Opportunities for fintechs to grow and thrive abound

The fintech sector in Malaysia is still in its early stage, says Liew.

CONSUMERS are increasingly moving online for their banking needs. And, banks are migrating into the digital space in hot pursuit.

However, established financial institutions are not necessarily going in on their own. Many are tapping into financial technology (fintech) companies to engage their customers in the digital space. This, of course, paves the way for fintech growth in Malaysia.

“Banks want to go online. They want to be able to engage with their customers. But they don’t always understand the best method of engaging customers, and that has always been a challenge in the past.

“But as more people use the Internet to search and apply for products, banks understand that we, being the specialist in this area, are the best people in the market to help them with this. And while they can get the engagement, they don’t have the expertise in converting potential customers into an interested party,” says Liew Ooi Hann, founder and chief financial officer of Saving Plus Sdn Bhd.

Saving Plus runs RinggitPlus.com, a mobile-first comparison website for financial products.

Digital banking is still in the early stages in Malaysia compared with the West, but a recent study by RinggitPlus, backed by research data from Google Malaysia, shows the shift to digital is an accelerating trend. The study also reveals that digital customers interacted with banks 12 times more than non-digital consumers.

One area where Malaysia leads South-East Asia is in the rise of the use of financial comparison sites, with 12% of Malaysians visiting them before making a decision, ahead of Thailand (11%) and Indonesia (1%).

Google Malaysia head of sales, finance and insurance Chuah Jia Wen, notes that the popularity of financial comparison sites shows how keen Malaysians are to shop around to find the best deal in financial products.

Chuah adds that search on financial products in Malaysia has increased 30% year-on-year while mobile searches has increased 68% y-o-y. Credit cards are the most searched for financial product in Malaysia, with the number of searches growing 30% y-o-y.

“All these trends represent a tremendous opportunity for the financial services sector to offer consumers helpful services right when and where they’re looking for them,” she says.

And while banks have online presence, the digital segment is not yet a priority for them, says Chuah, which allows fintechs such as RinggitPlus to fill the gap between consumers and banks in the digital banking space.

“The trend now is moving to online mobile. It is happening. And banks need to engage consumers on this level. So we work with banks and insurance providers to enable easy access for consumers,” says Liew.

Liew explains that Malaysia is still a nascent market for the financially savvy and there are plenty of opportunities for fintechs to grow and thrive.

Having more fintech players in the market will also increase awareness and education on their role in the financial ecosystem. The important thing for fintechs, he adds, is to focus on where they have the most value.

“We see ourselves very much a part of the ecosystem, where we enable the banks to have technology processes in place to acquire these people coming from the digital channel. We see ourselves as complementary to the industry.

“Our point is to educate consumers. Without a final destination, which is the banks, there is nowhere to go. We are not that end destination. So we want to be a place where banks can get consumers and the expertise in acquiring and retaining customers online,” he says. — JOY LEE