Digital banking licenses to spur competition further. 29 applied.
Bank Negara Malaysia (BNM) will be deciding on the winners for the digital banking licenses for Malaysia. There are up to 5 licenses up for grabs and there were 29 applications for one. What happens after this is that the traditional banks would now have innovative competitors and it would also force the current players to really do more in order not to have others eat their lunch. This is good for consumers here in Malaysia.
As usual, there are many speculations as to the companies which will win one of the licenses. Here is one article highlighting a few of them.
Article in themalaysianreserve.com Bank Negara Malaysia (BNM) will announce successful applications for the country’s first digital banking licences.
Banks, industry conglomerates, technology enterprises, e-commerce operators, fintech players, cooperatives and state governments were among those who applied. Five digital banks will be granted licenses to provide financial services to under-served and unserved populations.
Successful applicants will be required to contribute to increased financial inclusion by offering goods and services that solve market gaps in underserved and unserved segments.
Axiata, via its subsidiary Boost Holdings Sdn Bhd, and RHB signed a comprehensive heads of agreement yesterday to form a consortium for the application to increase competitiveness and accelerate the country’s digital transformation and financial inclusion ambition.
Aeon Credit said that it will partner with its parent business, Aeon Financial Service Co Ltd, for the digital banking licence. It will own 40% of the company, while its parent company will own 60%.
BigPay, is another fintech supported by AirAsia which will be aiming for one of the licenses too.
Grab has also confirmed its application for a digital banking licence, making it the most frequently cited example of how digital banking may be used to disrupt traditional financial institutions. Malayan Banking owns a 30% indirect state in GrabPay Malaysia. Please do refer to the full article for even more potential bidders too. Article in themalaysianreserve.com
Why digital banks are needed when we already have so many banks today
Imagine trying to sign up for a bank account in a normal bank. It’s a long process which may even start from comparing between the different banks. This is followed by choosing one and then driving over to the bank, find a parking and then queue up. Then it’s filling up forms, waiting for the bank officer to call our name. Then, it’s done and we need to then proceed to login online for the first time and more. This is because banks have their KYC (know your customer) process.
When it comes to a digital bank, this whole process could be completed within minutes. e-KYC will be the way forward and gone would be the process which needs a lot of human intervention. With a much shorter process, it meant that costs are lower and when costs are lower, then it’s possible for the bank to offer higher returns too. At least that’s how the industry is anticipating for digital banks.
All the best to all the winners. Do more for us quickly!
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