Open banking to change financial services in Malaysia: IDC
By Digital News Asia September 10, 2018
- ‘Openness’ has only become a mainstream agenda in the last 18 months for Asean banks
- There is a need to embrace an economy that is pro-trust, not just pro-competition
IDC hosted its annual Financial Innovation Summit at the Intercontinental Hotel Kuala Lumpur, exploring the strategies to drive sustainable transformation in banking and insurance.
The event explored emergent practices in platform-building, value-creation and collaboration. IDC believes that while concepts of ‘openness’ has been discussed for several years, it has only become a mainstream agenda in the last 18 months for Asean banks.
According to IDC, 27% of IT spending to be made by financial services institutions (FSIs) will be entirely ‘new-to- enterprise’, meant to enable capabilities and value propositions never previously explored.
The idea of openness has also extended beyond the traditional purview of product or service delivery and technology acquisition, towards collaborative development, white-labelling and IP-sharing that will ultimately redefine the FSIs role in a collaborative future.
“Industry roles in the financial ecosystem are similarly becoming more fluid than ever – banks and insurers are demonstrating themselves as increasingly capable content or infrastructure partners, subverting the norm of these being the domains of retailers, telcos or vendors. It would seem disruption goes both ways, and FSIs are finally regaining lost ground as innovators after a long spell of disintermediation,” Sui Jon Ho (pic), research manager, IDC Financial Insights.
Sui added, "Ensuring such alternative business models remain robust also means managing competencies within and beyond the walls of the organisation, to create value propositions that are as differentiated as they are relevant."
While the imperative to connect is clear, not all partnerships succeed. Inasmuch as the right tools are required for the right job, suitable partnership models need to be aligned to the appropriate business case.
In this fast-paced digital world, financial institutions need to be bold in their approach to reconfigure existing technological and policy infrastructures, and embrace an economy that is pro-trust, not just pro-competition.
The IDC Financial Services Summit 2018 brought together regional industry leaders and prominent financial experts across Malaysia. The insights offered at this event will help financial services leaders plan their strategy in advance to deliver solutions that meet the challenges of today’s fintech-disrupted market conditions.
Some topics include case studies on connected core and build digital capabilities around human-centric financial services, open API, intelligent automation, and fintech partnership management.