Banks are the worst during a crisis, says AirAsia boss

 

AirAsia boss Tony Fernandes said under the old-style banking, relationships were built up to help companies in crisis.

PETALING JAYA: AirAsia boss Tony Fernandes has criticised the banking industry, stating banks are the worst to deal with during an economic crisis.

Due to that, the banking industry may have a short life span, replaced by advancements in financial technology (Fintech).

“They are not really getting capital to the young people to invest.

“Go to a bank, and people need to mortgage their house and maybe your thumbs as well to get a loan,” he said during a Youth Economic Forum held through Facebook Live.

He said banks are the worst during a crisis as they forget that companies which were doing well before the crisis will do well after the Covid-19 pandemic is over.

“They forget all the 15 years of relationship and suddenly become like loan sharks, collectors.”

Due to that, Fernandes asked the banking industry to take a hard look at itself as there were opportunities for new models.

He said this includes old-style banking where relationships were built up to help companies in crisis.

For instance, he said the US financial system kept coming up with great products as they had a mature capital structure.

“There is opportunity for that … for those with vision.

“The big issue in Malaysia is getting capital out for young entrepreneurs because there is great opportunity, a lot of great ideas.”

Fernandes said the digital world is going to change the way things work and due to that, AirAsia as an airline is talking more about Fintech.

“Companies that don’t are not going to be there.”

AirAsia has its own Fintech arm, BigPay, that offers financial services, including credit to B40 low-income and M40 middle-income groups. - FMT