Digital Innovation

Raja Teh MaimunahChief Executive OfficerHong Leong Islamic Bank

Chief Operating OfficerDigital Innovation & Transactional Banking | Hong

Leong Bank

a look of tomorrow

Everything evolves with time…

The evolution of trade, money & banking

Monte de Paschi (founded in 1472) is the world’s oldest bank still in existence, and has now also adopted digital banking

The modern banking era traced back to the early Italian Renaissance period

Trading & banking date back to the ancient days of Assyria & Babylonia – circa

2000BC

Milestones in the modern banking era

<17th Century 18th Century 19th Century

Bank Debts

Birth of regulations and first central bank

- Amsterdam

Goldsmiths and promissory notes in

London, which gradually became

bank notes.

Standardized printed notes with signatures

Clearing facilities, security investments,

cheques and draft protections

First overdraft facility introduced by The Bank of

Scotland

Fully printed notes which didn’t require signatures

Rapid growth due to Industrial Revolution

NYSE

Rosthschild & Baring saw their merchant banks

dominate the banking world

Methodologies & Institutionalization

20th Century 21st Century

US Federal Reserve

Charge Card (1928)

IMF & World Bank (1944).

Credit Card (1958)

ATM machines (1960s)

Home Banking – using keyboard, TV and telephone

(1981)

E-banking and SMS banking (1990s)

Non-FIs enter the financial community

(2001)

Global growth in Islamic Banking

iPhone (2007) = mobile banking applications

Merchant payments through mobile-generated

QR codes

Mobile money transfers

Cardless ATM withdrawals

Globalization, Technology & Self-Serve

Needless to say, digital banking adoption has a lot to do with the global growth in internet speed, accessibility and devices

‘96 ‘98 ‘00 ‘02 ‘04 ‘06 ‘08 ‘10 ‘12

INTERNETPOPULATIO

N100m 1b

INTERNETSPEED(Mbps)

1.5 105 50 100 200

YEAR

SMARTPHONEUSERS 100m 500m

Malaysia:

39%tablet penetration

On average,2 smartphones for every 9 people on earth

Malaysia:

140% mobile phone penetration

Malaysia’s Penetration:

63% smartphone

39%tablet

Malaysia:

63% smartphone penetration

>2.6b

>1b

>500

20mins-1hr 5mins 10mins 5-10mins 1-3 days 5mins1min 20mins-1hr

1min 2mins

It’s all with two things in mind – CONVENIENCE & PRODUCTIVITY

Transferring Money Receiving Money

with mobile / digital banking…

Banks’ digital brands – a different business approach vs. its conventional peers

What we’re doing at

OverallStrategy

digitization

digital products

partnerships& merchants

marketing &social media

Enabling and expanding Connect’s online banking capabilities across various digital platforms, with emphasis on innovation in mobility.

Development of online banking products to replicate offline banking offerings. Some online products will have enhanced benefits.

Continuous communication through advertising to educate consumers on Connect and its services, as well as promotions and acquisition campaigns

to increase adoption.

Value Creation via expansion of reach, increased usability and ecosystem enrichment

Tailored - User interface is customized and responsive to devices for better user experience.Holistic – usable across all operating systems and browsers.

Peer-to-peer Mobile Money Transfer function that allows

HLB Connect users to send money to a phone number, no

sharing of account details necessary.

Merchant payment function where customers can pay for their purchases using their

Connect Mobile app.

Connect Mobile app users can generate their own collection code on their mobile phones to withdraw cash from ATMs without using their ATM

cards

What does the future hold?

* Pwc research : Retail Banking 2020: Evolution or Revolution

Develop customer-

centric business models,

including social banking & commerce

Optimising distribution

Simplifying frameworks &

operating models

Enabling innovation & fulfilling the capability

requirements to foster it

Proactively managing risks,

regulation & capital

thank you

terima kasih