by S BIRRUNTHA / Pic by AFP

THE concerns for cyber threats and security risks continue to pose a threat in banks’ digitalisation journey, resulting in slower adoption of digital transformation initiatives for the benefit of business and customer demands.

Malayan Banking Bhd head of Group Wealth Management and Singapore Community Financial Services Alvin Lee said banks adopting digital means to serve customers indicates that cyber security attacks have also gone up rampantly.

He added that as such, many banks are taking a step back until they figure out how to use digital tools such as artificial intelligence (AI) to counter cyber threats.

“In Singapore, particularly, we see many such incidents involving banks and because technology is borderless, scams have been increasing. So, we definitely see a proliferation there.

“In reaction, banks are obviously trying to use AI to kind of learn how to tackle this right now. Many banks have also taken a step back from doing a lot of technology-related transactions until they learn to counter the threat,” he told the reporters during a roundtable session themed Managing Client Expectations in a Changing Digital Landscape in Kuala Lumpur today.

The roundtable session was organised by Asia Online Publishing Group, in partnership with NEC Malaysia, Avaloq (an NEC company) and Red Hat.

Commenting further, Lee explained that the banking sector comprises many different services, namely being an advisor, intermediary, as well as facilitating transactions.

He noted that the transactions segment of a bank is the most possible to digitalise and it is something that the big banks are currently doing very well.

“Banks can do a bit of remittance, credit cards and things like that, but if you go up the value chain of wealth management, it’s more advisory and more transactional, involving more bespoke and complex products. So, it becomes a little bit more difficult.

“Therefore, I think banks should make sure that they invest heavily in technology and build up to that,” he said.

Nevertheless, Lee stressed that the banking industry will remain a people business, despite the growing number of digital channels and capabilities it offers.

Meanwhile, Avaloq South Asia and Australia MD Gery Dachlan opined that technology’s greatest impact is on risk and compliance and wealth management needs to manage the risk of the bank and the clients.

He added that with the right technology platform in place, financial institutions can effectively scale and grow their business.

“It is also a valuable tool for bank’s relationship managers to deal with their multiple clients as they need to have the right tools to push the right information to them and also effectively manage their clients,” he said during the panel discussion of the roundtable.

NEC has been actively helping many financial institutions on its digital transformation journeys, propelled by the research and development (R&D) capabilities and industry experience of both Avaloq and NEC Group.

According to the technology solution provider, one key principle guiding both companies in the sector is the need for software platforms to be both robust and resilient in order to meet ever-changing and immediate regulatory requirements.

It said moving forward, future-proof platforms also need to be able to use next-generation technologies such as AI to control large amounts of data contained in various silos.

NEC and Avaloq also believe in the importance of openness, especially given the recent movements towards open banking in regions such as Asia and Europe.

It noted that open architecture enables wealth management service innovation by easily being able to add new features, such as personalised advisory information and user interfaces which utilise application programming interfaces.

“When combined, openness and a single data source enable financial institutions to offer a unique selling proposition while minimising traditional system integration and development costs at the same time.

“Overall, financial institutions will need to become increasingly client-centric in order to stay competitive and thrive in this rapidly changing industry,” it said.