The rise of digital communication and messaging apps has changed the way customers interact with businesses in general. The banking and finance sector has been one of the most adaptive industries to these changes and demands.

It has undergone its own form of digital transformation with the introduction of messaging apps and mobile conversational banking.

This is causing traditional Banks and Financial Service Institutions (BFSI) in Malaysia to adopt new messaging channels and adapt to new trends in order to follow the steps of fintechs that run on rapidly growing technology.  

From customer engagement to service delivery and beyond, we explore conversational banking, its benefits, and how the current messaging trends are transforming the BFSI sector in Malaysia.

Consumer messaging trends are poised to reshape the future of Malaysia’s BFSI sector, offering new avenues for customer engagement, seamless service delivery, and personalized experiences.

Businesses in Malaysia’s BFSI sector have increased their adoption of messaging channels in 2022 compared with 2021 according to our Messaging Trends 2022 report. Here’s how:

Messaging apps, including WhatsApp, Viber, and Apple Messages for Business, make digitizing banking services very easy. With real-time, one-on-one, two-way communication, customers can complete their regular banking activities on the channels they use with family and friends.

In fact, WhatsApp is the most popular messaging app in Malaysia, with a penetration rate of 82%, followed by Facebook Messenger and WeChat at 73% and 26% respectively. At such a high level of penetration, the surge in consumer messaging usage will inevitably shape the future of Malaysia’s BFSI industry.

This trend is bound to increase as financial institutions will need to adapt to consumers changing digital consumption behavior. By capitalizing on these trends, BFSI institutions can leverage AI-powered chatbots, harness data-driven insights, and prioritize regulatory compliance and security.

From customer engagement to service delivery and beyond, we explore the few areas that will shape the sector and how it can continue to tailor to customers.

Consumer messaging trends offer BFSI institutions in Malaysia a unique opportunity to engage customers in a more personalized and convenient manner. Messaging platforms such as WhatsApp, Facebook Messenger, and WeChat have become abundant, with Malaysians increasingly relying on these channels for communication.

Our Messaging Trends 2023 report found an increase in WhatsApp interactions in banking and finance by 107%, while mobile app messaging interactions in retail and e-commerce have doubled.

BFSI institutions can leverage these messaging platforms to establish direct and real-time communication with customers, providing instant support, personalized recommendations and tailored product offerings in this era of conversational everything.

Brands using omnichannel communications platforms will be able to streamline their engagement with customers, enabling efficient turnaround and therefore reducing response times, and stand to benefit from customer loyalty and, ultimately, stronger sales.

The adoption of consumer messaging platforms enables the financial industry to offer seamless service delivery across multiple touchpoints. Customers can initiate conversations on their preferred messaging app and seamlessly transition to other channels, such as mobile apps or web chat, without losing context.

For context, according to Digital Influence Lab, 97% of Malaysian internet users used the internet in 2021 for chat applications, while the mobile banking transactions volume in Malaysia reached 1.47 billion that year, an increase from 935 million transactions in 2020.

Combining these two insights, this shift towards mobile internet usage highlights the importance of mobile-centric messaging platforms in reaching and engaging with customers in the BFSI sector.

For example, a customer might start a conversation with a chatbot on Facebook Messenger to inquire about credit card promotions. The conversation can then be seamlessly transferred to a banking app, allowing the customer to complete the credit card application process without the need to repeat themselves.

This streamlined experience enhances customer satisfaction, reduces friction and improves overall service delivery.

Artificial intelligence (AI)-powered chatbots and virtual assistants play a pivotal role in leveraging consumer messaging trends in the BFSI sector. These intelligent systems can handle a range of customer inquiries, from balance inquiries and transaction history requests to basic financial advice.

Chatbots can provide customers with instant responses and guidance, helping them navigate common banking tasks and simplifying complex financial transactions. They can also perform tasks such as bill payments, fund transfers and account management, making banking processes more convenient and efficient for customers.

CIMB, for example, has introduced a commercial Natural Language Processing (NLP) powered chatbot dubbed EVA, for small and medium enterprise customers. The trend of using AI, especially with chatbots, is increasing in the BFSI sector, especially those institutions that deal with customers all the time.

In addition, BFSI businesses can explore professional services offered in the form of a conversational chatbot design, enabling them to develop and customize a chatbot specific to their business solutions.

This type of service also helps businesses minimize the time taken to deploy a chatbot while ensuring that it can deliver an optimal customer experience for maximized business results.

Consumer messaging trends generate large amounts of data that BFSI institutions can leverage to gain valuable insights into customer behavior, preferences, and pain points. By analyzing this data, banks can offer personalized recommendations, targeted marketing campaigns, and tailored product offerings.

For instance, if a customer regularly enquires about travel insurance through a messaging platform, the bank can proactively send customized travel insurance plans and promotions tailored to the customer’s specific needs.

This level of personalization not only enhances customer satisfaction but also increases the likelihood of conversions and long-term loyalty.

While embracing consumer messaging trends, BFSI institutions must prioritize regulatory compliance and security. Compliance with regulations such as the Personal Data Protection Act (PDPA) is crucial to protecting customer data and ensuring its secure handling and storage.

In addition, stringent security measures must be implemented to safeguard sensitive financial information and prevent unauthorized access. Encryption, secure connections and multi-factor authentication are vital components of a secure messaging ecosystem, ensuring customer trust and confidence in the BFSI sector.

As Malaysians increasingly turn to messaging platforms for their communication needs, BFSI institutions must adapt and embrace these channels to meet customer expectations, remain competitive and deliver exceptional conversational experiences.

The more a customer interacts with their bank through these conversations, the more a bank understands the customer’s preferences, habits, and needs – making it easier to personalize future transactional and promotional messages.

Through conversational banking, banks can lead customers through their entire financial journey over their favorite channels and chat apps and create personalized interactions to enhance the banking experience.

The benefits of conversational banking using chat apps are based on letting your customers reach you whenever and wherever they want. This level of convenience builds the trust required for successful long-term client-bank relationships.

Conversational banking using AI brings many benefits to banks, fintech, payment processors, and other financial institutions through:

The future of Malaysia’s BFSI sector lies in leveraging consumer messaging trends to build stronger customer relationships, improve service delivery and drive innovation in the digital landscape.

Our platform allows you to scale as you grow and expand your digital services with multiple banking use cases – from customer support, sales, and marketing, to improve engagement, increase retention, and upsell products throughout the entire customer journey.

With our SaaS solutions and CX consulting, banks can maximize their use of messaging channels by:

Our CX consultants are here to help you reach your full digital potential on popular messaging channels and chat apps. Banks and financial institutions that offered their services via messaging apps with Infobip were able to increase efficiency, reduce costs, and continue to improve customer satisfaction – all on a single platform.