Are Digital Disruptions Good or Bad? Well, That’s Up to You

Industry 4.0 has brought about major disruptions not only to major industries, but to brick-and-mortar restaurants and retailers as well. Startups such as Foodpanda, UberEats and DeliverEat, for example, have interrupted the F&B sectors as consumers increasingly choose convenience over dining out. Similarly, Zalora, Lazada, Taobao and many others have disrupted the retail industry by allowing customers to compare product and pricing more efficiently without going to any store.

“Many are worried about the impact of digital disruption on their own industries and how their organisations can adapt and cope. Digital skills such as machine learning and coding were not known a few years ago, but today, these skills are needed,” says Howie Chang, Ayuh Bina founder and @CAT Penang programme director.

“That’s why we organised the deTECH conference to ignite a movement in today’s digital world, where business owners and leaders embrace technological breakthroughs,” says Chang.

Last November, Ayuh Bina together with the Penang Skills Development Centre (PSDC) and @CAT Penang organized the inaugural deTECH 2018 conference to empower and inspire people through exposure to a variety of technological trends.

The two-day conference featured 22 speakers from all around the world; industry experts leading panel discussions; creative and technical workshops; an exhibition hall with 20 booths displaying the latest budding start-ups; and local start-up giants covering fintech, blockchain, cloud computing, Internet of Things (IoT), AI, design thinking and big data.

Deputy Minister of Youth and Sports, Steven Sim, who officiated the event, opined that Industry 4.0 is about empowering consumers. “Grab did not kill the taxis – the monopoly, fare control and attitude of taxi drivers did. Technology itself is not the disruption; disruptions happen because of consumers’ dissatisfaction.

“Innovations and new enterprises are making use of technology to fill in the gap in human satisfaction. Today’s market is geared towards fulfilling and empowering the human person in many ways. It empowers customers,” says Sim.

One such market is financial technology, or fintech. Driven by positive consumer demand, Malaysia is currently racing with top cashless-transaction countries such as Singapore, the Netherlands, France, China and India. Cash-based sectors such as retailers, restaurants, and travel and tour-related industries are slowly migrating away from paper bills and coins, and going cashless.1

Cashless systems are essentially transactions that do not involve physical money, such as credit cards or online payment, internet banking, and electronic fund transfers and investments – with many more still emerging as this new technology evolves.

(Back row, fourth and fifth from left) Howie Chang and Steven Sim.

Nicholas Lim.

“Previously, having a credit card denoted status – the better the card, the higher your status. Today, there is no such card loyalty; loyalty is given to the one who is able to provide better discounts or cashback benefits,” says Nicholas Lim, chief technology officer of Soft Space.

To Lim, payment is no longer just a channel – be it cash or cashless. “Payment is a lifestyle that must be enabled by technologies. The most important thing when pushing out a cashless solution is to figure out ways to get consumers to use it, and to continue using it. The rapid expansion of touch points – or shops – to provide payment solutions is necessary to entice and retain customers.

“This in turn will generate data on the customer’s preferences and habits, which will then be put into data analysis. It will allow retailers to learn how to generate customer ‘stickiness’, be it through better promotions or rewards, to bring greater service to the customers and create greater win for the retailers. It’s actually a circle – the better service you have, the better data you have, the more customers will come on board. That is the engine for the whole cashless society,” says Lim.


But digital payment has its drawbacks too – it is very traceable; and institutions will potentially have access to all relevant information, potentially infringing on consumers’ personal preferences and even habits. Records of various cashless transactions build a database that paves the way for future predictions. Compiling the profile of an individual is simply done by mining through a large number of records within the database. Furthermore, not everyone is able to jump on the cashless bandwagon – this is notably difficult for the poor and the elderly.

Young people drive the new economy, said Deputy Minister of Youth and Sports Steven Sim in his opening speech.

The more worrying issue is that cashless systems rely heavily on data or internet connections. What would the consequences be for a cashless society when the electric grid fails or servers are thwarted by power failure, hackers or even war?

This was what cashless users in Sapporo faced when Japan’s North Sea earthquake triggered a large-scale power outage in 2018. E-wallet users lost their ability to pay for goods and services as all electronic payment methods became unavailable. Worse, they were unable to withdraw cash from banks as the ATMs were offline as well. Most of them had to go without supplies during this period. In February 2018 Stefan Ingves, governor of the central bank of Sweden, warned that the cashless society is defencelss in the face of war or natural disaster, and huge social and financial systems will collapse in an instant.2

Cashless Society – Are We Ready?

When asked about Malaysian attitudes towards cashless systems – particularly e-wallet adoption – Daniel B. Ruppert, group CEO of Sedania Innovator, thinks that Malaysians may not fully embrace cashless systems yet: “Here in Malaysia we are all very spoilt. We all have credit and/or debit cards; we all have bank accounts – bank account implementation is very high; so for us to carry another wallet, we say, ‘Oh okay, looks fancy. I can shake it to get discounts, which is good, but after that, what’s the purpose? What’s the point?’ We do not have the right-use cases yet. Until we actually do, we will probably be slower in adoption,” says Ruppert.

However, a news report quoting a 2017 survey conducted by Visa Inc said Malaysians are becoming increasingly confident about going cashless. According to the report, six in 10 said that they could go cashless for an entire day while close to half (41%) said that they could last three days without cash; more Malaysians are using payment cards, particularly among the more affluent.3

Meanwhile, Bank Negara has taken steps to enhance e-payment platforms. One of them includes waiving the instant transfer fee of RM0.50, effective July 1, 2018, for up to RM5,000 per transaction. To discourage cheque usage, cheque fees will be increased from RM0.50 to RM1.00 beginning January 2, 2021 to reflect the higher processing cost.4

While sceptics may still tout the “Cash is King” philosophy, in this fast-paced technological world, slowly but surely we are converting to a new philosophy: “Data is King”.

Tan Kai Yan is a technical writer with a multinational company in Bayan Lepas. She enjoys nature, gadgets and things tech-related.

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