ASEAN’S biggest worry right now is not its “lofty” goals of full integration of its capital markets but of being left behind in the Fourth Industrial Revolution, said CIMB Group chairman Datuk Seri Nazir Razak.
He said if Asean collectively did not wake up and grab the opportunities that present themselves now, it would be left behind by existing giants such as Amazon and Alibaba.
“If we don’t make the economies of scale work for corporate Asean, then one day we will wake up and be conquered by the likes of the Amazons and Alibaba of the world, and that’s the big picture. That’s why we should call for action now. Not only for capital markets, but for every segment of the economy,” Nazir said at the CIMB Asean Research Institute’s (CARI) Asean Roundtable Series here recently.
He said companies should not shy away from deepening investments into digital technology, as that’s where the world was heading.
“The reason why Alibaba and Amazon are successful is because of the scale of their market, which has about 1.2 billion people. Asean has some 650 million people, but how do we access that economy of scale in Asean?
“We do it by bringing down barriers between Asean countries. The Fourth Industrial Revolution has made it even more imperative for Asean to come together as an economic community. We are proud of what Asean has achieved, but now it is time to scale up our investment into technology so that we won’t be left behind.”
Nazir also highlighted CIMB Group’s initiatives in the financial technology (fintech) front.
In April, it announced the appointment of Olivier Crespin as chief fintech officer for its newly set up unit, CIMB FinTech, a standalone unit that will actively explore new, innovative banking solutions. Its creation is part of the group’s strategy to become a leading Asean bank.
Touching on Crespin’s appointment, group chief executive Tengku Datuk Seri Zafrul Tengku Abdul Aziz said CIMB was prepared to invest significantly in fintech to add value and enhance the customer experience for its 12 million customers across the region.
“I’m confident that Crespin, with his vast experience in this space, will help us do just that,” he said.
Tengku Zafrul said as of the first quarter this year, over 90 per cent of CIMB’s customers’ banking transactions took place online.
In July, its Touch ’n Go unit formed an equity joint venture with Ant Financial Services Group, the parent of Alipay, to provide mobile wallet and related financial services.
The mobile wallet initiative would potentially give these users access to more services on mobile phones.
At the conclusion of the group’s annual general meeting (AGM) in April, Tengku Zafrul said the group would reveal its Vietnam-based digital preposition by the end of the year.
“We have always intended a digital preposition for Vietnam and we are currently in the midst of finalising that digital preposition. We are quite confident that we will able to roll it out within the fourth quarter,” he said.
Also at the same AGM, Nazir called on fintech companies with a good proposition to work with CIMB FinTech.
“If you have a good preposition when it comes to fintech, we want to hear from you. In turn, we will provide you with multiple avenues and scale you might not have access to now.”
When contacted, a banking analyst with Kenanga Investment Bank acknowledges that though CIMB had put a lot of effort into its fintech push, it now needed to push for diversification.
“For the most part, CIMB has only been focusing on the payment side, which is of course relevant to them given that they are a bank,” said the analyst.
“But if they truly do want to be a Malaysian and Asean fintech leader, they need to look beyond payments alone.”
An analyst from MIDF Research concurred. “CIMB is the only bank that has created a fintech-specific unit, underlining their commitment in this space,” said the analyst.
“It’s true that they have mostly focus onto the payment segment for now, but perhaps by having the CIMB FinTech, they will be able to become even more innovative in the future.”
That said, it’s safe to say that at this point in the Fourth Digital Revolution, CIMB Group will not be left behind.