We had a chance to speak to Red Hat’s Benjamin Henshall, Sales Director, Financial Service, Red Hat when he was in town regarding the condition of financial services in the Asian Pacific region and specifically Malaysia. We’ve also discussed a little bit about the future of financial service and its digitization. Of course in this day and age, there is no way that you will not come across any e-payment services, so we touched a little bit on the condition of e-payment in Malaysia as well.
The financial condition within Asia Pacific, without being specific to regions is a little bit broad in terms of dynamic. If you would like to describe it, there is no way to really consistently describe the financial services from region to region. The diversity of conditions range from very traditional structures to near cashless, mobile based banking system like what you see in China. We also see radical changes in the region when you talk about financial digitization especially in India where cashless transactions take over almost overnight.
The conditions and dynamics of financing in Asia though depends plenty on the maturity of the market itself. For example Japan is a maturing banking market with a highly different condition and requirements compared to places like China. Of course regulations also play a role in the sort of financial services that you get in the region itself.
Specifically in Malaysia, Red Hat sees plenty of opportunities in the region. There is a shift in culture and the mindset in Malaysia when it comes to banking. Rather than focusing on the branding and size of the bank, convenience is now key for Malaysians. Digital infrastructures are evolving and taking shape very quickly. Despite that there is no significant changes or radical changes just yet. As such there is still plenty of room for improvement in the local banking scene.
The state of e-payment in Malaysia is, in a nutshell; crowded. There are nearly 10 e-payment solutions that are available currently in the market including the native banks’ ones. All of these are mobile based payment apps that encourages cashless payments and solutions. Red Hat sees this as an opportunity for the financial industry. The term they use in this condition is Front Foot banking which is an opportunity to banks. In this condition, banks has to prepare and adopt their services to suit the third-party services and solutions out there.
In that sense Malaysia is no different that plenty of the other Asia Pacific regions. There are certain aspects in Malaysia that is not yet addressed of course. For example, the technology aspect is yet to mature just yet. Banks at this time has yet to comprehensively prepare their technology infrastructure to support the current movement of digitization. There is still a gap in technology development and integration between the banks and vendors to make things as agile as they need to be.
Another challenge that Malaysian financial institutions has to address is their policies. The current way of thinking and policies that they have put in place for the past years has proved to be a little constraining when it comes to making these institutions as agile as they need to be to adapt to the current digitization structure. Despite that Malaysia recognises the problem and they are taking steps toward changing and adapting to the changes.
That said Red Hat is not doing much different for Malaysia. They have always approached the market very similarly to other Asia Pacific markets. All these markets at the end serve nearly the same goals with each other. Red Hat is working with the key financial institutions though to fast track the digitization processes in Malaysia. They are also looking toward making the process as painless and least costly as possible for key stakeholders.
Also published on Medium.