Rising deposits cost, war on talent seen as threats following digital banks' entry — Affin Bank

Datuk Wan Razly Abdullah Wan Ali (Photo by Kenny Yap/The Edge)

Datuk Wan Razly Abdullah Wan Ali (Photo by Kenny Yap/The Edge)

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KUALA LUMPUR (May 19): Affin Bank Bhd on Thursday listed two "threats" namely related to cost and talent following the entrance of digital banks in the country recently, spurring competition in the banking sector.

"The two big threats we would get from the digital banks are basically on our cost of deposits that would raise our costs and the war on talent. [Additionally,] our people could and may leave and join these new entrants to the market," said Affin Bank's president and chief executive officer Datuk Wan Razly Abdullah Wan Ali at a press conference in conjunction with the official collaboration of AFFIN x MYTHEO on Thursday.

"So the scarcity of talents especially in the technology field is limited and we want to trace as many as we can get and train more, besides preserving them," he added.

He also noted that the bank has always been on a journey to accelerate its digitalisation efforts, having the need to evolve to become more "instant" in its service and product delivery.

Last month, Bank Negara Malaysia announced the five successful applicants for the digital bank licences, comprising the consortiums of Boost Holdings Sdn Bhd, an Axiata subsidiary, and RHB Bank; GXS Bank Pte Ltd and Kuok Brothers Sdn Bhd; Sea Ltd and YTL Digital Capital Sdn Bhd; AEON Financial Service Co Ltd, AEON Credit and MoneyLion Inc; and one led by KAF Investment Bank Sdn Bhd.

Meanwhile, the collaboration entered into on Thrusday — the first of its kind between Affin and robo-advisory service provider Gax Md Sdn Bhd — would allow new and existing customers of Affin AVANCE, a segment which is specially created for the tech-savvy and on-the-go professionals, to accumulate wealth by leveraging investment algorithms.

MYTHEO, which is licensed by the Securities Commission Malaysia, would help customers diversify their investments across the global market and fully automate their portfolio rebalancing depending on the market conditions.

According to Affin, MYTHEO's fully automated portfolio maintenance capabilities which are critical to producing high long-term investment performance provide advantages such as low to zero entry and no hidden charges.

Besides that, Affin said it has the widest portfolio exposure across multiple asset classes globally — up to 30 exchanged-trade funds (ETFs) are in the portfolio combination to achieve diversification versus only approximately eight ETFs compared to the industry.

Wan Razly noted Malaysia's mass affluent category is performing exceptionally well, with an upward growth trend, and that there is an increasing demand for more convenient avenues to invest.

"This is also one of many things to come from Affin Bank and the group where we offer more advanced and leading digital propositions to our customers.

"We want to evolve to be a competitive player in terms of the digital landscape and to challenge the digital banks and also the traditional banks in our digital offerings," he added.

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