Positive reaction to Maybank’s digital initiatives
KUALA LUMPUR: Malayan Banking Bhd (Maybank) has left analysts feeling optimistic on the potential of the group’s digital initiatives, following Maybank Group Digital Day.
According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), Maybank’s digital offering is not new as it was one of the leading proponents in online banking.
To note, its online banking platform, Maybank2U, was launched in 2000, and from anecdotal evidence, it is one of the more preferred platforms.
“However, with the population of its home market becoming more technologically savvy, it needs to update its offering to stay ahead of its peers,” MIDF Research said in a note yesterday.
This includes the first quarter of financial year 2017 (1QFY17) launch of the group’s mobile app, it added.
MIDFResearchbelievedthatMaybank is future-proofing the group’s product offering with its digital initiatives.
This was premised upon the focus Maybank has on ensuring a strong online and mobile presence, which would appeal to millennials who are more technologically savvy.
“For background information, millennials are those born in 1981 to 1999, or would be between the ages of 18 to 36 today,” it said.
The research arm believed that this is strategically a wise move given that the millennial and the lower age groups are the majority in most of the group’s home markets.
As per the Department of Statistics, Malaysia, MIDF Research highlighted that, in Malaysia (which contributed 68.7 per cent to the Group’s 1HFY17 PBT), the age group between 20 to 39 years represented 33 per cent of the population in 2016.
“Meanwhile, 35.5 per cent of the population were those below 20 years, which denotes the potential future active customers of the group.
“In fact, assuming that the age group in which the highest likelihood to be an active user of online or mobile transaction (between 15 to 39 years old), its contribution to the population was 42.2 per cent.”
MIDF Research recognised the need for Maybank to maintain the group’s dominant position in the digital offering. The research arm said this is due to the fact that the number of cashless transaction, whether through internet banking, mobile wallet or debit cards are on the rise.
“AccordingtoBankNegaraMalaysia’s statistics, from the period 2012 to 2016, the value of Interbank GIRO transaction grew at a compound annual growth rate (CAGR) of 38 per cent to RM767.6 billion,” it said.
Therefore, the research arm was not surprised by the management’s expectation of transaction value via mobile for the group to reach RM22 billion in 2017, or 95 per cent year on year (y-o-y) growth.
MIDF Research noted that the most obvious benefit from better digital offering will be cost savings from areas such as lower personnel cost due to lower headcount as most processes are automated, lower cost-to-serve and less maintenance spending on vendors.
“Also, we understand that better productivity can be expected from the personnel and more tailored customer focus.
“The digital initiatives are also expected to enhance revenue through more cross selling and bundling of products.
“With data analytics, the group could tailor made financial solutions for its customers,” MIDF Research said, adding that this includes on-boarding of SMEs which are mainly online traders.