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Malaysian banks still face big digital transformation gap, report says
March 2, 2016

A new joint report from banking and financial services professional body The Asian Institute of Chartered Bankers (AICB) and EY (Ernst & Young Advisory Services) shows that Malaysia-based banks still have far to go in the data transformation journey.

Speaking of the study ‘C-Suite’s Next Game Plan: Data Analytics?’, Chow Sang Hoe, EY’s ASEAN Advisory managing partner, said Malaysia-based banks were still at “a nascent stage and one to two years behind the current global standard practice in terms of people, processes and technology when it comes to realizing value from their data assets.”

Chow said that to move up in the analytics value chain and grow in the age of big data, Malaysia-based banks need to optimise their data assets, adopt customer analytics and form strategic collaborations.

He said advanced analytics was the next game plan for Malaysia-based banks to monetise data and to compete on a differentiated platform for long-term value creation.

“Data analytics needs to be anchored to a multi-dimensional and rapidly evolving data ecosystem to generate business value,” said Chow.

“Broadly speaking, today’s business ecosystem comprises customers, risks, competitors, markets and talent,” he said. “High performing organisations globally are now leveraging on advanced data analytics to transform their operations. With increasing competition, cost and regulatory pressures, it is imperative that CEOs fast-track their organizational transformation by leveraging on data analytics.”

Survey findings

“Data analytics has rapidly become a significant business agenda in banks and has gained much interest in the banking industry given the fast pace and scale at which data currently being accumulated is coupled with the advancement of technology,” said Tay Kay Luan, chief executive of AICB.

“I believe the overall survey insights in the publication will be helpful in improving and advancing key strategic business plans and management in this particular area of business,” said Tay.

According to the survey, the majority of Malaysia-based banks have a comprehensive set of internal data governance policies, including data security, data privacy, data access and social media policies that are ahead of their global peers.

In addition, the majority of banks have in place policies to limit risks of external cyber threats.

However, notable areas for attention and improvement include data inventory policy, policies on the use of employee devices and policies relating to data management, he said

In terms of responsibility for data in an organisation, 75 percent of their global peers appoint a specific individual; whereas less than half (44 percent) of Malaysia-based banks do so.

The report continued that Malaysia-based banks leave it to their Chief Technology Officer (CTO) and Chief Information Officer (CIO) to be responsible for data across the enterprise, analytics and insights, data privacy, data security, data integration and management, and data governance.

The survey also found that Malaysia-based banks are largely equipped with “statistical-reporting-GRC” data management tools and less equipped with advanced analytics-related tools.

Moving forward

“Malaysia-based banks have already embarked on change and program management to protect and optimise their data assets,” added Sungkyu Chang, advisory partner, Ernst & Young Advisory Services.

“To improve the optimisation of bank’s data assets, it should adopt a “Strategize-Activate-Connect” approach in nine areas that can advance current data management practices,” said Chang.

AICB’s Tay said: “To fast-track the recognition of a bank’s fourth asset to be data, the driving factor is the creation of a data-driven ecosystem guided by connected data strategy across various business functions.”

“Along this data artery, AICB aims to support the regional banking ecosystem by providing deeper insights and knowledge on data analytics as well as to further develop appropriate human capital development programs to balance the risks and improve enterprise-wide performance,” he said.

“Moving forward, Malaysia-base banks need to create an enterprise analytics strategy that is aligned to their business objectives; effectively collect, protect and distribute data; apply advanced techniques, models and statistical methods to data to identify insights and drive business value and performance improvement; and finally, use data to provide business intelligence to support decision-making,” added EY’s Chang.


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