WHAT the robust digital transformation in Asia over recent years shows is that constant change is the only constant. Specifically, for financial services organisations, the widened access to banking has highlighted the hypercompetitive nature of the business environment they operate in.

In Malaysia, for instance, the volume of internet banking transactions more than tripled from around 449 million transactions in 2016 to more than 1.5 billion in 2022. Recognising this, Bank Negara Malaysia has issued a five-year plan to modernise the country’s financial sector, with strong emphasis on digitalisation.

This can all be very daunting for traditional players. The simultaneous emergence of modernisation policies and frameworks, along with the entrance of digital-native upstarts in the marketplace, is certainly an unenviable position to be in. However, established financial services providers can stay relevant in the face of these changes by striving to understand their customers deeply.

At the heart of financial services is the relationship between providers and their customers, chiefly trust, ease of use and personalisation. Digital transformation has not changed that. What has changed is how providers interact with customers, mainly via the emergence of new channels that have cropped up as a result of the arrival of digital banking.

While improving processes to better navigate regulatory complexities is important, it should not be viewed as separate from increasing customer value. Indeed, refining workflows will undoubtedly result in better compliance and customer satisfaction simultaneously. Big data is essential in this regard, with its growth offering numerous pathways for the business to deepen knowledge of target markets and demographics. Through information on preferences, needs and behavioural patterns, financial services providers can deliver new products and services to customers where they are most in demand.

To meet these ever-growing demands, the approach must be to move away from target group management in favour of targeted expectation management. And this hinges on holistically managing all information at the business' fingertips, with a unique approach that integrates state-of-the-art methodologies and technologies. Financial services providers that implement modern technology stacks will be in a position to leverage data analytics from data sets and gain a more comprehensive understanding of their customers.

But while digital transformation grows apace, data-centricity remains a challenge. An EY report notes that though data and analytics constitute the second-highest investment area for the region’s financial services industry, a mere 8% describe themselves as data-centric.

Customer lifetime value is hardly uncharted territory for the typical financial services executive in Malaysia. As customers' financial needs change with time, providers know that they can retain their trust and confidence if they evolve with these changes to meet the changing financial needs over the span of their lives. However, actually doing this rests on being nimble and agile enough to meet customer demands quickly and responsively.

To realise the added value for their customers and themselves, providers need to create an ecosystem that enables close collaboration and seamless data sharing across all departments. Without this, the ability to carry out the operational and analytical mapping needed to solve the complexities around customer processes will be out of reach. Businesses can begin this process by first reviewing their technology stack. 

Many organisations are considering — or already have — invested in a modern customer relationship management system, but this needs to be done with process management and application integration in mind. A failure to bring together the myriad of tools and solutions across your digital architecture can result in an environment fraught with disparate applications that end up working at a subpar level.

To ensure the business is not saddled with technical debt and reduced returns on information technology spend, leveraging a cloud-native integration system — or integration platform as a service (iPaaS) — can be the glue that connects each department and their systems, so that the entire organisation is connected.

Through iPaaS, providers will gain added agility due to the ability to connect legacy systems with cloud applications. By easily and quickly building interoperability across their digital architecture, financial services providers can navigate disruption with little fuss.

All this is possible because cloud-native integration platforms unify data across the organisation. Not only does this represent a boost to analysing profitability, risk management and customer service, but it allows legacy infrastructure to be modernised.

In fact, findings from a recent EY report suggest that Asia-Pacific financial services providers can set themselves apart from the pack through many of the benefits iPaaS provides. 

The report found that, out of all sectors in the region, financial services were the most hampered by their efforts to migrate legacy architecture and integrate multiple systems. Those quick enough to circumvent this hurdle via effective iPaaS will stand out from the crowd, and do it at a fraction of the time and cost traditional integration can provide.

Modern middleware was designed specifically to better equip organisations to navigate disruption, and Malaysia's financial services industry should consider how adopting such solutions will help it anticipate new challenges, which have surged in frequency and impact. 

At the end of the day, customers want to know that their banks can be with them as their financial needs shift and change. This in turn highlights the fact that the key to success rests on meeting customers where they are across their financial lifespan, which is only possible by having the tools to unearth insights that allow the business to grow with its customers.

David Irecki is the director of solutions consulting for Asia-Pacific and Japan at Boomi, which specialises in integration-platform-as-a-service, application programming interface management, master data management and data preparation.