As the Malaysian banking landscape continues its steady push toward digitalisation, Hong Leong Bank (HLB) has positioned itself as a tech-forward player, making calculated moves across AI, digital platforms, and business banking innovation. FY2024 marked another year of financial stability and digital milestones for HLB. The pace and depth of its transformation raise broader questions about the road ahead in an increasingly competitive digital banking environment.

In July 2023, HLB welcomed Kevin Lam Sai Yoke as its new Managing Director and CEO. Formerly with UOB, Lam brought over 30 years of experience in digital banking and regional leadership, quickly setting a new course for HLB. Since his appointment, Lam has driven HLB’s digital transformation, enhancing platforms like HLB Connect and launching innovative tools such as HLB Wallet+. Today, 94% of retail transactions are conducted digitally, reflecting his push toward a seamless, mobile-first experience.But his leadership extends beyond tech. Lam’s focus on financial inclusion has led to standout initiatives like HLB@Kampung—transforming Sekinchan into Malaysia’s first cashless village—and HLB DuitSmart, which has reached thousands with essential financial literacy.

Financial performance

HLB posted a 9.9% YoY increase in net profit after tax, reaching USD 960 million (RM4.2 billion) in FY2024, up from USD 870 million (RM3.82 billion) in FY2023. This was supported by:

• Total assets rising 6.4% YoY to USD 67.76 billion (RM297.8 billion)

• Gross loans and financing growing 7.3% to USD 44.35 billion (RM194.9 billion)

• Customer deposits increasing 4.1% to USD 50.15 billion (RM220.4 billion)

• A steady ROE of 11.8%

• Gross Impaired loan ratio stood at 0.53%

The numbers reflect disciplined financial management and effective risk controls. rGrowth appears largely incremental rather than breakout, suggesting a mature institution maintaining course rather than redefining it.

HLB connect app upgrade

One of the bank’s key digital assets, the HLB Connect app, received functional and interface updates in 2024. Notable additions included:

• Auto-detect biometric login

• An updated forex rate converter

• Consolidated dashboard for payments and transfers

These features contribute to a more seamless interface, though they mirror developments already standard in many regional fintech and neobank offerings.

The bank claims that 94% of retail transactions are now completed through digital channels. However, transaction volume alone doesn’t necessarily reflect digital engagement quality or retention.

Generative AI

HLB made headlines by launching Malaysia’s first Generative AI-themed hackathon, the sixth edition of its “Can You Hack It” series. With over 340 participants (more than half being students), the initiative aimed to explore:

• AI-driven customer service

• Personalised banking journeys

• Virtual financial assistants

While forward-looking in theme, the outcomes of the hackathon are yet to materialize into mainstream products. The question remains whether such efforts are innovative theatre or part of a longer-term strategic product roadmap.

SME banking and halal economy

HLB has consistently emphasized its focus on the SME sector, which remains underbanked in Malaysia. The 2024 introduction of BizHalal, a Shariah-compliant digital finance platform, is one such example.

• BizHalal offers financing and advisory services to businesses in the Halal industry.

• Delivered through HLISB (Hong Leong Islamic Bank), with digital onboarding and advisory support

It’s a niche move that targets a growing economic segment, but its success will hinge on scale, ecosystem partnerships, and how well it’s integrated into SME workflows.

Branch modernisation

HLB’s launch of its first “Iconic Branch” in Penang is a step toward a “phygital” hybrid model. The branch combines:

• Café spaces

• Event exhibitions

• Priority banking lounges

Progressive in concept, it’s unclear how such branches align with cost efficiency and customer acquisition goals. There’s limited evidence so far that such branch models significantly boost engagement or revenue beyond traditional formats.

Wealth management

In a bid to connect with retail investors, HLB launched a few notable initiatives in 2024:

• Wealth Symposiums in Kuala Lumpur and Penang

• The “Market Matters with HLB” podcast series

• Investor surveys on financial behavior

These are low-cost, scalable awareness tools. But their impact will likely remain limited unless they’re tied into a more robust digital advisory or robo-investment experience, areas where competitors are moving faster.

Adoption metrics

According to the bank:

• Retail internet and mobile banking users grew 10% and 14% YoY, respectively

• Business mobile banking usage jumped 31% YoY

• Over 145,000 business customers are now connected digitally

These are promising figures. However, most of HLB’s digital services, transaction processing, forex tools, and onboarding are becoming hygiene factors. Differentiation will come from ecosystem integrations, API-driven platforms, and real-time insights for user areas where the annual report offers limited visibility.

What to watch in 2025:

HLB enters 2025 in a relatively strong position, but some inflection points are worth monitoring:

• Will AI move beyond the pilot stage? Early adoption is promising, but real value will come from embedding AI into core services like lending decisions, fraud detection, and customer service.

• Can HLB scale beyond Malaysia? Its presence in Singapore, Vietnam, Cambodia, and stake in Bank of Chengdu offer room for growth, but cross-border execution remains a hurdle.

• Will the bank adopt a platform model? To stay competitive, HLB may need to shift from product-based banking to embedded finance models where banking lives inside ecosystems (e.g., e-commerce, logistics).

A bank in transition to techCo, but not yet transformed

Hong Leong Bank’s 2024 results show a bank that is steady, strategically cautious, and digitally inclined. Its initiatives, ranging from AI hackathons to digital SME platforms, signal the right intent, but the real challenge lies in speed and execution depth.

As digital banking matures, the winners will be those that move beyond interfaces and apps, toward embedded, intelligent, and real-time experiences. HLB has the foundation it now needs to accelerate toward that future.