Alliance Bank Malaysia’s retail strategy centres on three pillars: security-focused technology, embedded finance distribution, and environmentally sustainable processes. Two recent initiatives — a virtual credit card (VCC) with a dynamic card number (DCN) and an embedded personal financing service — have been developed in-house and integrated into both its digital channels and partner platforms. The retail franchise has been growing ahead of the industry, with double-digit growth in most product lines last year. The DCN launch is positioned as more than a virtual card initiative, offering customers control over their facility, the ability to set transaction limits and a flexible structure aimed at younger segments. Security, control and environmental impact Launched in April 2023, the VCC with DCN allows customers to generate either a one-time used card number for a single transaction or a subscription-based card number for recurring payments. These can be created, customised, frozen or deleted directly in its allianceonline mobile app, ensuring that the primary account number is never exposed to merchants. The technology masks the traditional card number, reducing the risk of compromise if a merchant’s systems are breached. One-time numbers expire after 30 minutes if unused, while subscription numbers can be assigned to specific merchants or services, with custom spending limits and expiry dates. Customers often create cards dedicated to petrol purchases, streaming subscriptions, or other recurring expenses. Up to 99 virtual accounts can be created per customer. The product supports near field communication (NFC) payments via Samsung Pay and Google Pay, with Apple Pay integration planned. Since launch, over 80,000 VCCs have been issued, with monthly issuance averaging 3,000 to 4,000 and activation rates of about 80%. No fraud incidents have been recorded, and each generated number is tracked for creation and use. Cost efficiency and sustainability are also emphasised. Acquisition costs for the VCC average MYR 100 (about $23.60) per customer, compared with MYR 600 (about $141.60) for a physical card. In financial year (FY) 2025, the bank avoided the production of 77,000 plastic cards and 250,769 paper statements, equivalent to around 463,000 sheets of paper. Developed internally rather than licensed from overseas vendors, the DCN goes beyond standard one-time use by offering subscription-based virtual accounts and additional features. Delivered via a zero-trust software development kit (SDK), it can be integrated into third-party applications. The technology has already been embedded in eight external apps, and discussions are underway with institutions in Singapore and Indonesia to license it. Integration with partner platforms In May 2025, the bank embedded its CashFirst personal loan into Touch ’n Go eWallet, becoming the first non-shareholder bank and second overall after CIMB to do so. Customers can apply entirely within the e-wallet interface, with approvals processed in minutes and disbursements completed within a day. The digital application journey was streamlined by reducing required fields from 54 to eight, removing paper forms, and replacing multiple signatures with a single digital authorisation. In the five months following the launch, the channel recorded MYR 15 million (about $3.5 million) in disbursements. The partnership enables customer acquisition beyond the bank’s own channels, tapping into the e-wallet’s more than 20 million users. Credit risk is managed using dual scorecards that combine the bank’s own risk models with partner data, including lifestyle and behavioural indicators, to verify employment and income. The non-performing loan ratio for these loans remains in line with branch-originated lending. Beyond Touch ’n Go, partnerships with loyalty and service apps are being explored, with the goal of extending embedded offerings beyond personal loans to include cards and other credit products. Integration timelines vary based on partner readiness and technical environments. Retail performance and positioning Alliance Bank launched its new strategic plan, ‘Acceler8 2027’, in January 2023 to drive broad-based growth across all lines of business and is currently at the midpoint of its transformation journey, having made significant progress to date. In FY2025, retail revenue grew by 21% year-on-year to MYR 794 million (approximately $187 million), marking a record year with the highest revenue ever achieved. Loan growth and lending performance: Loan growth remains among the fastest in the industry, with a YOY increase of 13% and a five-year compound annual growth rate (CAGR) of 7.2%. By product, mortgages grew 26%, personal loans 57%, and credit cards 67%. The gross retail non-performing loan ratio improved, declining from 2.3% to 1.7%. The lending business is well supported by a new integrated Retail Loan Origination System (RLOS). This system enables faster loan approvals through straight-through processing and consolidates lead capture, credit scoring, fraud detection, account