Reporting by the Banking Insight Editorial Team

As emerging financial technologies reshape the banking landscape, Gurdeep Singh, CB, Deputy Chairman of AICB’s Chief Credit Officers’ Forum and Regional Head of Retail Risk at CIMB Bank Bhd, weighs in on the challenges and opportunities that have shaped his perspective as a risk professional, how these values resonate with markets, and why he believes banks continue to be a force for good in society.

Q: Given your illustrious career in banking, what have been some of the highlights that have kept you in the sector?

In my banking career of 20 years, I have worked in two banks across two countries, and have seen two major economic crises. Considering, banking was never my career aspiration at the start of my tertiary education, it has been an interesting journey so far.

The best learning experiences in risk management are usually during a crisis. From a risk management perspective, it was an extremely challenging and satisfying experience navigating through the Covid-19 pandemic. Helping our borrowers during the pandemic, while safeguarding the bank, was a fulfilling experience, especially given that the events unfolding at the time were unprecedented. It helped emphasise the vital role that banks play in advancing the customers’ needs and society’s as well as in fostering greater economic empowerment.

Professionally it has been a satisfying journey – from learning the nitty-gritty of retail risk management at the beginning of my career to being in a position where I can shape things and influence decisions while adapting to new trends. Along the way, I have had numerous learning opportunities to enhance my technical skills to help me do a better job and adapt to new technologies as the banking industry evolves. I have also had the privilege of working under visionary leaders and excellent colleagues.

In the last 20 years, as the banking industry has evolved, so has the regulatory landscape; forcing banks to adapt to remain competitive. Banking is again at the precipice of change, with digital challengers coming in to compete with traditional banks. I continue to do my part to ensure CIMB Bank remains competitive in this changing landscape. I am pleased that the learning opportunities continue, ensuring that things do not get mundane.

One thing which has remained constant throughout my career is that banks continue to be a force for good and are vital for the community at large.

Q: As Deputy Chairman of the AICB Chief Credit Officers’ Forum, how do you see the Institute pivoting in its role to strengthen and equip credit professionals for the decade ahead?

Continuous lifelong learning is the only way to keep up with current trends and helps an individual to be present and current. In this regard, AICB offers a wide array of programmes to ensure the banking workforce in Malaysia is constantly being upskilled and prepared to handle the challenges of the future. AICB has updated and revamped its programmes and curricula to meet the needs of the banking industry. The Institute will continue to play a critical role in keeping the banking talent up to global standards, to ensure the Malaysian banking sector stays robust and resilient.

The programmes range from basic courses to advanced programmes like the Chartered Banker, catering to the needs of those who are at the beginning of their banking careers, as well as those who have a considerable amount of experience in the industry. This also helps to overcome the talent shortage seen in the industry.

Apart from the various programmes, the AICB, as the coordinator of various industry forums – such as the Chief Risk Officers’ forum, Chief Credit Officers’ forum, Chief Information Security Officers’ forum – brings together bankers to discuss common concerns and issues as well as emerging trends in the banking industry. These forums also facilitate discussions with the central bank on key concerns, and seek clarification on various regulatory guidelines. Additionally, external experts are brought in to share ideas about new trends and themes in banking, including consultants brought in to share best practices around climate risk management, advance analytics, and other core issues.

The Institute will continue to play a pivotal role in the improvement of the banking industry in Malaysia.

Q: What do you predict to be the next three big trends in the risk and compliance sector?

AI-powered risk analytics will continue to expand rapidly. Data is the currency of 21st century, and banks are sitting on a treasure trove of data which has not been fully utilised yet.

Advancements in computing technologies have led to maximising the potential of this data. AI or machine-learning models are being leveraged to improve risk management capabilities. This trend will continue as banks continue to digitise processes and gather more data points to better understand and analyse customer behavioural patterns.

As banks work towards hyper-personalisation of banking services, risk management plays a crucial role to help banks achieve this goal, i.e. by leveraging all available data and capabilities to analyse the data and creating a risk profile of every individual customer.

Along with this, adoption of generative artificial intelligence (Gen AI) will also gather pace; Gen AI has huge potential to which the banking industry can tap in order to extract higher cost efficiencies by leveraging on these technological innovations. Gen AI expertise will become the de facto expectation of the workforce, akin to what happened 20 to 25 years back when the use of computers picked up in banking – it will not be a ‘good to have’ skill set; rather it is a ‘must have’ skill set.

Cybersecurity risks will continue to rise. As banks deploy more technology, gather and store more data, they need to invest more to manage cybersecurity risks. Criminal elements are also evolving to be more sophisticated and leveraging new technologies to exploit vulnerabilities. AI-driven cyberattacks can exploit vulnerabilities in real time. AI tools like deepfake will enhance phishing attacks, allowing for highly customised and convincing scams/hoaxes. Autonomous malware can be created and deployed that evolves without human input, making detection and safeguarding much more difficult. Interconnectivity of systems will impact banks with issues which perpetuate outside of the banking industry, exposing them significantly. Reliance on third-party vendors exponentially increases this risk, as the whole ecosystem is only as strong as its weakest link. Higher standards of cybersecurity will have to be enforced upon vendors who provide services to banks.

Staying on the AI track, the third trend I foresee is also along similar lines. Banks continuously face pressure to comply with evolving global anti-money laundering and counter-terrorism financing regulations. Banks are expected to use advanced tools to identify and monitor suspicious activity, making real-time detection critical. Banks are turning to AI-driven analytics and machine learning to help them automatically flag and detect suspicious transactions, reducing manual effort and boosting accuracy and efficiency. Again, the abundance of available data will help automate real-time suspicious transaction detection, reduce false positives, boosting efficiency and improving throughput.

Q: Whilst banks are seeing tremendous growth and challenges on the horizon, they are experiencing a shortage of talent to fill these future roles. Your thoughts on what is needed to recruit future talent, especially in technically demanding roles such as risk.

With the emergence of fintech firms and digital banks, traditional banks are seeing higher attrition as well as difficulty in attracting new talent. Ensuring an employee experience and work culture that is on par with what tech and fintech firms have to offer will be critical to closing the banking talent gap.

Banks play a critical role in our society and need to highlight their existence as a ‘force of good for society’. This will resonate with the next generation of workforce. Young professionals rely heavily on technology and in a socially and culturally aware world, a more inclusive vision of the banking industry is required in order to attract and retain future talent. Employee well-being is also a key consideration for the younger generation to decide on a potential employer.

Banks need to expand their internship programmes, to give the next generation of workforce an exposure to working in a bank so that they will remain interested in banking as a career of choice. At the core, a banking career continues to be an attractive proposition; the non-monetary aspect and experience of working in a bank needs to be enhanced to address the needs of the next generation of workforce.

Additionally, training and upskilling opportunities, faster career advancement, career mobility will ensure banks remain attractive as potential employers.

Q: As 2024 draws to a close, what would be on your wish list for banking in the coming year?

Malaysia may encounter challenges from heightened geopolitical tensions and policy uncertainty following the US election, which could potentially disrupt global trade flows and amplify global inflationary pressures. Against this backdrop, economic stability is top of my wish list for next year. I hope the downside risks do not materialise and that the Malaysian, ASEAN and global economies stay robust and resilient in 2025.