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Is Malaysia's financial sector lagging in the cloud transformation stakes?

AvantiKumar | Aug. 7, 2017
Following the unveiling in Kuala Lumpur of a Forrester Asia Pacific study, Corporate Attorney Jarom Britton discusses some local FSI hurdles with Computerworld Malaysia.

cloud-computing (GraphicStock)

Credit: GraphicStock

 

  According to a new Forrester study, financial services organisations (FSIs) in Malaysia may be slower than their Asia Pacific counterparts in adopting digital transformation and cloud technologies.

Microsoft commissioned the Forrester study - 'Ensuring Agility And Trust In A Rapidly Changing Business Environment' - to see how FSIs in Asia Pacific were responding to the changing business landscape, said Forrester Research analyst Fred Giron and Microsoft's corporate attorney (Malaysia & SEA New Markets) Jarom Britton during the presentation of the research in Kuala Lumpur recently.

Giron said the study - involving 34 senior IT decision-makers in the Asia Pacific financial services sector from nine countries: Australia, Hong Kong, Korea, Malaysia, New Zealand, Japan, Indonesia, Singapore and the Philippines - paints a picture of these organisations "at vastly different levels of maturity in cloud understanding and adoption."
 
He further summarised this picture.  "Today the behaviour towards implementing cloud and the related internal policies among FSIs in Asia Pacific are clearly maturing. Cloud is increasingly seen as an enabler of the organisation's journey to digital transformation."
 
"But it is important to realise that a cloud strategy will only be successful if there is a clear understanding of applicable regulations," said Giron. "As organisations' understanding of regulations and of how and when to engage regulators increases, so too does their ability to successfully adopt competitive cloud solutions."

Microsoft - Forrester FSI study

Photo:  (From left) Jarom Britton, Corporate Attorney (Malaysia & SEA New Markets) Microsoft; and Fred Giron, Analyst, Forrester Research

Navigating regulatory and logistical demands

The findings, which looked into the impact of regulatory compliance, security and privacy, did indeed show that FSIs across Asia Pacific are increasingly embracing cloud computing - both public and hybrid, said Giron.

But can this journey be enhanced? One of the key insights from the research is that regulatory requirements may both steer as well as hamper transformational journeys for FSIs.

Jarom Britton commented that, "In today's digital ecosystem, organisations that do not evolve fast enough will be less competitive as they face disruptions in their respective industry from new entrants and overseas providers and many instances by non-traditional banking services."

Many organisations in the sector, especially in Malaysia, still lack a thorough understanding of how they can navigate regulatory and logistical processes, which slows cloud adoption and potentially puts these firms at a competitive disadvantage, he said.

More insights into Malaysia's FSIs

The study points to a 'wait and see' attitude for most FSIs, Giron added. Despite a strong interest in the technology, the pace of cloud adoption in Malaysia has been slowed by common misconceptions that there are regulatory barriers on the use of public cloud services.

Britton later told Computerworld Malaysia that "Two years ago, Malaysian FSIs, largely, were looking at cloud as an interesting concept but too found it either difficult or costly to implement in practice due to perceived regulatory and institutional challenges."

"Today, every FSI of significance is having regular discussions with us about cloud computing and transformation and several are already deploying cloud services," he continued. "They recognise the competitive necessity of transformation and are increasingly investing in doing the work needed to get there."
 
When asked about whether the splurge of transformation projects announced by many Malaysian FSIs in recent years would now see a slowdown, Britton disagrees.

"It is true that we have been hearing about transformation projects for quite a while and it may seem, at times, to be a never-ending process or meaningless buzzword," he explained.

"We do not see transformation as a one-off exercise - that once you do it you are 'done'. Rather, it requires a change in mind-set, to recognise that in the digital age, innovation is an iterative, constantly evolving process," Britton said. "Firms that embrace that change are the ones that will succeed."
 
He used an example. "The wire, or telegraphic, transfer was a game-changing innovation of its day and laid the foundation for multinational FSIs that still exist today. But the underlying technological advancement that enabled that revolution was the telegraph. Imagine how different the financial world would look today if we took adoption of the telegraph as an indication that the transformation was done."

So what of the near future? Britton discussed Bank Negara (Malaysia's National Bank) and its role in transformation. "While the modern financial services industry needs significant pragmatic regulations to ensure security and stability, Datuk Muhammad bin Ibrahim (BNM governor) has been clear in imploring FSIs to be more involved in shaping the banking ecosystem and not waiting for others to lead or for regulations to drive development."

 

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