12 Februari

DIGITAL BANKS IN MALAYSIA: COMPLETE AND DETAILED GUIDE

Malaysia has officially entered the digital banking era. Bank Negara Malaysia (BNM) issued five digital banking licenses to accelerate financial inclusion, innovation, and digital transformation in the financial sector.

Digital banks operate primarily online without physical branches. They focus on technology-driven services, lower operational costs, and improved accessibility for underserved communities and SMEs.

Below is a detailed explanation of the licensed digital banks in Malaysia.

  1. GXBank Berhad

License Holder: GXBank Berhad

Major Shareholders: Grab Holdings
Singtel
Kuok Group

Launch Status: First operational digital bank in Malaysia (launched 2023).

Target Market: Retail consumers
Gig workers
Underserved individuals
Digital-savvy users

Key Features: Fully digital onboarding via mobile app
Savings accounts with competitive interest rates
No physical branches
Real-time transaction notifications
Integration with Grab ecosystem

Strengths: Strong ecosystem support from Grab
Focus on financial inclusion
User-friendly app experience

Business Model Focus: Consumer banking
Micro-savings
Digital payments

  1. AEON Bank (AEON Financial Service & MoneyLion)

License Holder: AEON Bank Berhad

Major Shareholders: AEON Financial Service (Japan)
MoneyLion

Target Market: Retail customers
Middle-income households
Existing AEON customers

Expected Focus: Digital savings
Personal financing
Consumer credit
Buy Now Pay Later integration

Strengths: Strong retail ecosystem
Existing customer base through AEON stores
Experience in consumer financing

Business Model Focus: Consumer lending
Digital credit services
Retail-based financial ecosystem

  1. Boost Bank (Axiata & RHB Partnership)

License Holder: Boost Bank Berhad

Major Shareholders: Axiata Group
RHB Bank

Target Market: Micro, small and medium enterprises (MSMEs)
Digital wallet users
Small merchants

Key Focus: SME financing
Micro-lending
Digital wallet integration
Financial inclusion for small businesses

Strengths: Strong fintech background (Boost e-wallet)
Banking expertise from RHB
SME-focused ecosystem

Business Model Focus: Digital SME banking
Working capital financing
Merchant services

  1. KAF Digital Bank

License Holder: KAF Digital Bank Berhad

Major Shareholders: KAF Investment Bank

Target Market: SMEs
Retail customers
Investment-oriented clients

Key Focus: Digital Islamic banking services
Investment products
SME financing

Strengths: Strong capital market experience
Islamic finance positioning
Investment expertise

Business Model Focus: Islamic digital banking
SME solutions
Wealth management integration

  1. Ryt Bank (Sea Group / Shopee related consortium)

License Holder: Sea Capital Services

Major Shareholders: Sea Group (Shopee parent company)

Target Market: E-commerce sellers
Online entrepreneurs
Retail consumers

Key Focus: Digital payments
SME financing
E-commerce ecosystem integration

Strengths: Shopee ecosystem
Strong digital user base
Regional experience in digital banking

Business Model Focus: E-commerce integrated banking
SME working capital
Digital wallet synergy

WHAT MAKES DIGITAL BANKS DIFFERENT FROM TRADITIONAL BANKS?

  1. No Physical Branches
    Fully app-based services.

  2. Faster Account Opening
    Fully online KYC verification.

  3. Lower Operating Costs
    No branch maintenance.

  4. Data-Driven Credit Assessment
    Use alternative data such as transaction behavior.

  5. Target Financial Inclusion
    Serve gig workers and small businesses.

BNM DIGITAL BANKING FRAMEWORK

Bank Negara Malaysia structured digital banks into two phases:

Foundational Phase (3–5 years): Restricted asset size
Close supervision
Focus on sustainable growth

After successful compliance: Full operational status granted.

BENEFITS OF DIGITAL BANKS

Convenience
Lower fees
Faster services
Innovation-driven
Financial access for underserved groups

RISKS AND CONSIDERATIONS

Technology risks
Cybersecurity threats
Limited physical customer support
New business model risk

Digital banks are still under close regulatory monitoring to ensure stability.

ISLAMIC DIGITAL BANKING IN MALAYSIA

Malaysia is a global leader in Islamic finance. Some digital banks are structured under Islamic principles, offering Shariah-compliant products.

This ensures: No riba (interest-based elements)
Shariah governance
Ethical investment screening

FUTURE OUTLOOK

Digital banking in Malaysia is expected to:

Increase competition
Improve service quality
Lower banking costs
Support SME growth
Enhance financial inclusion

Traditional banks are also accelerating digital transformation in response.

CONCLUSION

Malaysia currently has five licensed digital banks operating under Bank Negara Malaysia’s supervision. Each has a specific focus, such as consumer banking, SME financing, Islamic finance, or ecosystem integration.

Digital banks represent the future of financial services in Malaysia, offering convenience, innovation, and broader financial access.

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