digital banking innovation - "a look of tomorrow"

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Digital Innovation Raja Teh Maimunah Chief Executive Officer Hong Leong Islamic Bank Chief Operating Officer Digital Innovation & Transactional Banking | Hong Leong Bank a look of tomorrow

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Hong Leong Islamic Bank MD/CEO, Raja Teh Maimunah Raja Abdul Aziz delivered a 1-hr talk at NICE2014, organised by MOSTI, on how banking has evolved from the day trading began thousands of years ago, to how digital banking will be at the forefront of all customer engagements.

TRANSCRIPT

Page 1: Digital Banking Innovation - "a Look of Tomorrow"

Digital InnovationRaja Teh Maimunah

Chief Executive OfficerHong Leong Islamic Bank

Chief Operating OfficerDigital Innovation & Transactional Banking | Hong Leong Bank

a look of tomorrow

Page 2: Digital Banking Innovation - "a Look of Tomorrow"

Everything evolves with time…

Page 3: Digital Banking Innovation - "a Look of Tomorrow"

The evolution of trade, money & banking

Monte de Paschi (founded in 1472) is the world’s oldest bank still in existence, and has now also adopted digital banking

The modern banking era traced back to the early Italian Renaissance period

Trading & banking date back to the ancient days of Assyria & Babylonia – circa 2000BC

Page 4: Digital Banking Innovation - "a Look of Tomorrow"

Milestones in the modern banking era

<17th Century 18th Century 19th Century

Bank Debts

Birth of regulations and first central bank -

Amsterdam

Goldsmiths and promissory notes in

London, which gradually became bank notes.

Standardized printed notes with signatures

Clearing facilities, security investments, cheques and

draft protections

First overdraft facility introduced by The Bank of

Scotland

Fully printed notes which didn’t require signatures

Rapid growth due to Industrial Revolution

NYSE

Rosthschild & Baring saw their merchant banks

dominate the banking world

Methodologies & Institutionalization

20th Century 21st Century

US Federal Reserve

Charge Card (1928)

IMF & World Bank (1944).

Credit Card (1958)

ATM machines (1960s)

Home Banking – using keyboard, TV and telephone (1981)

E-banking and SMS banking (1990s)

Non-FIs enter the financial community (2001)

Global growth in Islamic Banking

iPhone (2007) = mobile banking applications

Merchant payments through mobile-generated QR codes

Mobile money transfers

Cardless ATM withdrawals

Globalization, Technology & Self-Serve

Page 5: Digital Banking Innovation - "a Look of Tomorrow"

Needless to say, digital banking adoption has a lot to do with the global growth in internet speed, accessibility and devices

‘96 ‘98 ‘00 ‘02 ‘04 ‘06 ‘08 ‘10 ‘12

INTERNETPOPULATION 100m 1b

INTERNETSPEED

(Mbps)1.5 105 50 100 200

YEAR

SMARTPHONEUSERS 100m 500m

Malaysia:

39%tablet penetration

On average,2 smartphones for every 9 people on earth

Malaysia:

140%mobile phone penetration

Malaysia’s Penetration:

63%smartphone

39%tablet

Malaysia:

63% smartphone penetration

>2.6b

>1b

>500

Page 6: Digital Banking Innovation - "a Look of Tomorrow"

20mins-1hr 5mins 10mins 5-10mins 1-3 days 5mins1min 20mins-1hr

1min 2mins

It’s all with two things in mind – CONVENIENCE & PRODUCTIVITY

Transferring Money Receiving Money

with mobile / digital banking…

Page 7: Digital Banking Innovation - "a Look of Tomorrow"

Banks’ digital brands – a different business approach vs. its conventional peers

Page 8: Digital Banking Innovation - "a Look of Tomorrow"

What we’re doing at

Page 9: Digital Banking Innovation - "a Look of Tomorrow"

OverallStrategy

digitization

digital products

partnerships& merchants

marketing &social media

Enabling and expanding Connect’s online banking capabilities across various digital platforms, with emphasis on innovation in mobility.

Development of online banking products to replicate offline banking offerings. Some online products will have enhanced benefits.

Continuous communication through advertising to educate consumers on Connect and its services, as well as promotions and acquisition campaigns

to increase adoption.

Value Creation via expansion of reach, increased usability and ecosystem enrichment

Page 10: Digital Banking Innovation - "a Look of Tomorrow"

Tailored - User interface is customized and responsive to devices for better user experience.Holistic – usable across all operating systems and browsers.

Page 11: Digital Banking Innovation - "a Look of Tomorrow"

Peer-to-peer Mobile Money Transfer function that allows HLB Connect users to send money to a

phone number, no sharing of account details necessary.

Merchant payment function where customers can pay for their

purchases using their Connect Mobile app.

Connect Mobile app users can generate their own collection code

on their mobile phones to withdraw cash from ATMs without

using their ATM cards

Page 12: Digital Banking Innovation - "a Look of Tomorrow"

Watch the video on YouTube.

Search “Pex Hong Leong Bank”

Page 13: Digital Banking Innovation - "a Look of Tomorrow"

What does the future hold?

* Pwc research : Retail Banking 2020: Evolution or Revolution

Develop customer-centric business models, including social

banking & commerce

Optimisingdistribution

Simplifying frameworks &

operating models

Enabling innovation & fulfilling the capability

requirements to foster it

Proactively managing risks,

regulation & capital

Page 14: Digital Banking Innovation - "a Look of Tomorrow"

thank you

terima kasih