15 April 2020 – Neobanking is set to boom in Malaysia, with 37% of adults expected to have a digital-only bank account by 2025, according to new research from global financial comparison platform Finder.com.
Results of a survey conducted in March reveal an estimated 4.7 million Malaysians – approximately 21% of the adult population – currently have a digital-only bank account, with 16%, or 3.7 million, more planning to open one in the next 5 years.
Global fintech editor at Finder.com, Elizabeth Barry, says the COVID-19 pandemic will likely act as a catalyst for the digitisation of banking.
“Restricted movement means that what was once forecasted for the next five years could be squeezed into a much shorter time frame,” Barry says.
“What isn’t clear yet is whether this will be a boon for virtual challenger banks or whether productivity issues as a result of the coronavirus could delay operations.
“In the short term we could see more collaboration between traditional banks and fintechs as banks scramble to service a spike of online customers.”
Men are currently more likely than women to have a digital-only bank account. 24% of men are neobankers, compared to just 16% of women.
However, when taken into account those planning to open an account in the future, the gap widens. By 2025, 29% of women say they plan to have an online-only bank account, compared to 42% of men.
When it comes to age demographics, while most think of young adults as the most digitally savvy, only around one in five 18-24-year-olds (21%) say that they have an online-only bank account.
However, that number is set to jump to over a third (36%) by 2025. Currently, those aged 55-64 are the least likely to have a neobank account both now (14%) and in five years time (24%).
Compared to 12 other countries included in the report, Malaysia currently has the fourth highest adoption rate, behind Brazil (28%), Germany (28%) and India (22%).
India is expected to have the biggest percentage increase of those using neobank accounts (21%) over the next five years, followed by Malaysia (16%), Brazil (16%) and the Philippines (16%).
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