Alliance Bank launches open banking model to empower businesses, end-customers
Its Virtual Credit Card reduces environmental impacts and serves as a lead-in for the bank’s digital products.
The shift in consumer banking transactions from physical branches to digital platforms has led financial services company Alliance Bank Malaysia to achieve a phenomenal average growth rate of 112% from 2020 to 2022.
Whilst such a transition was quite straightforward for most banking services, there was a need to create a safe and secure digital channel for customers who were accustomed to physical interactions and for banking service staff to fulfil their banking and investment needs. This led Alliance Bank to launch its open banking solution Virtual Credit Card (VCC) embedded in the partners’ mobile app.
VCC is a fully digital solution that involves no paper, no plastic, and no physical cash for every part of its product offering: from application to approvals, fulfilments, transactions, and card management. The unique proposition of VCC is that it reduces the environmental impact, and that it is also a lead-in product for customers to access the Bank’s digital banking products.
The solution offers customers an environmentally friendly option as it is paperless and reduces the production of plastic credit cards. This is because all the steps can just be done via a mobile phone. This function has led to a 23% reduction in plastic cards despite the growing base of credit card holders.
Moreover, the VCC capabilities are also packaged into a zero-trust model software development kit (SDK) that can be easily embedded into partner’s mobile apps, empowering them to extend credit card facilities to their customers on their own platform, and providing a credit option payment for the products and services they purchase.
Alliance Bank’s SDK also makes it easy for the partners to enable in-app payments using the VCC, where secured payments can be done without the typical lengthy steps of keying and storing credit card details.
With a zero-trust model, partner merchants are shielded from credit card-related liabilities as the Bank would be solely responsible for all VCC-related data. Furthermore, the partners do not need to endeavour heavy investments in systems and infrastructures that contribute to their carbon emissions in order to extend credit card application and transactional services to their customers.
“The Bank continues to drive digitisation initiatives at the office to reduce paper consumption… Moving forward, we will continue to encourage our employees to adopt sustainable practices and minimise paper consumption,” the company said.
With increasing awareness and education through multiple channels, as well as partnership with digital players, VCC has shown positive demand, with 37% of Alliance Bank’s clients already holding the VCC just five months since its launch. The Bank aims to continue accelerating the acquisition and conversion of new clients to the use of VCC, with the aim of reaching at least 60% of the customer base within the next three years.
The impact of Alliance Bank’s VCC solution has been acknowledged by the ESGBusiness Awards, with the bank clinching the Initiative Award - Malaysia for Environmental Sustainability category win. The prestigious awards programme honours businesses that demonstrate outstanding commitment and achievement in environmental, social, and governance (ESG) practices, as well as those leading the way in building a sustainable future.
The ESGBusiness Awards is presented by ESGBusiness. To view the full list of winners, click here. If you want to join the 2024 awards programme and be acclaimed for your company's outstanding commitment and achievement in environmental, social, and governance (ESG) practices, please contact Julie Anne Nuñez at [email protected].