creation, disbursement, and document management into a single platform. As a result, processing times have been reduced to deliver conditional approvals within 10 minutes across various products, real-time agent support has been enabled, and the productivity of both frontend and backend staff has increased by 1.3 times. In addition, the bank has invested in embedded lending capabilities and introduced innovative products, including Malaysia’s first Virtual credit card with a dynamic card number. This feature enables e-commerce players to whitelist our products on their platforms, supporting continuous growth through strategic partnerships. Deposits and liquidity: Retail deposits rose from MYR 27 billion to MYR 31 billion ($6.37 billion to $7.32 billion), maintaining the loan-to-deposit ratio (LDR) healthy at 99.5%. Although the current and savings account (CASA) ratio declined from 36% to 32%, it remained above the industry average. Strategic investments and transformation: The bank has reinvested its expanded revenues to sustain growth momentum and accelerate the shift towards “phygital” banking. Key initiatives include: • Expansion of the sales force and strengthening of middle and back-office capacity to deliver customer excellence, resulting in highest ever Net Promoter Score (NPS). • Refresh of core technology systems, with the majority of end of life/end of support (EOL/EOS) issues resolved. • Deployment of enhanced capabilities such as consumer loan origination, wealth management and collection systems. • Establishment of the Alliance Bank Innovation Council to drive future innovation. The bank’s brand profile has also been elevated, capturing a higher share of mind and brand trial, overtaking key competitors. These upfront investments will sustain its competitive advantage and are expected to deliver greater benefit realisation in the second half of the Acceler8 2027 plan, including improvements in the cost-to-income (C:I) ratio. Digital channels contributed 40% of retail sales, up from 35% in the previous year and the branch network has been modernised with an investment of more than MYR 50 million ($11.8 million) over the past three years and repositioned to focus on financial advisory services, particularly wealth management. Wealth management: The number of wealth centres has expanded from 15 to 37 centres today, with a target of reaching 40. The bank has also implemented a new Wealth Management System (WMS), enabling relationship managers to serve clients more effectively, and launched remote wealth capabilities that allow customers to engage their relationship managers at their convenience, anywhere. Wealth management now contributes approximately 20% of retail revenue. Over the past five years, wealth sales have increased by 2.9 times, while the privilege banking client base has grown by 1.3 times. Challenges and future focus Alliance Bank is one of the smallest local banks, with a network of only 80 branches in Malaysia. The bank’s limited scalability, combined with intensifying competition, is likely to result in continued margin compression. Rather than competing purely on branch scale, Alliance Bank is leveraging its agility, strong digital adoption and customer-centric approach to deliver differentiated value. Key initiatives include: • Digital transformation: Expanding digital channels and embedding capabilities such as virtual credit cards, remote wealth, and mobile-first banking experiences. • Embedded finance partnerships: Scaling beyond the branch network by embedding financing solutions with e-commerce players and fintech partners, enabling wider customer reach and new distribution channels. • Targeted growth segments: Focusing on high-potential areas such as affluent segment, small and medium-sized enterprise (SME) business owners, wealth management, and consumer lending businesses, where personalised solutions and speed-to-market provide competitive advantages. • Operational efficiency: Investing in core technology platforms to reduce processing times, improve productivity and sustain cost efficiency. • Customer experience: Elevating service delivery through both physical and digital touchpoints, supported by modernised branches, wealth centres and industry-leading NPS scores. Alliance Bank will continue to focus on its Acceler8 strategic plan by building scale and strengthening its people, products and technology/infrastructure, while broadening the engines and replicating its challenger DNA from SME into consumer/retail banking. Scaling innovation beyond the current base The DCN-enabled virtual card and embedded personal financing are positioned as core elements of Alliance Bank’s retail growth strategy, tied to security, customer control, cost efficiency and sustainability. Together, they are part of a broader push to grow digital sales, reposition branch roles and integrate banking services into third-party ecosystems. The next phase will depend on the bank’s ability to scale adoption, diversify partnerships and maintain engagement in a competitive and fast-evolving market.
