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The central bank of Malaysia, Bank Negara, has approved two more digital banks to begin operations. The two banks are Boost Bank, a collaboration between fintech company Boost and RHB Banking Group, and AEON Bank, a subsidiary of AEON Financial Service.
In 2022, Bank Negara granted digital banking licenses to five applicants. However, only Grab’s GXBank started operating in the final quarter of 2023. The other two successful applicants, a consortium led by Sea Limited and YTL Digital Capital Sdn Bhd, and a consortium led by KAF Investment Bank Sdn. Bhd., have not launched their digital banks yet.
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GXbank already has more than 100,000 customers since it started. The digital bank will also launch a debit card for customers in January 2024.
The first Islamic digital bank in Malaysia:
AEON Bank in Malaysia is the first Islamic digital bank. Unlike other digital banks, an Islamic digital bank must follow Sharia law. This means the bank provides customers with financial services that align with Islamic finance principles.
AEON Bank’s CEO, Raja Teh Maimunah, said the digital Islamic bank aims to promote financial inclusion and Islamic banking.
“As part of one of Malaysia’s most recognized retail household brands, we aim to provide accessible, inclusive, and Shariah-compliant digital banking solutions to our AEON Group of customers, as well as to all Malaysians. It is our intent to empower our communities with access to digital financial services which are simplified, safe and secure,” said Maimunah.
AEON is a well-known brand that has been serving Malaysians for over 40 years. The company aims to expand and improve its services for retail and wholesale customers, as well as its ecosystem partners like auto dealers, merchants, and suppliers.
AEON Bank’s focus on digital technology will bring new and innovative products for its customers and ecosystem partners, increasing overall value for the AEON Group.
AEON Bank plans to introduce its rollout in the first half of 2024. The rollout will start with a beta testing phase exclusive to AEON employees. Maimunah stated that this will help the bank improve and optimize the app based on user insights and feedback.
“By initially offering access to a select group of beta testers, we aim to collaboratively fine-tune the app to ensure it meets the expectations of our wider user base on full release,” she said.
Boost for digital banks in Malaysia:
Boost Bank takes a more traditional approach to digital banking compared to other digital banks, as it is affiliated with the Boost fintech company, a subsidiary of Axiata and RHB Bank.
The Boost-RHB Digital Bank Consortium is the first digital bank owned primarily by Malaysians to start operating in the local market. They have introduced an innovative embedded digital bank app. Boost holds 60% equity, and RHB owns the remaining 40%.
“Our aim is to broaden the digital banking options available to those with limited access to conventional banking facilities, and fostering an inclusive digital society for all Malaysians,” said Vivek Sood, group CEO of Axiata Group Berhad.
“This is a culmination of the symbiotic and strategic partnership between a leading fintech and successful financial institution with substantial ecosystems, united by a shared vision to drive greater financial inclusion,” added Sheyantha Abeykoon, group CEO of Boost.
Boost Bank is entering the alpha testing phase, along with AEON Bank and GXBank. This phase will include internal employees, family, friends, and a chosen group of customers. As they prepare for the public launch, Boost Bank will improve their product offerings and make the user experience better.
Fozia Amanulla, CEO of Boost Bank, added, “Rooted in the fundamental belief that everyone deserves a bright financial future, we are determined to propel Malaysia into an age of true financial inclusivity, by harnessing the untapped potential of embedded finance with our digital bank.”
Pursuing financial inclusion for all:
Bank Negara has awarded digital bank licenses to consortia after a thorough assessment. The assessment considered factors such as the applicants’ character and integrity, their financial resources, the viability of their business and technology plans, and their ability to address financial inclusion gaps effectively.
Digital banks will announce their plans to promote financial inclusion. GXBank hasn’t announced anything yet, but AEON Bank and Boost Bank want to offer banking and financing to people who usually can’t access these services.
AEON Bank is committed to providing financial services to individuals and small businesses without access to funding. They will also focus on promoting financial literacy and education to help people make informed financial decisions.
Boost Bank thinks that as it starts operating in phases after completing an audit, Malaysia is about to enjoy the advantages of more financial inclusion.
