Finally, wait until neck already looooooong 🦒🦒🦒 the winners of the most anticipated digital bank licenses in Malaysia were announced by Bank Negara Malaysia (BNM) today (29 April 2022).
This will mark the new chapter of the local banking industry and also the Fintech industry in Malaysia. We promised that we will be blogging more about Fintech / Digital Bank from now onwards. 😊
All 29 applications received were thoroughly assessed by BNM, which cover the character and integrity of applicants, nature and sufficiency of financial resources, soundness and feasibility of business and technology plans as well as ability to meaningfully address financial inclusion gaps.
Who gets it?
What to expect?
Applications were assessed on their individual merits, as well as relative to other applications based on consistent evaluations of each assessment criteria.
This horizontal review is based on the assessment criteria applied across all applicants to determine the relative strength of each application and identify successful applicants.
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| Source: BNM |
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| Source: TheEdge |
The FIVE successful applicants for the digital bank licenses as approved by the Minister of Finance Malaysia are:
A. The following applicants are to be licensed under the Financial Services Act 2013 (FSA):
- a consortium of Boost Holdings Sdn. Bhd. and RHB Bank Berhad;
- a consortium led by GXS Bank Pte. Ltd. and Kuok Brothers Sdn. Bhd; and
- a consortium led by Sea Limited and YTL Digital Capital Sdn Bhd.
B. The following applicants are to be licensed under the Islamic Financial Services Act 2013 (IFSA):
- a consortium of AEON Financial Service Co., Ltd., AEON Credit Service (M) Berhad and MoneyLion Inc.; and
- a consortium led by KAF Investment Bank Sdn. Bhd.
What can we expect from a Digital Bank?
Like traditional banks, these new players will provide retail customers with services such as opening accounts and deposits as well as issuing debit and credit cards. However, digital banks will not have a physical presence and all banking services will be done online.
In Malaysia, the emphasis of digital banks will be to cater to the underserved and unserved segments of the population.
Bank Negara Malaysia Governor Tan Sri Nor Shamsiah said:
“Digital banks are expected to further advance financial inclusion. By adopting digital technology more widely for everyday transactions, we can significantly increase opportunities for our society to participate in the economy - by overcoming geographical barriers, reducing transaction costs and promoting better financial management.”“Digital banks can help individuals and businesses gain better access to more personalised solutions backed by data analytics. As businesses move online, digital banking also provides a safer and a more convenient way to transact,” she added.
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| Source: NST |
Following this announcement, the successful applicants will undergo a period of operational readiness that will be validated by BNM through an audit before they can commence operations. This process may take between 12 to 24 months.
Those granted with the license will have to maintain a minimum amount of RM100 million in capital funds in the foundational phase, which will be further raised to RM300 million by the third year of operations.
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