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AEON Credit Sees Hurdles In Digital Banking

Business Today ·  Jul 17 23:13

AEON Credit Service is sees progress in digital banking initiatives despite the challenges in the sector, according to reports by Kenanga Investment Bank.

Kenanga maintains its OUTPERFORM call on the stock with a GGM-derived Price-to-Book Value (PBV) target price of RM8.55, reflecting positive long-term prospects despite current hurdles. The investment bank kept its forecast unchanged, citing Aeon's robust fundamentals and strategic alignment with digital banking trends.

The bank reported that the digital banking arm, Aeon Bank, which is 50% owned, faces challenges in improving financial services access for underserved communities due to infrastructure limitations. Despite robust digital frameworks like facial recognition and e-KYC, outdated devices and a lack of access to basic banking facilities pose significant hurdles for many potential users.

The report highlighted Aeon Bank's efforts to collaborate with regulators like Bank Negara to address these issues and develop solutions together.
However, the analysts noted that early adopters of digital banking products are likely to be more affluent customers, with credit assessment criteria favouring these users when financing products are launched.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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