Liew Nam Soon was one of the speakers at the recently concluded ABF Retail Banking Virtual Conference.
Liew Nam Soon, managing partner of ASEAN Markets at Ernst & Young (EY), and is responsible for the business performance and client service across advisory, assurance, tax, and transactions.
He has over 26 years of consulting and industry experience in large scale business and technology transformation, as well as risk management and compliance. He has also worked extensively in retail, SME, private, commercial and investment banking, asset management, insurance, private equity, and fintech.
Nam Soon was also the EY Financial Services Asia Pacific Diversity and Inclusiveness leader. As one of the speakers in the recently concluded ABF Retail Banking Virtual Conference, Asian Banking and Finance spoke with Nam Soon regarding opportunities and challenges for global banks amidst the crisis, as well as the changes expected in the Asian retail banking landscape.
What are the main trends and shifts in Asia-Pacific’s retail banking sector in recent months. What has changed since the pandemic?
Disruption is creating opportunities and challenges for global banks. While the risk and regulatory protection agenda remains a major focus, banks must also address financial performance and heightened customer and investor expectations, as they reshape and optimize operational and business models to deliver sustainable returns. Innovation and business-led transformation will be critical for future growth. To remain competitive and relevant, every bank must embrace disruption and strategically build a better ecosystem — not a bigger bank.
The COVID-19 global pandemic will renew focus on operational resilience. Banks will need to adapt their approaches to changes in their operating model and ecosystem, which will require flexibility, ongoing communication and global regulatory coordination. At the same time, the pandemic has also accelerated digitalization and reinforced the importance of managing cyber risks.
Where do you see Asia's retail banking scene in the next five years?
Over the next few years, we expect to see many more changes in the Asian retail banking landscape, driven by advances in technology, loosening regulations, and competition among these companies and fintech disruptors. We expect a couple of key themes to dominate. One, markets will continue to deregulate. In Asia, financial regulators are taking on a role in addition to supervision: helping build a market that is still safe, or even safer, but much more flexible and encouraging of innovation. Second, digital bank competition will heat up. Bank regulators have approved or in the process of approving licenses across Hong Kong, Singapore, Malaysia, and the Philippines. We should expect to see more innovation in the areas of payments, lending, investments and insurance, more partnerships and the fleshing out of ecosystems.
What would be the challenges for retail banks in adapting to digitalization?
Incumbent retail banks are bracing for the kind of sophisticated and well-capitalized competitors in their immediate future. Their continued success will depend on how well they can disrupt their own businesses before these competitors arrive. These will include big tech and other enterprises with access to customers and technology. Retails banks have their work cut out for them to leverage partnerships or acquisitions in key sectors to obtain access to customers and build capabilities. The other key challenge is to address technology platforms that need to be able to support ecosystem partners to reach customers with products and services to improve the customer experience. Most incumbents are encumbered by legacy systems and they need to re-architect their platforms to be agile and scalable to be able to power digital ecosystems. This includes a clear strategy and roadmap plus the capex required to build the appropriate customer experience and service enabling layers using microservices, APIs, cloud, AI, and data architecture and governance.
Can you give a brief summary of your presentation in the ABF Retail Banking Virtual Conference 2020?
In ASEAN, we have seen accelerated growth of the internet economy and digital Financial Services off the back of growth in e-commerce, online travel, ride hailing and online media. COVID 19 has accelerated growth in e-commerce, OTT and consumer technology. The reality is that ASEAN offers immense FS growth opportunities, with much of the population underbanked or unbanked. Several areas of Financial Services are ripe for innovation–payments, lending, investments and insurance. The rise of non Financial Services players and BigTech has also accelerated the pace of change in the industry landscape. Banks should not underestimate the disruption from these players as they can disintermediate discrete FS propositions through partnerships with other FS players. Ultimately, Differentiation will come through products and services aimed at solving key pain-points. Finally, Financial ecosystems that win, are the ones that are able to incorporate all different services and are able to offer compelling customer propositions. In participating or orchestrating ecosystems, there will be the to work with key stakeholders – regulators, customers, investors, alliance partners and fintechs.
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