Monday, July 3, 2023
Hong Leong Bank Launches First Bank-Backed Earned Wage Access Solution, Innovating Salary Advances For Employers And Employees
Hong Leong Bank announced today the launch of the HLB Salary Advance Employer Solution in partnership with Paywatch Malaysia Sdn Bhd, making it the first bank in Southeast Asia to back an Earned Wage Access solution. This innovative EWA solution aims to empower Malaysians by providing them with easy access to their earned salaries, and is set to transform the way businesses offer and manage their advanced salary payouts.
The HLB Salary Advance Employer Solution is a simple, seamless digital platform that enables employees to withdraw up to 25% of their monthly earned salaries, whenever the need arises. There are no interest or late charges, except for a nominal service fee of RM 2 per withdrawal.
According to a recent survey conducted by the Bank which involved 420 Malaysian employees and employers, it was found that respondents desire easy access to their wages and better financial control, particularly in times of emergency. The survey also revealed that employees often feel uncomfortable requesting a salary advance from their employers due to emotional factors.
On the other hand, employers ranked the ability to support their employees with flexible and quick access to their salaries during emergencies as a top priority in salary management. Employers also cited other benefits of a fully-automated EWA solution, such as improving cash flow management, reducing paperwork, and increasing employee satisfaction.
Andrew Jong, the Managing Director of Personal Financial Services at HLB shared that the solution not only bridges the gaps and addresses the pain points in the current conventional salary advances, but also fosters financial flexibility, improves financial literacy and promotes financial inclusion for Malaysians.
“The rising costs of living and inflation increase the financial pressure on particularly the lower- to middle-income earners and households. In such circumstances, the payroll timings and conventional salary advance methods may not be able to provide timely assistance to meet cashflows and unexpected demands. This may leave individuals vulnerable to unsustainable borrowing practices.
By offering real-time access to their own earned wages, the HLB Salary Advance Employer Solution can help employees to tap into their earned but yet-to-be-paid wages and improve their control over their own finances, overcome short-term financial challenges, and improve their overall financial well-being. To further improve financial awareness and responsibility, users will also need to consider that they can meet their month-end financial commitments prior to requesting a salary advance,” added Andrew.
Andrew also emphasised that the new EWA solution will also help employers and businesses manage their advanced salary payouts, providing a fully-automated system that is streamlined, efficient and sustainable.
“We always strive to meet the needs of our business customers, and work hard to introduce digital solutions that will promote inclusion, innovation and sustainability. Having a fully-digital, systemised EWA solution will help businesses manage their cash flow, streamline salary advance management, and reduce dependence on paperwork and manpower”, said Andrew.
Richard Kim, the Founder and CEO of Paywatch, expressed his excitement about partnering with HLB to roll out this new solution in Malaysia.
“As a social impact platform, we work with employers and reputable financial institutions to produce a positive, sustainable impact on the financial health of employees across Asia. We partner with leading banks across different regions, including Hana Bank in South Korea, to ensure fair pricing, consumer protection, and greater financial access to all. With HLB’s backing, our solution would more efficiently support employees' financial security and resilience while providing companies with opportunities to offer enhanced benefits, thereby improving employee motivation and overall productivity,”
"By providing employees with timely access to their earned wages, we are improving not only their financial well-being but also helping businesses retain their valuable talent. Our solution has been proven to decrease turnover rates and save companies an annual savings of over MYR 2,100,000 (USD 500,000) in rehiring fees. Paywatch empowers companies to demonstrate their commitment to their employees' financial wellness, which in turn fosters a more loyal and engaged workforce,” said Richard.
To access the HLB Salary Advance Employer Solution, employees from participating organisations can create an account on the Paywatch app. Once approved, salary advance requests will be credited to the user's bank account within one business day. On payday, the advanced amount withdrawn will be automatically deducted from the employee's salary.
On the employers' end, the solution is designed to be seamless, secure, and convenient. There is no cash flow impact, no deposit required, and no integration with any company software.
To find out more about HLB Salary Advance Employer Solution, please visit http://www.hlb.com.my/salaryadvance