Cassasndra Goh Silverlake Axis
PETALING JAYA: Singapore Exchange-listed Silverlake Axis Ltd is eyeing to secure more deals in Malaysia and in South-East Asia as digitalisation takes a firm grip in the regional banking space, fuelling competition for market share among financial digital solutions providers.
In terms of market share, 40% of the top 20 largest banks in South-East Asia currently adopt the company’s financial software and tech solutions.
In Malaysia alone, 90% of local banks are its customers, Silverlake Axis Malaysia deputy executive chairman Cassandra Goh told StarBiz.
While she could not divulge investment figures at this juncture due to its strategy tailored to ever-evolving technological solutions, she said the company has completed over RM600mil worth of deals in 2023.
This, Goh said, was an increase of over 27% from 2022. Silverlake Axis Malaysia is a unit of Silverlake Axis Ltd.
She attributed this to the company’s sales engagement and customer success teams to demonstrate the compelling value proposition of its range of solutions to Silverlake Axis’ clients and marketplace.
“In 2023, our performance overall was encouraging, with total revenue of RM756.9mil and 4% growth from 2022. Our clients span the region. As for Malaysia, they are local and foreign-based banks,” Goh added.
Silverlake Axis is one of the leading enterprise technology, software and services companies focused on financial services within the banking, insurance and retail industries, as well as government agencies.
The digital financial services market in Malaysia is poised for substantial growth, projected to reach US$4.7bil by 2025, according to Google and Singapore-based wealth fund Temasek.
Elaborating on the digitalisation of the Malaysian banking sector, she said the situation was accelerated by the Covid-19 pandemic.
This saw banks swiftly adopting online services and witnessing a threefold increase in Internet banking transactions from 449 million transactions in 2016 to more than 1.5 billion in 2022.
“Malaysian consumers increasingly favour online banking. This has prompted banks to provide faster, more secure digital-first banking to enable seamless customer journeys.
“The country is also seeing the emergence of digital wallets backed by over 50 e-wallets in the country, highlighting Malaysia’s journey towards a cashless society.”
Notably, 76% of Malaysians have currently embraced cashless transactions with 67% expressing confidence in sustained cashless habits, as per the recent Visa Consumer Payment Attitudes Study, said Goh.
Cross-border payments advancements have further bolstered digitalisation, she said.
In March 2023, Bank Negara and the Monetary Authority of Singapore launched a cross-border QR code payment link between both countries, fostering retail transactions and eCommerce exchanges.
In the realm of digital banks, Bank Negara granted licences to five digital banks in April 2022 to the consortia of RHB Bank and Boost Holdings, YTL Digital Capital and Sea Ltd, as well as GXS Bank Pte Ltd and Kuok Brothers Sdn Bhd under the Financial Services Act, KAF Investment Bank and a consortium of MoneyLion, Aeon Financial Service and Aeon Credit Service
Malaysia under the Islamic Financial Services Act.
GXS Bank is a digital bank joint venture between Grab and Singapore Telecommunications.
The Grab-led digital bank called GX Bank Bhd became Malaysia’s first digital bank when it launched last year.
Amid the emergence of digital banks in Malaysia, Goh said their market share remains modest at slightly above 2%. This could be a result of regulatory hurdles and slow uptake, she said, noting that despite this, industry projections hint at a 15% to 20% growth rate by 2025.
In the Asean context, she said Malaysia’s digital banking looks promising although it faces challenges, notably lagging peers in some areas like market penetration.
However, Goh said the anticipated growth trajectory and cross-border innovations showcase the country’s commitment to digital transformation within the region.
On another note, she said with Malaysian banks advancing in digitalisation, Bank Negara’s support and industry-led strategies would pave the way for a more robust digital financial services landscape.
“The country is predicted to go cashless by 2030 but there will be multifaceted challenges – legacy systems, infrastructure limitations, cultural inclination towards cash, regulatory hurdles and cybersecurity risks.
“Improving financial literacy remains a critical factor, in tandem with advancing digital capabilities in financial institutions. Overcoming these obstacles demand a collective effort from industry stakeholders.
“One effort could involve incumbent banks collaborating on financial technology, such as jointly applying for a digital banking licence or strategic partnerships.
For instance, Silverlake Axis’s partnership with Bank Mantap Taspen in Indonesia exemplifies this pursuit of sustainable financial well-being across provinces,” Goh added.
According to Silverlake Axis’ 2023 annual report, group revenue grew 4% to RM765.9mil in financial year 2023 (FY23), compared with RM736.5mil in FY22.
This was contributed mainly by a RM28.8mil increase in recurring revenue.
Group revenue was generated mainly in South-East Asia, which contributed approximately 80% of total group revenue in current and previous financial years.
According to the company, the 80% composed of revenue from key countries the group operates in, namely Malaysia, Indonesia, Singapore and Thailand.
The remaining 20% of total group revenue was contributed by clients based in the Middle East, South Asia, North-East Asia, Europe, Africa and the Americas.
The company said the contribution from the Middle East region showed an increase of 3% compared with the previous year, as the group delivered a core banking installations contract secured in FY23 to a customer in the United Arab Emirates.
Throughout the year, the group has been actively expanding the reach of its product offerings, as well as cross-selling to new and existing markets through key partnership engagements with local partners and new personnel to support business expansion and market coverage.
Meanwhile, the group recorded a gross profit of RM451mil in FY23.
This was 8% higher than the previous corresponding period with an aggregate gross profit margin of 59%, higher than the 57% achieved in FY22, due to better operating performance from recurring revenue this financial year.
