BigPay: Digital banking will redefine financial industry in Malaysia

• In an interview with Tech Wire Asia, BigPay CEO Salim Dhanani believes the birth of digital banks in Malaysia will “redefine the financial services industry overall” which in turn is  “fantastic news for consumers”.

The Central Bank of Malaysia is due to announce its first five recipients of the country’s maiden digital bank licenses. The announcement, meant to take place in the first quarter of this year, could take place anytime between now till the end of March. BigPay, a financial service by airasia Digital, is among the 29 non-bank companies contending.

BigPay said it created a consortium of strategic partners including Malaysian Industrial Development Finance Berhad (MIDF), Ikhlas Capital and a foreign conglomerate with fintech expertise, to support its application. For the fintech app, a BigPay Bank will allow them to execute deeper on their mission to build a connected financial future for Malaysian consumers and entrepreneurs. 

“If we’re given the license, we’ll be able to reach more Malaysians with a wider range of services – all with the goal of building a stronger Malaysia,” said CEO Salim Dhanani. Picking up from our previous interview with Dhanani, in this second part he shared how the upcoming digital banks would be ideally placed to take advantage of accelerated digital adoption among customers.

What are the digital trends that can enable inclusive financial services for Malaysians? 

Let’s use the example of credit. If you wanted a loan in the past, you would walk into a bank branch – assuming you had the time during their operating hours – and a bank representative would assess your eligibility. Eligibility was typically based on your job, appearance and the few data points that the institution has access to. 

You would then have to provide a range of documents to verify the information they already have. Inevitably this resulted in a lot of people not having access to credit. This is changing quickly. You do not need to walk into a branch, you do not need paper documents, nor do you need to have had access to credit before. 

Fintechs have access to a wide variety of data and they have developed better algorithms to assess eligibility for credit and this is all done in a very regulated way to ensure consumer data is protected and used responsibly. Everything is done digitally and on the mobile app to avoid wasting time. This example is only about credit – there are many more financial products going through this type of digital transformation. 

To highlight, it is not only about making it more straightforward and more intuitive for the customer to access financial products; it is also about operating efficiently. There is no need for bank branches, paper, or manual processing with everything done digitally. This creates huge cost savings, and in-turn enables fintechs to pass these savings to consumers. 

Finally, these lower-cost products mean that more people can access that micro-loan or micro-insurance policy, for example, whilst ensuring the fintechs have sustainable business models.   

What are the digital solutions that would ensure a compliant and transparent fintech environment?

Our goal is to empower the customer – and this means being upfront and transparent with costs. In that sense, BigPay uses next-gen tech stacks that enable us to do two things: deploying products faster and assessing risks better. The BigPay Card comes with a Card Limit which we approve for our users and are subject to stringent requisite both KYC verification and Customer Due Diligence (CDD; a mandatory requirement under the Applicable Laws for any party that applies for the Card). 

For our e-KYC technology (Know Your Customer) process, we have artificial intelligence automatically matching our users’ faces and identification documents with the information provided during signup. We also have a strong AML infrastructure in place to ensure that our users’ capital is protected against money laundering, terrorism financing and fraudulent or illegal activities.  

Many people turn to digital products and services because of convenience first, but they stay because high-value products such as personal loans, insurance and investments are presented quickly and transparently. Customers have all the information they need upfront and clearly. It is never presented in complex financial language that people outside of the industry do not understand. This is important because customers need to understand the information to make informed decisions.  

Where is the fintech space in Malaysia heading in the next two years?

Over the last ten years, the Malaysian economy has grown and so has its middle class. But the reality is that one of the significant drivers of sustainable economic growth for the lower and middle class is twofold: financial literacy and access to financial products – beyond debit accounts. That allows for wealth creation for consumers, and this is the opportunity that BigPay sees in helping enable this.  

[That said] today’s consumers are digitally savvy and expect a high degree of personalization and convenience from their financial services. With each new generation of banking customers comes a more innate understanding of technology and, as a result, an increased expectation of digitized experiences. We see increased importance for financial providers and digital players alike to have a personalized and unique proposition for their customer base.   

Over the next two years, we will see the launch of digital banks in Malaysia and incoming Fintech players offering customers a wide variety of products. With this, banks will be forced to adapt to a new competitor landscape, and all of this is fantastic news for consumers. It means more access, better products and all at a lower cost.  

It is the focus on technology, changing behaviors and expectations of consumers, along with a wave of new entrants that, combined, will lead to not only growth in financial services overall, but will redefine the financial services industry overall. 

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