Emerging Technology trends transforming BFSI in Malaysia 

Emerging Technology trends transforming Banking sector in Malaysia

The technology revolution is transforming banking and challenging the way banking businesses work. Emerging technologies such as Digital Banking, blockchain, cloud, data science, AI/ML and others are shaping the future of BFSI in Malaysia. 

Fintech is revolutionizing the dynamics of banking and financial services. Traditional banks are challenged by the increasing competitive landscape, with the rise of new age modern Fintech startups and new technologies. Embracing tech trends in banking including blockchain, cloud, AI/ML and data science is utmost necessity for banks to stay relevant to the growing customer demands. Realizing the need of the hour, and to remain competitive in the global market, the Ministry of Finance and Bank Negara Malaysia, have introduced several initiatives to strengthen the sector, address cyber threats, and remand to the increasing customer expectations.   

As companies try to survive and prosper in a tumultuous macroeconomic environment, this article will examine several significant trends and new technologies that are transforming the financial services and the BFSI sector in Malaysia.  

Also read – Digital Transformation in BFSI: The Key to Survival for Banks in the Evolving Financial Landscape 

Technology trends transforming Future of BFSI: Use Cases and applications

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1. Open API

Malaysia is taking baby steps in adopting to the benefits of Open API in Banking as a method to expand financial offerings and take advantage of modern services by technology aided Fintech firms. By embracing Open API, banks can take benefits of the advanced fintech solutions, to form an ecosystem that benefits banks, fintech firms as well as customers. Banks can provide personalized financial advice, seamless payment processing, improve loan processing, enhance security and many more all in single platform. Capabilities of Open banking APIs enables banking firms such as investment banks, corporate banks, etc., to access real-time visibility into financial data and offer customers with better services.

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2. Blockchain Technology

 Blockchain technology is revolutionizing banking by opening numerous possibilities that aid in improving banking operations, enhancing efficiency, reducing costs, and fostering trust among stakeholders. Its decentralized and immutable ledger ensures secure and transparent transactions, facilitating efficient cross-border payments and reducing reliance on intermediaries. In trade finance and supply chain management, blockchain automates tasks like letter of credit issuance and invoice financing, enhancing transparency and accelerating transactions.  

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3. Data Analytics and AI 

The field of data analytics and AI is booming. Through the adoption of data analytics, banks have gained the ability to comprehensively understand customer behavior and requirements, enabling them to deliver more tailored and relevant services. By integrating the capabilities of AI, banks can offer on-time support, automate operation processes, offer hyper-personalized experience, prevent fraudulent and do much more. With the introduction of powerful AI tool, ChatGPT, possibilities in offering enhanced customer experiences in banking is like never before. This ongoing trend is expected to further advance and reach unprecedented levels in the future. 

“According to Conor McNamara, Managing Director for AWS in ASEAN, more businesses will likely use cloud-based data and analytics in 2023 to gain market insights and create seamless, customized consumer experiences” (sc: TechWire Asia). 

BFSI in Malayisa

4. Low-code Technology

While digital transformation in BFSI is the key to survival, shifting from legacy to digital is fairly complex, considering compliance and safety concerns in Banking. This is accelerating the necessity of low-code no-code approach. Banking & financial institutes are in look for Banking Software Solutions companies offering legacy modernization that enables automation and digitization without requiring complex development or coding skill sets and time. This shift to low-code technology adoption will result in shorter time to market for the products and services, and also offer modern scalable banking solutions. 

BFSI in Malaysia

5. Digital Banking

Transition to digital banking is disrupting traditional banking methods. With digital banking apps allowing them to transact, track, check balance and avail other financial services conveniently in a tap, there is a paradigm shift of consumers to online. The growing adoption is likely to lead to the closure of physical banks and make way for neo banks. And not just banks, the shift will transition the way businesses work and shift from brick-to-motor to online by integrating with online payment gateway to enable online payment services. 

BFSI in Malaysia

6. Fintech Disruption

Fintech disruption has shaken up the traditional banking industry. Fintech firms leverage technologies such as artificial intelligence, blockchain, and big data analytics to offer improved customer experiences, faster transactions, and personalized financial solutions. As fintech continues to disrupt the industry, collaboration between established BFSI players and fintech startups is becoming more common to combine strengths and deliver enhanced services. 

BFSI in Malaysia

7. Cybersecurity & Regulatory Challenges 

Cybersecurity & Regulatory compliance is a major concern for the BFSI industry in Malaysia. With the increasing digitization of financial services, cybersecurity becomes paramount. Regulatory frameworks must keep pace to address emerging risks and ensure consumer protection. BFSI institutions need robust security system to protect customer data, financial transactions, and sensitive information from cyber threats. Investments in cybersecurity technologies and reg-tech solutions, such as encryption, biometrics, image processors and behavior analytics, will continue to grow to ensure trust and safeguard against potential risks.  

BFSI in Malaysia

8. Cloud Adoption 

Cloud adoption in banking industry has been steadily increasing over the past few years. With its capabilities in cost savings, scalability, agility, enhanced security, improved collaboration and innovation cloud technology is banks to move ahead with the changing landscapes and increasing competition. The Hybrid cloud approach allows banks to leverage the benefits of public cloud services while maintaining control over sensitive data and applications in a private cloud or on-premises infrastructure. 

Conclusion

The future of BFSI in the digital age is marked by a number of trends, including increased digitization, fintech disruption, data-driven decision-making, enhanced customer experiences, and a shift towards agile, tech-savvy operations. To succeed in this landscape, financial institutions will need to embrace digital transformation, adapt to changing customer expectations, and leverage tech trends in banking to deliver innovative and secure financial services.    

Although the trends are on the mark for change, what is even more challenging legacy system integration, data privacy concerns and vendor selection. With proper planning, collaboration with experienced banking solution providers, and adherence to industry best practices, banks can successfully adopt and leverage cloud computing to enhance their operations, improve customer experience, and drive innovation in the financial sector. 

Ascertain Technologies offers Banking products, solutions and service and has been serving the BFSI for more than 15 years. Our proven solutions are creating an impact and winning customer confidence with each implementation. Trusted by premium and global renowned banks in Asia-pacific Region, we are optimizing digital transformation in BFSI sector, enabling businesses to optimize growth digitally and creating a sustainable tomorrow with innovative and proven solutions that are making an impact and change.  

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