Today’s digital economy has changed how firms operate and has given them new opportunities. It has altered consumer behaviour and given them more power. And they are continuing to grow.
This is particularly true for Malaysia’s digital economy, where Red Hat recently highlighted statistics from their recent media briefing, titled “Overcoming Digital Hurdles for FSIs and Accelerating Digital Transformation.” According to these statistics, the sector is predicted to contribute to the nation’s GDP at a rate of 25.5% by 2025, up from 22.6% in 2020.
Additionally, FSIs are a critical enabler for the digital economy as 81% of internet users currently use digital services.
For instance, the COVID-19 pandemic outbreak has only served to underline the importance of online banking in our life and encouraged bank customers to seek various digital banking options rather than rely on traditional banking procedures.
Opportunity for Digital Banking
This just shows how important digital banking is in today’s world and that there is a huge opportunity for digital banks. One area where opportunity exists is in speed. The speed of innovation and time to market in the FSI sector, according to Tammy Tan, Country Manager for Red Hat Malaysia, can no longer be measured in years. It is currently in months or even days.
She also mentioned how banks need to focus on providing personalisation at scale and new customer experiences, and that being competitive in the FSI industry boils down to fast and secure onboarding whilst giving customers new and renewed experiences.
“This is where the new experience for the users will be very exciting,” she continued. “And how they are going to do it is when they actually bring down the cost to serve and the cost to actually go to market as fast as they can.”
Therefore, the best way to make these opportunities a reality is through open-source, combined with an open hybrid cloud – as they are a source of speedy innovation and agility for FSIs.
Albert Chai, General Manager for Red Hat RoSEA, claims that throughout the past 100 years, the banking industry has been one of the least flexible and innovative. He emphasised how innovation was once associated with “taking a risk,” which he claimed was unneeded and would be harmful to the bank.
Open-Source is the Foundation
“We [Red Hat and many organisations] today believe this could [change, with the power of] open-source community,” he added. Red Hat is one of the leading contributors to the Linux kernel and associated technologies in the greater open-source community. According to Albert, 30,000 remote developers add 30 million lines of code each year, demonstrating the power, speed, and agility of innovation that open-source can bring.
Even better, Red Hat’s open-source community supports the company’s most recent release of Red Hat Enterprise Linux 9, the industry’s top enterprise Linux platform. As the complexity and size of the IT landscape increase, Red Hat Enterprise Linux 9 serves as a common, reliable platform for hybrid cloud innovation, enabling partners to create and deploy any application across physical, virtual, private, and public cloud and edge environments to support customers with exceptional flexibility, consistency, and dependability.
With Malaysia transitioning as a country, Red Hat is here to continue to educate and collaborate with customers (fintech or traditional banks) to build a framework for their digital transformation journey.
One of Red Hat’s customers in Malaysia is the AmBank Group, which includes AMMB Holdings Berhad, one of the country’s leading banking companies. Red Hat assisted the AmBank Group in developing an end-to-end application to digitally onboard local small and medium-sized businesses (SMEs).
“One of the most interesting aspects of this is the new app is able to automate compliance processes such as credit, risk, and company checks – essentially minimising the number of physical interactions or branch visits,” said Albert.
Red Hat, says Tammy, “is not just a platform that can help you design something that is resilient and agile; we are also the connectors between the cloud and the on-prem and can actually provide [fintechs] with some resiliency.”
