KUALA LUMPUR: Malaysian consumers willing to allow banks to share data for Open Banking-based services – but privacy objections must be overcome for wide adoption.
New research from Unisys Corporation into Malaysia’s banking industry revealed that domestic consumers are willing to embrace new bank services based on emerging technologies such as artificial intelligence (AI) and machine learning.
The research noted that consumers are also willing to support data sharing in an Open Banking environment, but only if privacy and security concerns are addressed.
Unisys APAC Banking Insights – Banking on the CX Factor is a study about the attitudes of banking customers in Malaysia, Australia, Hong Kong, the Philippines and Taiwan.
This year's report studied how consumers feel about banks using AI to assess eligibility for credit cards and home loans, as well as sentiment toward banks sharing data with non-bank entities to offer new services - known as Open Banking.
The research highlighted that the top annoyance for Malaysian bank customers is long queues, cited by 47 percent of respondents – the second highest of the five countries surveyed, behind the Philippines.
“Twenty percent of Malaysians are annoyed by having to repeat themselves. Only 12 percent are annoyed by being unable to complete an ‘online’ service online.”
Unisys Asia Pacific, vice president financial services, Richard Parker said there was a huge opportunity for Malaysian banks to move more customer interactions to digital channels, including mobile.
“Malaysians are keen to use digital services but they seek a seamless omnichannel relationship so that they can start a transaction in one place and pick it up in another without having to start over,” he said in a statement today.
Parker added AI and machine learning technologies can be used to help banks deliver targeted and relevant online services across all channels to relieving pressure on the branches.
The survey also indicated that Malaysian bank customers have a strong appetite for tech innovations to enable digital bank services – depending on the type of transaction.
It said 52 percent of Malaysian consumers are comfortable with their bank using software and algorithms to assess online credit card applications.
While only 39 percent are willing to use this for home loans it is the second highest level of willingness of the five countries surveyed, behind the Philippines.
“There is a great opportunity for Malaysia's banks to use smart software to lead decision making for commodity products such as credit cards.
“Consumers are less willing to use this for life events such as home loan applications which involve larger financial amounts and emotional involvement – but Malaysian consumers are poised to lead this adoption in Asia Pacific, said Parker.
Open Banking is a growing initiative in the financial services sector that allows banks to share data with other organisations in order to offer new services to customers and new revenue streams for the banks.
The research showed that 40 percent of Malaysians support their bank sharing their personal data with other companies to access financial products, the second highest support in Asia Pacific.
However, almost as many, 38 per cent don't support it, citing concerns about privacy and security, citing that Malaysia recorded the highest level of desire to keep personal information private.
“For Open Banking to take off in Asia, banks must address customer concerns about how they protect customer data - not just in the bank, but across all of the departments, partners and agencies in the value chain.
“Doing business in the 21st century requires dynamic software that adapts to business trends and evolves with security concerns. Unisys' Retail Banking Delivery platform, Elevate(TM), is secured with Unisys' Stealth, an identity-based microsegmentation security software that allows banks to microsegment and conceal critical assets and establish encrypted channels for secure user, application and system communication,” said Parker.