Heading the revolution towards going cashless


PETALING JAYA: Technology has always played a significant role in financial services, although that role has been one of support.

Today, however, especially due in part to the pandemic, which have brought powerful economies to their knees, many industries and governments have turned to the one thing that would help them weather the uncertainties ahead and that is cashless transactions.

As part of the effort to educate people and to pivot businesses of all sizes towards more digitalisation, Star Media Group organised a digital financing conference on June 22 and 23 entitled “Digital Financing: Powering a Ca$hless Economy”, as part of the group’s #digitalXdata 2021 Road to Malaysia 5.0 event series.

The two-day event also commemorated the group’s 50th anniversary, which includes its efforts towards enabling digitally-powered businesses to accelerate growth in the nation’s digital economy.

It is also aimed at driving innovative change among the society in building human-centred nations powered by disruptive technologies.

The conference was headed by multinational thought leaders, business decision-makers, industry experts, and subject gurus, who shared and discussed on how to shape a cashless economy and power a cashless society.Opening Keynote: Shaping a Ca$hless Economy by Niloy BanerjeeOpening Keynote: Shaping a Ca$hless Economy by Niloy Banerjee

The event was opened by United Nations Development Programme (UNDP) resident representative for Malaysia, Singapore and Brunei Niloy Banerjee, who addressed “Shaping a Ca$hless Economy”.

He said that the issues concerning cashless society are for making it inclusive so everyone can participate, that it should also be fair and make things more efficient than what is available currently.

“At its core, digitalisation will be a force for good if it is citizen-centric,” he added.

He mentioned the importance in building a foundation for a digital financial ecosystem that upholds flexibility, connectivity and privacy; as well as the need to educate citizens to become more digitally savvy.

Niloy stressed the need to develop catalytic opportunities, to deliver digital financing and bring it into mainstream, capital markets, tax systems, households, banking and more.

Powering the Acceleration of Digital First Experience by Amitoj SawhneyPowering the Acceleration of Digital First Experience by Amitoj Sawhney

In the following presentation, entitled “Empowering the Acceleration of Digital-First Experiences”, Visa’s South-East Asia regional head for Products and Solutions Amitoj Sawhney shared that the region is poised to become the fourth largest economy in the world by 2030.

And while Covid-19 has led to many changes, consumers have developed new habits, some of which will persist after the pandemic.

“Not just through payments, consumers have also changed in how they shop, via large online marketplaces or local businesses,” he said.

Amitoj predicts new digital players in the future, via open banking and people are more likely to adopt, thanks to better speed and efficiency and more personalised financial products.

[Power Panel] Digital Banking: Powering a Ca$hless Society (from left): Adrian Lee, Mohd Muazzam Mohamed, Dawn Lai, Royce Tan & Henry Nguyen[Power Panel] Digital Banking: Powering a Ca$hless Society (from left): Adrian Lee, Mohd Muazzam Mohamed, Dawn Lai, Royce Tan & Henry Nguyen

Following that was a “Digital Banking: Powering a Ca$hless Society” panel discussion, moderated by KPMG Malaysia head of Financial Services Adrian Lee, with panel speakers including Bank Islam CEO Mohd Muazzam Mohamed, Experian Information Services Malaysia CEO Dawn Lai, StarBiz journalist Royce Tan and Timo Digital Bank Vietnam CEO Henry Nguyen.

Tan explained that going cashless gives people a seamless experience and is the direction the country is heading towards.

“There are more benefits, as it’s faster, cleaner, safer as the need to carry cash is reduced and less money laundering.”

And while accessibility to certain categories in society will take time to resolve, cashless transactions will not take over totally as both systems would run simultaneously until more people are converted.

Lai added that digital spending also allows users to track their expenses better.

She cautioned however, that going completely cashless places a high dependency on technology throughout and this can cause challenges when downtimes occur.

“It is also important for the government and the payment industry to support the digital transformation with good merchants’ rates and adoption,” Lai added.

Mohd Muazzam presented a different view that the banking industry in Malaysia is matured with a very high number of users.

