Backbase’s APAC Digital Banking

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Kuala Lumpur, Aug 24: Backbase, a global leader in Engagement Banking, has launched an IDC Infobrief tailored to the APAC region.
The report, titled “Balancing Build and Buy for Customer-Centric Transformation in Digital Banking,” reveals that around 45 per cent of Malaysian CIOs prefer the adopt and build strategy to reduce risk while improving speed-to-market capabilities.
With insights from 125 banks and 316 CIOs across APAC, the report offers a regional perspective on digital transformation.
It delves into challenges faced by major financial institutions, especially the delicate balance between maintaining legacy systems and pursuing growth, while managing migration risks.
Riddhi Dutta, Backbase’s Regional Vice President for Asia, highlights fintech’s role in Malaysia’s thriving digital economy and emphasizes the need for banking modernization to achieve a customer-centric ecosystem.
The report questions the traditional in-house approach, revealing that 65 per cent of mid to large-sized APAC banks are internally building their engagement banking platforms.
However, 70 per cent of these projects encounter failure due to high resource demands and costs.
Furthermore, over 80 per cent of in-house-built digital engagement platforms with budgets over USD10 million fall short, failing to achieve the expected Return-on-Equity (ROE) in digital initiatives.

Ashish Kakar, Senior Director of Research for APAC at IDC.

Despite early digital transformation efforts, many APAC banks struggle to fully exploit digital benefits for compelling customer experiences.
Ashish Kakar, Senior Director of Research for APAC at IDC, notes the complexities of managing data layers and integration in in-house strategies.The report spotlights a gap between banks and customers, with offerings lacking differentiation.
It classifies medium to large-sized Malaysian banks in a ‘Legacy’ quadrant, indicating the need for new strategies.
Customers encounter obstacles like fragmented interfaces, non-unified portfolios, and prolonged onboarding processes.
Backbase’s Engagement Banking Platform provides a solution, adopted by over 150 innovative banks for accelerating customer engagement.
Its adaptability and customization tackle industry challenges, ensuring resilient banking systems.
The IDC Infobrief advocates the “Adopt and Build” approach as a practical solution.
Collaboratively adopting existing platforms can lead to 40 per cent faster time-to-market compared to full in-house approaches.
The approach is also 2.3 times more cost-effective.
Malaysia’s government-approved digital banks are expected to adopt similar strategies.
Ranked highest in APAC across key metrics, the “Adopt and Build” approach offers tangible benefits for expediting digital customer engagement with differentiation.

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