Hong Leong Bank continues digital push into FY21

by HARIZAH KAMEL/ pic by MUHD AMIN NAHARUL

HONG Leong Bank Bhd (HLB) will spend up to RM130 million on expanding its digital initiatives in the financial year ending June 30, 2021 (FY21).

Malaysia’s fifth-largest lender by assets said it has allocated between RM150 million and RM200 million in capital expenditure (capex) for FY21, of which 60% to 65% will go towards domestic and international digital expansions.

The investment will be channelled towards the bank’s operations in Malaysia, Cambodia and Singapore, HLB group MD and CEO Domenic Fuda (picture) said.

“There are plans to launch enhanced capabilities this year. We’ll do something in Cambodia and we have plans to do something in this financial year in Singapore,” he said at the launch of HLB’s Digital Day 2020 in Kuala Lumpur yesterday.

The capex will be spent on enhancing the bank’s own capabilities rather than merely relying on third-party suppliers which it did previously, Fuda said, adding that all of its mobile apps for consumers were fully built in-house.

“A large chunk of the capex will be managed towards digital initiatives, whether to enhance customer experience, cybersecurity or investment compliance,” he said. The capex allotment is similar to FY20, when HLB budgeted about RM220 million in capex, of which 60% to 70%, or RM130 million to RM140 million, was set aside for digital capabilities enhancements.

The bank recorded an 11% increase in total transaction volume during the Movement Control Order and its subsequent relaxed phases in April and May this year from both retail and corporate customers.

“This indicates business activities are returning. We’re not seeing the kind of volume we were seeing late last year, but it’s very encouraging that business activities are picking up,” Fuda said.

The lender also saw a 13-fold increase in the total amount value of e-wallet top-ups from March until May 2020, compared to the same period last year.

As of May 2020, almost 80% of HLB customers were regularly using HLB Connect, the bank’s mobile banking app.

Customers aged above 50 recorded the biggest year-on-year increase at 42%, while mobile banking transactions spiked 80% in total transaction amount and 75% in the number of transactions conducted.

“A study done just before the pandemic showed that 69% of Malaysian respondents were planning to use cashless payment methods more often. The pandemic would only have hastened the digital shift and cashless adaptation,” Fuda added.

Throughout the coming year, HLB plans to roll out more digital reboots and enhancements across all banking segments encompassing retail, business and corporate banking, small and medium enterprises, and Islamic banking.

The new digital solutions are expected to ease the transition and adoption of a digital lifestyle including low-cost contactless payment solutions, mobile banking upgrades for business customers, digital investments and e-KYC (electronic know-your-customer) account opening.