In the past few years, digital and mobile banking have revolutionized the way consumers deal with their savings and bank accounts. Aware of the current revolution, more and more banks are leaving behind the old, traditional banking systems in favour of more interconnected financial solutions for their clients. E-banking services that are more sophisticated provide customers access to their accounts and allow them to make payments or apply for loans via electronic channels. Its features include electronic funds transfer for retail purchases, automatic teller machines (ATMs), and automatic payroll deposits and bill payments.
Over the course of the past 30 years, there have been considerable advancements made in the field of online financial services. According to Devlin (1995), the practice of functional demarcation was prevalent up until the early 1970s, when several regulatory limits were put into place.
The Internet is a relatively new channel for delivering banking services. Banking online has been around since the 1980s, when all you needed was a personal computer, a modem, and some software from a financial services provider. However, it was not well received, and most similar efforts were discontinued. The rapid expansion of other electronic services since the mid-1990s has piqued the interest of banks once more in Internet-based electronic delivery mechanisms. The bursting of the Internet bubble in early 2001 caused speculation that the opportunities for Internet services firms had vanished.
In Malaysia, the evolution started when the government took measures to strengthen Malaysia's banking system following the regional financial crisis in mid-1997. In 2002, all of Malaysia's local banks merged into ten "anchor banks," under the direction of the country's central bank, Bank Negara Malaysia (BNM). Beginning with the new directions of the Central Bank, the lifestyles of Malaysians have also altered, particularly in the use of mobile phones, which have facilitated the daily payment process by incorporating Mobile Banking applications into mobile phones. It can be seen based on available data as per below.
Percentage of households with access to ICT services and equipment, Malaysia, 2020-2021
Based on the facts presented, mobile phone access would have the highest proportion at 99.6%. Mobile is quickly becoming the preferred digital channel, meant to replace not only traditional banking but even online adaption, and mobile banking will finally surpass internet banking in terms of subscribers. In the coming year, the following trends will play a significant role in mobile banking. Due to the rising demand for digital channels, there are numerous reasons why businesses cannot disregard mobile banking. The transition to mobile banking is already taking place, and the mobile banking industry is only projected to increase from year to year as it continues to permanently impact the way individuals manage their finances.
Words by Noorhidayah Sallehuddin