A third of Malaysians will have digital-only bank accounts by 2025

About 4.7 million adult locals currently have a digital-only account.

An estimated 8.4 million or 37% of Malaysian adults are expected to have a digital-only account by 2025, according to a study by financial comparison platform Finder.com.

The survey, taken in March, revealed that an estimated 4.7 million Malaysians—or approximately 21% of the adult population—already have a digital-only bank account. A further 3.7 million more or 16% of the population are planning to open one in the next 5 years.

Malaysia currently has the fourth highest adoption rate in the 12 countries studied, behind only Brazil and Germany, where about 28% of their population have digital-only bank accounts. India followed with 22% of its population having a neobank account.

Further, the ongoing coronavirus pandemic will likely serve as a catalyst for the digitization of banking, noted Finder.com editor Elizabeth Barry.

“Restricted movement means that what was once forecasted for the next five years could be squeezed into a much shorter time frame,” noted Barry. “What isn’t clear yet is whether this will be a boon for virtual challenger banks or whether productivity issues as a result of the coronavirus could delay operations.”

In the short term, more collaboration between traditional banks and fintechs is expected, as banks scramble to service a spike of online customers, she added.

Meanwhile, India is expected to have the biggest percentage increase of those using neobank accounts, at 21% over the next five years. This is followed by Malaysia (16%), Brazil (16%) and the Philippines (16%).