and their immediate needs?
• How can we further enhance the customer service experience?
• The biggest question for 2021: How do we leverage on emerging technologies, potentially for Open Banking, AI etc.?
• What will be the right cybersecurity strategy?

“..Also, with the new digital bank licence that are planned in Malaysia, the competition for digital bank services will be even more intense in the future – this will be an interesting space to watch how the incumbent banks respond”, said Gopal Kiran, Financial Services, Risk Advisory Director of Deloitte Malaysia.

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