This article first appeared in The Edge Malaysia Weekly on May 31, 2021 - June 6, 2021

DIGITAL payment solutions are no longer a luxury, but a necessity during the Covid-19 pandemic. According to the latest statistics from Bank Negara Malaysia, e-payment transaction volume per capita in Malaysia reached 169.9 in 2020, representing a 13.5% increase from the year before. This trend is expected to continue in a post-pandemic environment, with local businesses increasingly favouring digital payments over physical cash.

Despite the challenging market conditions resulting from the pandemic in 2020, OCBC Bank (Malaysia) Bhd has continually invested in technology. In the past five years, the banking group had invested more than RM200 million in digitisation initiatives.

According to Chong Lee Ying, OCBC’s head of global transaction banking, these digitalisation efforts have played a critical role in the bank’s success within Malaysia. She says these efforts ensure that corporate clients and small and medium enterprises (SMEs) are given the necessary tools to succeed in the rapidly changing business landscape.

“The migration towards digitalisation is inevitable, as businesses further depend on digital solutions to offer greater convenience, speed and simplicity to address customer pain points,” says Chong.

“Furthermore, businesses that embrace digital solutions are much more resilient to stiff market competition. These solutions streamline many of their day-to-day operations, resulting in greater speed, better time management and, more importantly, the ability to allocate more human resources to revenue-generating activities.”

Chong further points out that OCBC Bank’s recent investments in technology have enabled local businesses, especially the retail sector, to continue operating as usual, and also conduct contactless payments and payment collections during the pandemic.

She says the government-mandated lockdowns and social distancing measures have placed many businesses in virtual isolation, away from many customers and other industry partners. Digital payment solutions have helped bridge the gap between business stakeholders, allowing them to continue their day-to-day operations through online platforms.

For example, OCBC Bank introduced the OCBC OneCollect app last year, facilitating cross-border merchant payments between Malaysia and Singapore. It is a payment collection service that facilitates local payments through DuitNow QR, and cross-border payments from Singapore through PayNow QR.

“Launched in March 2020, the introduction of OCBC OneCollect is timely as it allows merchants to enjoy fast payment settlements in their respective local currencies. This initiative alone has significantly benefited businesses that operate primarily in Johor, allowing them to continue selling their goods to Singaporeans during the pandemic,” says Chong.

In addition to facilitating cross-border payments, OCBC Bank also rapidly accelerated its integration with payment gateway providers to enable merchants to conduct online transactions.

According to Retail Group Malaysia, bricks-and-mortar businesses were heavily impacted during the pandemic, with an estimated 51,000 stores ceasing operations between the first Movement Control Order (MCO) and January 2021. To remain competitive, many brands have migrated online and are focusing on growing their retail presence on e-commerce platforms or on their own official websites.

Even prior to the pandemic, Malaysian consumers had made a rapid shift to online shopping. Between 2017 and 2019, the average annual online spend per Malaysian consumer almost doubled to RM2,004, according to a 2020 JP Morgan report.

To help local businesses leverage the growth of the e-commerce market, OCBC Bank has included FPX as an online collection tool and partnered with third-party agents to onboard online sellers to facilitate their transaction flows. Chong also highlights that OCBC Bank has been appointed as the main bank for PayNet, a subsidiary of Bank Negara, for its direct merchant settlement initiative.

“The pandemic has reshaped consumers’ shopping habits away from physical sites to online stores. Hence, we ensure that our merchants’ onboarding process is seamless, and we seek to help them reach a wider audience through the use of omnichannel payment gateways,” Chong says.

“Thanks to our partnerships, our merchant clients have quickly expanded their reach to a wider consumer base. They are no longer reliant on bricks-and-mortar stores but are selling to consumers through their mobile phones and computer devices.

“By assisting these businesses in their paradigm shift, they have witnessed a boost in sales and online traffic. These businesses are also much better equipped in terms of providing a better online shopping experience for customers and instilling brand loyalty.”

