Backbase, a global pioneer in engagement banking, announces the APAC-focused IDC Infobrief, “Accelerating Customer-Centric Transformation by Balancing Build and Buy – A Collaborative Approach Towards Sustainable Digital Banking Architecture.” The report reveals that nearly 45% of Malaysia’s CIOs favor the adopt-and-build approach, balancing risk management and speed-to-market.
Based on insights from 125 banks and 316 APAC CIOs, the report emphasises Malaysia’s banking landscape, addressing challenges such as legacy system maintenance amid growth pursuits. It highlights concerns around disruptions and operational risks during migration.
Riddhi Dutta, Backbase’s Regional VP, Asia, noted that financial technology is pivotal to Malaysia’s digital economy growth, driven by Central Bank initiatives and incumbent banks’ modernization for a customer-centric financial ecosystem.
The report challenges the prevalent in-house approach, revealing that 65% of mid-large APAC banks built engagement platforms in-house for digital transformation, but 70% of these projects failed due to cost and time issues.
Notably, 80% of in-house built platforms with budgets exceeding $10M underperform in digital initiatives.
Despite early digital transformation, many APAC banks struggle to deliver compelling digital customer engagement. The report emphasises the complexities of in-house implementations, favoring a collaborative approach for speed and scalability.
The IDC Infobrief underscores the disconnect between banks and customers, especially in offering “me-too” products. Malaysia leans towards the “build” approach within the ‘Legacy’ quadrant, reflecting traditional IT focus rather than transformation.
Customers face challenges like disparate interfaces and lack of unified portfolios. Backbase’s Engagement Banking Platform is cited for its ability to accelerate differentiated digital customer engagement.
The report advocates the “Adopt and Build” approach, emphasising collaboration and platform advantages over in-house building. New digital banks in Malaysia are likely to adopt this strategy.
The “Adopt and Build” approach outperforms “Build” and “Buy” options across key metrics, driving accelerated and differentiated digital customer engagement.
The IDC Infobrief is one of two guides by Backbase, offering pragmatic guidance for effective platform strategies.
To access the IDC Infobrief, click here.
