BEYOND DIGITAL BANKING: THE STRATEGIC ROLE OF PHYSICAL ASSET MANAGEMENT CAPABILITY IN ENHANCING OPERATIONAL RESILIENCE AND FINANCIAL PERFORMANCE IN MALAYSIAN BANKS

Abstract

Digital banking has intensified the strategic importance of technology-enabled service delivery, but the Malaysian banking sector remains dependent on physical and hybrid physical-digital assets, including branches, ATMs, cash infrastructure, data centres, facilities, backup sites, security systems, and building services. Bank Negara Malaysia's recent financial-stability reporting indicates that operational and cyber resilience remain supervisory priorities, with financial institutions investing heavily in IT infrastructure, data-centre upgrades, cybersecurity controls, and integrated business continuity testing (Bank Negara Malaysia, 2025). ISO 55000 and ISO 55001 frame asset management as a systematic approach for realizing value from assets by balancing performance, risk, cost, assurance, adaptability, and sustainability (International Organization for Standardization [ISO], 2024a, 2024b). This paper develops a Malaysia-focused conceptual argument that Physical Asset Management Capability (PAMC) is a strategic organizational capability that supports operational resilience and, indirectly, financial performance in banks. Drawing on the resource-based view, dynamic capabilities theory, operational resilience literature, facilities management, corporate real estate management, and Malaysian banking regulation, the paper proposes that PAMC enhances resilience through asset visibility, lifecycle planning, risk-based maintenance, redundancy, business continuity readiness, and performance monitoring (Barney, 1991; Duchek, 2020; Teece et al., 1997). The paper contributes a conceptual framework for examining PAMC in the Malaysian banking sector and proposes future empirical testing using bank-level operational, asset, and financial performance indicators.