Transforming Bank Islam's digital architecture, embracing open finance to better serve customers

KUALA LUMPUR: The appointment of Melvin Ooi, the former chief executive officer (CEO) of Ryt Bank – one of the earlier digital banks in Malaysia – as the chief technology and transformation officer (CTTO) of Bank Islam shows the bank's aggressive push towards digitalisation.

Ooi noted that transforming a 43-year-old legacy bank's digital architecture poses a unique challenge compared to starting a digital bank from scratch.

The architectural mandate requires continuous delivery so that customers experience immediate benefits rather than waiting years for a massive system overhaul, he said.

"After building a digital bank, the opportunity of transforming a legacy bank is too hard to resist," said Ooi. He was the founding CEO of Ryt Bank, a digital bank backed by YTL Group and SEA Ltd – two giants in their own rights in Southeast Asia's corporate scene.

In a greenfield project such as the Ryt Bank where he led between 2022 and Jan 2025, Ooi said he was given the freedom to chart the bank's infrastructure, as there isn't any legacy architecture that he needs to adhere to.

"But for us, with that 43 years of history with the customers that we have, with the things, the products that we have, you have to always look back and say, if I were to move forward, would I serve my customers better?" said Ooi in an interview with Business Times.

"So you have to rethink your architecture, that while you build, how do you also continuously deliver so that your customers see the benefits and want to be with you. And that continuous innovation has to be there," he said.

The driving force behind Bank Islam's modernisation is a commitment to the user journey. Recognising that today's consumers are brand-agnostic and gravitate toward frictionless platforms, the bank is overhauling its technological backend.

"Customer experience is at the heart of what we'll be focusing on. That, I think, is a true differentiator of the old Bank Islam and the Bank Islam moving forward," said its group CEO Datin Paduka Raja Teh Maimunah Raja Abdul Aziz.

Talking about Ooi's mandate, Raja Teh said it is about enterprise transformation, starting with foundational repairs, before moving on to complex structural overhauls. He is expected to repair the existing systems, and completely re-architect the bank's infrastructure.

Furthermore, Bank Islam is embracing industry-wide disruptions like Open Finance. Rather than protecting its legacy data silos, the bank sees data sharing as a strategic acquisition tool.

"So, there are always phases to open finance, and I think being the only Islamic bank in the pilot, obviously, to us, is very, very critical," said Ooi.

"It's not the part where we want to be a close follower (of open finance), but it is important that we are there, not just about data consumption, but also lending the data.

"Because to me, it's always important how do we serve our customers better? The customers are served better by having all their information, all the things that can be done in a very frictionless environment.

"If we can get that to them, it makes a lot of sense for them to continue to stay with you. And to us, it's how do we get that fast, and how do we ensure that the products that we can get out of it also make sense to them," said Ooi.

With the financial sector expanding in the digital era, the shift toward online transactions has driven a sharp increase in the volume of processed customer data.

Consequently, robust infrastructure is vital to support the secure access, sharing, and processing of this financial information—forming a crucial pillar for trust and resilience across digital financial ecosystems.

Open Finance is central to this effort, establishing a safer, more structured environment for data exchange than Malaysia's current arrangements. By placing consent at the core of information sharing, Open Finance gives customers direct authority to decide how their personal financial data is accessed and utilised.

This customer empowerment, combined with data-driven innovation, helps individuals make informed financial choices, encourages tailored service offerings, and fosters broader financial inclusion.

"Because no matter how big you are, or how long you have been in the business, the data that you have on a single customer sometimes is not that much, but the ability to aggregate the data gives a lot more (opportunities for hyper-personalisation)," said Ooi.

Moving beyond basic wealth tiering, Bank Islam is focused on executing "hyper-personalisation" over the next three years.

By leveraging deep customer data—including behavior, age, and lifestyle—the bank aims to present highly targeted financial solutions (similar to fast moving consumer goods or fintech marketing) rather than blindly pushing irrelevant products.

"With the ability to now, use the data, we have a lot of it, we'll be able to identify people within different segments.

"Not necessarily just about how much money you have with it, but your behavior, your age, gender, so over time, that's the next three years to develop that," said Raja Teh, adding that some banks have started to offer hyper-personalised rates or products.

"This is where we need to be. Banks will need to do that, because otherwise aggregators will come into the picture and then do that for you," she said