KUALA LUMPUR: International Data Corp (IDC) Malaysia said banks with traditional payment business models will lose about 8% to 15% in revenue from 2015 to 2020, driven by a shift in the banking and payment services environment.

Ho Sui-Jon, market analyst for IDC Financial Insights, said banks in the Asean (Association of Southeast Asian nations) region will experience the first signs of an ecosystem-riven critical decline in revenue from 2015.

“This change is driven by two factors. First, the disintermediation of formal financial services institutions (FSIs) by retail, particularly e-commerce players, as well as technology services providers, notably carriers and device manufacturers,” said Ho at IDC Malaysia’s presentation of its predictions for the local ICT industry in 2015.

He said the most relevant methods of payment post-2015 would stem from strategic partnerships that leverage on the comparative advantages of formal FSIs, retail players and technology services providers.

The second factor that will cause lower revenue, which will also be a catalyst for Malaysian FSIs to revise their strategies, is the innovation within the regional banking industry, said Ho.

“Combined with the solidification of the Asean Economic Community (AEC) charter, locally bred super-regional banks will be driven to diversify their payment propositions and align them with the economic context of each country in which they operate,” said Ho.

On the AEC, which is to be implemented by December, IDC Asia/Pacific managing director Jim Sailor (pic) said the implementation of the initiative will be regarded as a priority by businesses and governments alike.

Sailor said the transformation is already happening with countries across Asean already meeting 82.1% of the AEC targets in terms of integration, while Malaysia is slightly ahead at 88%.

This article first appeared in The Edge Financial Daily, on February 11, 2015.