Most Malaysians own a deposit account with an ATM card, some of which functions as a debit card, which is a form of cashless transaction.

The cards also offer transparency and data collection for better tracking and monitoring spending.

Nguyen said that although people have been hesitant to use cards in the past, they will eventually change their habits because doing so is more convenient or reliable to the customers, and they have carefree and frictionless transactions.

He asserted that neo banks and digital banks will not replace traditional banks, but instead offer new paths for people to receive financing if they are underserved by traditional banks.

 [Power Panel] Battling Financial Cyberthreat in the Age of Corona (from left): Alain Schneuwly, Pablo Sanz, Col Ts Sazali Bin Sukardi, Noorhisham Rusmani & Eric Quah[Power Panel] Battling Financial Cyberthreat in the Age of Corona (from left): Alain Schneuwly, Pablo Sanz, Col Ts Sazali Bin Sukardi, Noorhisham Rusmani & Eric QuahIn the panel discussion entitled “Battling Financial Cyberthreat in the Age of Corona”, the speakers included AirAsia chief technology officer Pablo Sanz, senior CyberSecurity Malaysia’s vice-president of strategic research division Col Sazali Sukardi, Mizuho Bank Malaysia chief information security officer Noorhisham Rusmani, Red Hat Malaysia country manager Eric Quah and was moderated by Boston Consulting Group Platinion managing director Alain Schneuwly.

Responding to Schneuwly’s question on how the pandemic affects cybersecurity, Sanz responded that the regional travel lockdown has lessened cyberattacks.

However, as the company diversifies into BigPay, food delivery service and more, new cybersecurity issues arise.

“We have moved from an approach that is purely for an airline industry to a wider range of activities with different problems,” said Sanz.

Sazali in turn explained that his task is to provide cybersecurity services and expertise to stakeholders, so there is a lot of interaction with each other via secured networks and public domain.

“We have to look at the whole ecosystem and supply chain, as vulnerabilities occur everywhere.”

He said cybersecurity should be seen as a whole, and there has to be better laws to govern and provide for the advancement of cyber crimes.

Quah said that in the past year or two, Red Hat has helped many brick and mortar companies transform themselves digitally.

“We incorporate security as early as the development cycle,” said Quah.

“Cybersecurity is more than just the technology, it encompasses exploitation of processes and the awareness of the users.”

Noorhisham gave his views on the banks’ perspective that Bank Negara has already presented its regulations as defined in its Risk Management in Technology, which concerns governance, and the banks will have to oversee the cybersecurity aspect as well as the significant project.

“In Malaysia there is the Malaysian Cybersecurity Strategy 2020-2024, the Bank Negara’s Risk Management in Technology, while the PayNet system has also implemented its own cyber resilience framework,” Noorhisham said.

[Power Panel] Going Walletless: The Future of Consumerism (from left): MC Lai, Matthew Tan, Bryan Tan & Kurt Brissett[Power Panel] Going Walletless: The Future of Consumerism (from left): MC Lai, Matthew Tan, Bryan Tan & Kurt Brissett

On Day 2, the event kicked off with a panel discussion called “Going Walletless: The Future of Consumerism”, which was moderated by Kantar Malaysia’s CEO MC Lai, with panel speakers comprising of Domino’s Pizza’s group chief information officer for Malaysia, Singapore and Cambodia Matthew Tan, Pinsent Masons partner and Advertising Standards Authority of Singapore, Consumer Association of Singapore (CASE) council member Bryan Tan and Transport for New South Wales (NSW) executive director for Connected Journeys Kurt Brissett.

Brissett related the situation that certain cities in Australia saw an increase in contactless payments during the increase of Covid-19, with customers showing they prefer the convenience of contactless payment.

He also mentioned that subsidies through digital payments by the NSW state government drove people to digital payments, while QR codes allow citizens to spend these subsidies digitally during the pandemic.

Matthew said contactless payment has grown in Malaysia but accelerated with Covid-19.

“It is good to constantly adopt high resiliency from a system infrastructure perspective, whereby the user experience is seamless.”

