KUALA LUMPUR: Bank Islam Malaysia Bhd aims to grow its mobile banking customer base from the current 900,000 users to two million by 2019.
This is following the bank’s strategic collaboration with US-based global business and technology consulting firm Cognizant to develop financial technology (fintech) products within Bank Islam’s network.
To date, Bank Islam’s digital banking segment accounts for less than 5% of its non-fund based income.
With the collaboration, the bank planned to increase the figure to 10%.
Speaking after the signing ceremony here yesterday, Bank Islam chief executive officer Khairul Kamarudin said the bank expected to roll out at least one fintech product related to retail banking by the second quarter of 2018.
Bank Islam planned to develop fintech products targeted at the retail banking and small and medium enterprise (SME) segments.
“Together with Cognizant, we shall identify suitable fintech products that allow better customer engagement, to be submitted to Bank Negara’s regulatory sandbox,” he said.
Despite Bank Islam’s digitalisation efforts which included introducing a new digital division in its corporate structure, the bank would be maintaining its traditional banking to cater to the population.
Bank Islam will be able to accelerate SME banking by providing business solutions for operational and expansion needs.
The bank will also be able to rapidly tap into the rural, underbanked segments and boost financial inclusion by overcoming cost and physical barriers.
In 2010, Bank Islam launched TAP Mobile Banking-i, an enhanced version of SMS banking, to encourage financial inclusion.
Last year, the TAP Mobile Banking-i platform recorded 500 million transactions.
Khairul said there was no investment cost involved at this juncture in the collaboration with Cognizant and both parties would leverage on each other’s strengths.
Bank Islam will be banking on Cognizant’s experience, credentials as well as its stable of digital assets.
Khairul added that there are various models of partnership that both parties are deliberating on, but it would depend on the type of fintech products that Bank Islam will eventually introduce to the market.
“We will need make investments when the fintech product is rolled out or go on a profit sharing basis with Cognizant.”
Meanwhile, Cognizant Malaysia business leader Effendi Azmi Hashim said that the company was interested in the Islamic banking space in the country.
“We see Malaysia being a leader in this space, and see Bank Islam at the forefront,” said Effendi.