“Based on our recent customer survey conducted during MCO, two-thirds of our customers prefer using online channels for account opening, while 60% indicated that they are less inclined to visit the branch to perform their banking transactions given the current pandemic”
SPOKESPERSON AT ALLIANCE BANK MALAYSIA
For instance, digital marketing currently contributes up to 20% customer acquisition for Alliance Bank Malaysia’s mortgage refinancing service Alliance ONE Account. With e-KYC, customer acquisitions efforts are expected to accelerate further as more resources could be channeled towards digital channels.
This is because e-KYC will enable the bank to reduce the cost of acquisition and the cost to serve over time. “As we aim to move towards 24/7 banking, e-KYC is a natural progression for us as Covid-19 has accelerated the shift of our customers’ preference for fully digital banking,” says a spokesperson from Alliance Bank Malaysia.
The key challenge for banks here is to be able to adapt to the new processes and systems that come with going digital, while maintaining their relationship with customers. One method is to ensure that there are various interaction channels between the bank and its customers.
“We have designed the digital interface to include instant remote assistance for customers requiring help. The assistance is provided by a video call, web chat or over the phone,” adds the spokesperson from Alliance Bank Malaysia.
It’s not just about improving tech capabilities, though. Internally, the role of banks’ service staff will also need to shift. For instance, Alliance Bank Malaysia said it has been upskilling its contact centre staff to provide assistance to customers on digital banking transactions or digital loan applications.
“In the near future, bank branches will need to be transformed to serve a different purpose. Most banks branches have already pivoted away from being transactional branches to service type branches. So only banks that are still using their branches as primary transaction branches will be impacted”
LING KAY YEOW, PARTNER (CONSULTING), ERNST & YOUNG ADVISORY
Though tech-forward, the cost saving from e-KYC can be minimal – at least when it comes to incorrect onboarding, according to Ling Kay Yeow, partner (consulting) at global advisory firm Ernst & Young Advisory. This is because the remediation of e-KYC is a manual process that could take days, he says.
There’s a use for physical bank branches in a digital banking future.
But given the sensitivity of personal financial data associated with e-KYC, data security would be a primary concern among banks, especially when they work with a third-party, says EY’s Ling.
And without a centralised identity verification database, would implementing e-KYC make the banking sector even more vulnerable to identity fraud?
Show me your ID
To date, identity verification in Malaysia is dependent on the very physical biometric or thumbprint data stored within a citizen’s national ID card—MyKad.
But thumbprint verification is not always a feasible method to verify one’s identity as it requires a person to be physically present. To keep up with the rise of digital services, the Malaysian government is undertaking a study on the implementation of a national digital ID platform.