Other than the initiatives stated above, the bank also introduced a new software application programming interface (API) for credit notification. This has allowed businesses to easily reconcile their receivables, a long-standing issue for many companies that struggle with multiple collection methods, such as online transfers, cheques, cash and credit cards.

Chong also points out that the bank’s digitalisation efforts have not gone unnoticed. In March 2021, OCBC Bank was ranked as the bank with the best services in Malaysia in the 2021 Asiamoney Trade Finance Survey, under the Asian banks category. The survey received more than 11,000 responses from seven regions, with respondents asked to vote for their favourite trade finance providers.

Chong says OCBC’s status as a foreign bank with a strong regional footprint has provided it with a competitive edge within the Malaysian market. She explains that the bank’s international presence has exposed it to various customer segments, enabling it to leverage its accumulated experience and expertise.

“From our regional networks, we have learnt the different behaviours and needs within their respective market landscapes. Being a foreign bank with strong regional support, we are able to leverage and localise our services very quickly, by modifying and building on top of our existing digital services and solutions,” notes Chong.

“Despite the achievements, there is still a bit of catching up to do to improve on the end-to-end application proposition for all types of banking services, especially for SMEs. Our customers can rest assured that we will continue to invest in digitalisation and they can expect more improvements to come.”

Despite the global push towards digitalisation, many businesses still have reservations about fully committing to the digital ecosystem. Chong explains that one of the common misconceptions businesses have is that digital platforms are prone to cybersecurity risks.

“It is true that online scammers are taking advantage of the Covid-19 situation to prey on victims making the switch to online payments. However, we would like to assure them that the underlying system is not compromised,” she says.

“OCBC Bank has gone to great lengths to improve the bank’s online security features and create awareness of online scams. We are also actively working with external parties, such as the police, to educate customers through fraud and scam webinars, to keep customers well informed.”

Another misconception businesses have about digitalisation, Chong adds, is the high cost of implementation associated with it. She gives the assurance that OCBC Bank has established partnerships with third-party providers to improve speed and reduce costs and resources involved, translating into better value propositions for clients.

Rather than focusing on challenges, Chong highlights the opportunities present in digital adoption. She says adopting digital solutions significantly reduces the paperwork required in trade financing and transaction activities — which will have an environmental impact and help further companies’ sustainability efforts.

“Trade finance applications and transactions have traditionally been paper-based, which is not only tedious for customers to keep track of, but also takes them longer to submit the documents to the bank physically. Typically, customers apply for trade finance using physical forms, which they either fax or submit directly to the bank,” she adds.

“At OCBC, customers can submit their applications and sign digitally and submit the image or pdf of the supporting documents. These files will then be transmitted directly to our automated imaging workflow and processing system, which significantly reduces our carbon footprint in the process. Instead of mailing hard copies to customers, we also make our transaction advice available digitally via our corporate internet banking site.”

Going forward, Chong says the bank will focus its efforts on OCBC Velocity, the bank’s digital business solution which is accessible via web page or mobile phone. In its latest iteration, OCBC Velocity allows users to have a comprehensive overview of their company’s accounts, manage cash flow and operations, as well as manage the company’s billings.

She explains that OCBC Velocity is accessible to start-up companies and large businesses alike. It not only provides intuitive data visuals on the company’s cash flow but is also equipped with features for its day-to-day operations, such as sending e-invoices and optimising payables.

“While we have remained vigilant in looking out for our clients during this pandemic season, we will also continue to push forward our strategic priorities, including sustainable energy financing and digital supply chain financing, both of which are making good progress,” says Chong.

“Despite the challenges brought about by the pandemic and the ensuing MCOs, all of us here at OCBC Bank rose to the occasion and went the extra mile to ensure that our customers’ banking needs were not compromised but were instead complemented by convenient digital platforms and solutions.”

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