History of Banking Industry in Malaysia

The history of banking industry in Malaysia started way back to the 19th century.
Back then in 1867, it was during the British colonial emerged along the Straits
Settlement, surrounding Penang, Malacca and Singapore. British merchants’
communities were seen carrying out trading activities in Penang and Singapore. Due
to the strategic location and port facilities, Penang was then being identified as the
catalyst for banks. Charted Bank was the first to set-up in 1875, subsequently
followed by Hong Kong Bank in 1884. Both located opposite each other in Beach
Street.

During the initial years, a bank was an office with a big safe; it was called
“strongroom” in banking terms. There were no proper banking halls as what it has
now where customers and bank officers dealt with each other until 1930s. Slowly,
customers’ trust towards banks increases which saw the inflow and outflow of
banking transactions. Aside from businessmen and merchants, housewives started to
involve themselves in the banking industry as well. Continuous improvement on the
design and landscape of banking halls over the years resulted in what most of the
banks have today with their banking halls is as good as a hotel lobby. As time flies,
banks focus more on providing excellence customer service. One-to-one service is
being emphasized. Therefore, the crowds queuing in the banking hall turned smaller.

The evolution in technology gives impact to the banking industry as well. Tasks and
transactions that were carried out manually in the earlier years have reduced rapidly
as it started adopting computerization banking service in 1960s. It soon portrays an
upward trend on the use of technology in retail banking. The first automated teller
machine (ATM) was seen in Maybank’s Ampang Park branch in 1981. This further
reduces the crowds in the banking hall as it enables customers to make withdrawal
without queuing. As year’s passes with greater technology advances, apart from
having ATM in their electronic banking hall, cash deposit machines, cheque deposit
machines, and bank statements printing machines filled-up the remaining of the
spaces.

With the impact of technology expansion too resulting a paradigm shift in the
development of internet and mobile banking. Soon banks began to promote online
transaction continuously to consumers. In 2000, Malaysia consumers have their first
experience on internet banking when Maybank again steal the limelight by being the
first bank to roll out online service portal.

Malaysia’s banking industry has indeed gone through tremendous changes over the
last centuries, which gave a strong manifestation of the vitality and growth in local
banking practices.