What’s in it for me? – A consumer’s perspective on digital banking

IT has been almost half a year since Bank Negara’s announcement of the five successful digital banking applicants in Malaysia.

In the Asia-Pacific region, the digital banking scene is also moving in the same direction, if not at a faster pace, as evidenced in Hong Kong’s establishment of eight digital banks as well as Singapore’s Trust Bank which onboarded more than 100,000 customers within just 10 days of its launch.

With the popularity of Internet and mobile banking, how is digital banking any different? More importantly, what makes digital banks unique?

What is a digital bank, and how is it different from the other banks currently operating in Malaysia?

A full-fledged digital bank is expected to conduct similar banking business with their incumbent counterparts. This includes accepting deposits on current account savings account, provision of finance, etc.

The main differences lie in how they conduct their businesses:

> Through digital channels – Service offerings are only available online without the need for brick-and-mortar offices.

> How they can serve the best interest of Malaysia – Accessible to basic banking services previously not available to the underserved population, with significant cost difference.

> Introduction of innovative products –Customisable products according to current needs and lifestyles.

What to expect from digital banks?

In Deloitte’s most recent 2021 Digital Banking Redefined report, it is noted that new functionalities typically gain faster traction with digital banks, eg, bill split 27% vs 2%, virtual debit card 26% vs 2%, chatbots with advanced use cases 15% vs 4%, and chatbots allowing transactions 12% vs 2%.

Drawing on some successful case studies across Asia, Hong Kong and Singapore are known as the powerhouses in the digital banking scene.

Hong Kong

To date, the financial regulator in Hong Kong has authorised eight virtual banks to operate in the region.

Consumers are able to register and create their accounts within five minutes, with some banks incorporating selfie biometrics authentication for added security.

The consumers also have easy access to competitive interest rates and no minimum balance required in their savings account.

Consumers are also engaged through gamification, motivating them to take ownership of their financial wellbeing.

For example, ZA Bank’s ZA Quest 2020 and ZA Carnival 2022, where consumers are challenged to complete bi-weekly quests of depositing a minimum sum, and other simple challenges to unlock prizes.

In terms of financing, consumers can enjoy instant loan approval and disbursements with flexible repayment periods and terms, option for debt consolidation loans, and access to hybrid loans.

A hybrid loan is a combination of revolving and instalment loans where consumers can first apply for the loan in advance and redraw anytime within the credit limit.

Most digital banks also offer 24/7 foreign exchange services with real time rates and no handling fees.


Closer to home, Singapore has in total five digital banks, with three to serve retail consumers and the other two to serve the wholesale market. The digital banks in Singapore are taking an innovative approach in attracting new consumers.

For example, Trust Bank offered their new sign-ups with freebies, eg, Signature Breakfast set, one kg of superior fragrant rice, and monetary vouchers, eg, S$35 (RM114) fairprice voucher etc.

The trend of numberless payment cards, which provides dual functionality of a debit card and credit card, is also gaining traction in Singapore.

As for investments, consumers are given the flexibility to invest in lump sums, periodically, or upon specific transaction made. For example, Grab’s AutoInvest that allows users to set aside as little as S$1 (RM3.25) for each Grab transaction.

Most digital banks will also likely include no minimum deposit, lock-in periods and withdrawal fees, in their offerings. Savings also share similar characteristics which offer more flexibility to consumers in terms of managing liquidity.


Locally, we can expect a fresh take on new and innovative features and functionalities from the digital banks. There will likely be more integration and collaboration across different platforms and more interactive dashboards, real-time communications, given the larger role in technology.

We can now choose to open a new banking account remotely, access a banking adviser live, complete day-to-day activities such as buying groceries, shopping for apparel, paying bills, or managing your subscriptions, and track your spending and investment returns – virtually, anytime and anywhere, all through our mobile phones.

Globally, digital banks are here to stay. With the banking industry entering into a new chapter of its evolution, the way digital banks operate will likely shift the financial services ecosystem, given their unique position to be innovative, unconventional and most importantly, to serve in the best interest of Malaysia.

Justin Ong is a financial services industry leader of Deloitte Malaysia. The views expressed here are the writer’s own.

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digital banking , Bank Negara


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