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Banking Disruptions

Kang Yew Jin, CITO, HLB Bank sharing his thoughts on banking disruptions in the digital age

Welcome to the second edition of Design Talk Series - a compilation of perspectives on 'Design' by experts across the industry. This is in continuation to our series on 'Celebrating Design' to celebrate people, ideas and the plethora of possbilities. 

Kang Yew Jin, CITO of Hong Leong Bank, is a seasoned IT professional with end-to-end experience of how to 'Run the Bank, Change the Bank', consulting, planning, managing, executing, running and operating IT in financial services across the banking and insurance sectors. Yew Jin has held prominent global roles in Accenture, MetLife, IBM, AmBank and OCBC (during that time, OCBC was awarded the World's Strongest Bank rating by Bloomberg).

Here are some of his thoughts on the banking sector.

On an impending banking disruption

There are various organizations trying to do something innovative, among them are the telcos. If telcos get their acts together they can easily disrupt the banking industry as well. Malaysia has 5 or 6 major telcos and 10 major banks. The biggest telco is probably bigger than the biggest bank. If telcos get it right, the can be a big disruptor.

On how branches may evolve in this digital age

Branches are not cheap to deploy and maintain. We have to look at ways to make them more effective. Traditionally, before the digital warfare came into the picture, banks had the type A - flagship branches, type B - medium size branches, type C - small branches & type D, which were run more because of an obligation towards the society, usually in some far-flung places. This model cannot continue. We have to innovate. We wanted to do something different, which is our Mach Branch. Through this type of branch we have shown that we can do certain things differently, not necessarily just make money. This kind of branch is located in a shopping mall and needs about 6 staff, a machine that helps account opening, video conferencing connected to the call center. It allows us to roll out a smaller footprint branch, with smaller number of users. We have to explore ways to do things differently; if we follow the old ways we will only lose money.

On market disruption

PEX and PEX + were innovative and the applications disrupted the Master and Visa industry by making direct payments. But did we encounter any challenges? Yes, we did. This may be a technological innovation but technology was the least of our worries. The biggest challenge was to make PEX and PEX+ big. However innovative it may be, people must use a service to make it great. In the early days we had to do a lot of marketing and promotion for both of them. We had to give discounts to merchants for them to promote its usage. We found that when we didn’t run any promotions the number of PEX and PEX+ transactions dropped, and vice-versa. Does that mean that we have to run campaigns through the year to sustain the use of PEX and PEX+? We have to find a way to make such applications more organic and self-sustaining.


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