Yet, no one expects the pandemic to spread so quickly, so keeping up with infrastructural scalability is important.

Bryan shared that while contactless payments had a slow natural progression in Singapore, the pandemic was a catalyst for the massive explosion, with volumes increasing by at least 100%.

“Countries like China, where banks are largely unavailable, are quick to embrace digital payments as its original payment infrastructure was lacking.”

McKinsey & Company partner Anutosh Banerjee started his talk on “Opportunities & Challenges of Decentralised Finance (DeFi)” by comparing the total of Internet users to those who own bank accounts and the higher amount will always be Internet users.

Therein lies the opportunity. Anutosh said decentralised financing enables yield generation through the use of cases that parallel traditional finance.

He explained that users can deposit funds at the smart contract, funds are pooled and the risk is shared among all the users. The returns generated are redistributed back to users via smart contract.

There is no central governance, no overheads so returns are higher than traditional financing.

In a wider, more capital market view, decentralised financing may have implications for better shareholder governance, faster asset issuance, and almost instantaneous clearing and settlement.

[Power Panel] The Future of Digital Financing: Enter DeFi (from left): Anutosh Banerjee, Luc Jodet, TM Lee, Peter DeMeo, Jason Hsu[Power Panel] The Future of Digital Financing: Enter DeFi (from left): Anutosh Banerjee, Luc Jodet, TM Lee, Peter DeMeo, Jason HsuThe event concluded with the “Future of Digital Financing: Enter DeFi” panel discussion, led by moderator Anutosh fresh off his earlier presentation on decentralised finance.

Participating speakers included Arianee co-founder and Aria Labs executive director Luc Jodet, CoinGecko co-founder TM Lee, IBM Systems’ Digital Asset Infrastructure head Peter DeMeo and Taiwan Parliament former member and Taiwan FinTech Association (TFTA) vice-president and crypto congressman Jason Hsu.

DeMeo started off by offering his thoughts that mega banks already have digital assets planned, with digital custody, the exchange traded fund and more.

The benefits are a self-driving bank, where processes can be done digitally and it cuts off discrimination at certain levels, while fraud is reduced thanks to blockchain technology.

Lee said when decentralised financing emerged, certain bitcoin trading functions can be performed without a platform or exchange.

The problem arises when the process is so technical that figuring out how to use the protocol, manage fees, and ensure the tokens are protected, are too advanced for a layperson to pick up.

He suggests that banks could act as an on-ramp, encouraging people to start interacting and familiarising themselves with that.

Jodet explained that Arianee creates non-fungible token (NFT) based digital identities, such as digital passports for luxury goods. These provide holders identity, ownership and a gateway to the digital world.

He clarified the company is looking into decentralised financing as a core component for composing and building in the future and experiments are being carried out to bring other elements besides digital assets into the fold.

Hsu, as an ex-politician who served in the parliament in Taiwan from 2016-20, focused on bridging the gap between public policy and technology.

“This year, the whole crypto movement has gone from initial coin offerings to DeFi signals that a new wave of digital assets are on the rise,” he observed.

He asserted that it is important that regulators catch up with the technology and fully understand how it works.

“More conversations are needed between the industry, the regulators and practitioners of cryptocurrencies.”

The Digital Financing: Powering a Ca$hless Economy Live Virtual Conference was powered by Exabyte Partner – Visa, Terabyte Partners – Cohesity, Fundaztic and Red Hat, Virtual Roundtable Partner – IBM, Gigabyte Partner – Alliance Bank, Megabyte Partners – Experian and Public Bank, and Knowledge Partners – Boston Consulting Group, Kantar Malaysia, KPMG in Malaysia and McKinsey & Company.

Visit bit.ly/digifinplaylist to watch the sessions’ replay.

Star Media Group’s #digitalXdata 2021 Road to Malaysia 5.0 series continues with the “Smart Gov & Public Services: Powering a Digital Nation Live Virtual Conference” on Sept 7 and 8. Those interested can register at bit.ly/smartgov2021

For more information or collaboration opportunities, email events@thestar.com.my

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