MACRO TRENDS RESHAPING BANKING INDUSTRY DYNAMICS - MAYBANK CEO

KUALA LUMPUR, Jan 24 -- Macro trends is reshaping banking industry dynamics and as the environment changes very rapidly, there is a need for the industry to be agile to adjust to the changes.

Malayan Banking Bhd (Maybank) group president and chief executive officer Datuk Seri Abdul Farid Alias said the industry was faced with a downward trend of interest rate since the global financial crisis in 2008 and now with the effect of the pandemic and pro growth policy, banks were expected to support economic recovery.

“The banking industry therefore still experienced compressed interest margin although it may change soon as the inflationary rate is rising. 

“But for the meantime, banks need to diversify revenue stream, to balance the mix of  interest income and fee-based income,” he said during a tech talk session at the virtual MyFintech Week 2022 today themed Towards a Renewed Financial Landscape.

He also noted that on the geopolitical decoupling front, the world continued to see the rise of China as an economic and technology super power challenging the status quo.

With US-China tension expected to continue, he said the market saw an increase in foreign direct investment in ASEAN-6 as companies shifted to diversify their products and supply chain.

“This would have a future impact on global demand, international trade and investment and geopolitical dynamics,” he said.

On another note, he said the rise in digital economy is also changing the financial landscape with ASEAN becoming the fastest-growing Internet economy of the world which saw 60 million new digital consumers since the pandemic, led by Thailand and the Philippines.

“About 80 per cent of ASEAN Internet users are digital consumers on e-commerce, travel, media, transport and food platform driving the region digital online spending growth by 49 per cent in 2021 to US$274 billion.

“Therefore, companies now are changing shape as they transform to stay relevant to adopt hybrid working environment. We saw a boom in digital players, using new business model and can only expect more innovation and disruption moving forward.

“We are living in a world more complex now, where change happened more quickly and, at the same time, noisily. Some would succeed and many would fail and we just do not know which one will yet,” he said.

At Maybank, Abdul Farid said the bank was lucky as the predecessors had laid a strong foundation in adopting new technology, more than 20 years ago driven by the ambition of making banking accessible to all with their computerisation initiatives, phone banking and maybank2u apps.

He also noted that technological disruption in the banking industry had motivated Maybank to drive for professional efficiency, customer centricity and customer acquisition .

“As a bank, our assignment is to make use of technological advancement in optimising our operation and deepening and expanding our reach.

“I believed we all have a role to play in helping the economy and community to progress. Technology can help all of us to do a better job in reducing poverty and income inequality and protecting the environment and communities .

“Technology allow us to do what we thought we could not do before,” he added.

-- BERNAMA