MALAYSIAN banks are steadily embracing digitalisation and are expected to focus more on investment in technology for the next three years to ensure further growth.
A study by Ernst & Young (EY) on Global Banking Outlook 2018 revealed that 66% of the research respondents target to reach digital maturity by 2020.
EY Advisory Services Sdn Bhd partner and Malaysia Financial Services Banking and Capital Markets advisory leader Shankar Kanabiran said banks are focused 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% of banks in Malaysia are also likely to set up partnerships or joint ventures (JVs) in core markets this year,” he said.
Shankar said all of the banks are making technology investment in the coming three years a priority to generate cost savings and operating efficiencies.
“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 said.
Financial Accounting Advisory Services partner and Malaysia leader Chan Hooi Lam said since Jan 1 this year, International Financial Reporting Standards 9 or Malaysian Financial Reporting Standards 9 (MFRS 9) financial instruments have been made effective, making the digital move an urgent step for banks.
“With 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,” he said.
The study showed that among Asia-Pacific banks, 60% are in the developed markets while 57% in the emerging markets, and the institutions aspire to reach digital maturity by 2020.
Of the total, 75% of banks in the developed Asia-Pacific markets plan to set up new partnerships in their core markets this year, while 82% of the banks are focused on developing financial technology partnerships, customer reach and risk management investments.
Half of the respondents in the emerging markets also plan to set up new partnerships or JVs in their core markets this year, while all of them listed in the digital transformation programme set increasing efficiencies through technology and cybersecurity enhancement as their priorities.
The study by EY Global Ltd also stated that 85% of banks globally cite digital transformation programme implementation as their priority for 2018, putting much investment in technology and risk management.
A total of 221 banking professionals across the globe were surveyed between November and December 2017 to provide banks’ review of reported financial performance, strategic priorities and technology adoption over the next 12 to 36 months. The respondents are from 29 different markets.
Source by : themalaysianreserve.com
Author by : Nur Haziqah A Malek