Banks willing to work with fintech companies

PETALING JAYA: Financial technology (fintech) companies pose a threat to traditional banking organisations but also present an opportunity for the incumbents to collaborate with the startups.
AmBank Group CEO Datuk Sulaiman Mohd Tahir said although fintech companies are delivering new and potentially disruptive technologies, there are greater benefits from working with them than competing against them.
“There are certainly opportunities for collaboration with fintech companies,” he told SunBiz recently.
Instead of purely regarding fintech companies as a threat, he said, AmBank is exploring opportunities to collaborate with fintech companies to offer new and differentiated financial products and services especially in areas related to its strategic objectives.
Sulaiman disclosed that AmBank is currently evolving its digital and IT strategy to offer more bank products and services through partnership with fintech companies in a secure manner.
He noted that as part of its plans to stay ahead of the innovation game, AmBank has embedded digital banking and innovation as one of the key agendas in its business strategy. 
Meanwhile, RHB group chief operations officer Rohan Krishnalingam believes that the fintech revolution is still in its early stages in Malaysia but expects that there will be significant innovation to come in areas such as lending, payments, wealth management and customer engagement, where many fintech start-ups are developing applications.
“The innovations by the fintechs could be seen both as a threat but also an opportunity for us to collaborate,” he said.
Rohan said to stay ahead of the innovation game, RHB will need to execute its digital strategy well, collaborate with its technology partners as well as the fintech community and constantly engage with its customers to develop digital products and services that meets their needs.
“ We do believe that if banks have a clear digital strategy and execute well, they will be much better prepared to the risk of being dis-intermediated,” Rohan said.
He said that RHB has defined clear plans to develop a series of digital capabilities over the next two-to-three years so that it can be more nimble and agile in deploying new services and offering in the digital space.
Secondly, RHB has also started its fintech accelerator program which provides the bank an opportunity to work with fintech startups from early on to manage the disruption.
Thirdly, he said, RHB have established a dedicated ‘Digital Center of Excellence’ within the bank to keep abreast with new developments and execute its digital strategy.
Realising the impact of the fintech revolution to its business, Rohan said RHB has been involved in the fintech community to create an ecosystem that is a win-win for all parties.
However, he did note that since fintech companies are often early in their stage of evolution and product maturity, this could lead to a longer turn-around time to mature their product offering and higher risk in execution.
“This is however the norm when engaging with fintech start-ups and to mitigate this, RHB plays the mentor role in addition to being their partner for collaboration,” he said.
RHB recently collaborated with Startupbootcamp, to bring the global fintech accelerator program to Malaysia.
“ To date we have engaged with many fintech start-ups in the region,” he said.
The fintech revolution is taking the global banking space by storm. It is mushrooming at a pace that has made banks and regulators to sit up and take notice. This has prompted a call for a common platform to ensure that the fintech startups are properly regulated much like banks.
Recently, Bank Negara Malaysia (BNM) established a Financial Technology Enabler Group (FTEG) to formulate and enhance regulatory policies to facilitate the adoption of technological innovations in the Malaysian financial services industry.
The FTEG would also serve as the bank’s dedicated contact point for fintech related queries, including on regulatory matters related to the adoption of fintech in the financial services industry.
BNM’s new governor Datuk Muhammad Ibrahim said last month that the bank would roll out the fintech framework by July.