With the deadline for Malaysia’s digital banking license application being less than a day away, a majority of the players are surprisingly still coy about confirming their status.
In markets like Hong Kong and Singapore who have similarly issued a digital banking framework, players were far more eager to thump their chest and publicise about how their spin on digital banking will reshape financial services.
With the exception of a few players, most of the digital banking aspirants are keeping their cards very close to their chest.
Perhaps they are media-shy or they have learned from their counterparts and wanted to spare themselves the trouble of explaining why they did not secure a license should their bid not be accepted by Bank Negara Malaysia.
Nevertheless, we imagine that there will be more announcements over the next few days and we will be updating the list as the story develops.
Here’s a list of aspirants we know so far:
Axiata & RHB Bank
Axiata and RHB confirmed earlier this month their bid for a digital banking license after months of rumours floating around.
The consortium will be led by Axiata with its subsidiary Boost Holdings owning 60% and RHB owning 40% of the digital banking consortium.
Boost Holdings houses all the digital financial services under Axiata Digital while RHB is one of Malaysia’s largest banks.
BigPay, who frequently describes itself as a fintech that is modeled after challenger banks like Monzo, is another contender in this race.
Salim Dhanani, CEO and Co-founder of BigPay told Fintech News Malaysia in an interview that they’ve been interested in the license since it was announced.
BigPay is backed by aviation group AirAsia who also has interests in the insurance business through its subsidiary Tune Insurance.
Fintech News Malaysia anticipates that BigPay will be making an announcement about their bid in due time.
CIMB’s Touch ‘n Go Group
Touch ‘n Go Group is probably best known for its pre-paid cards which are primarily used for transportation in Malaysia.
It is a subsidiary of CIMB Group, one of Malaysia’s largest banks. As part of its modernisation efforts, Touch ‘n Go Group entered into a joint venture with Ant Group to launch TNG eWallet.
While they have not formally announced a bid, Effendy Shahul who is both the CEO for Touch ‘n Go Group and CIMB Digital Assets, told Fintech News Malaysia in an interview that they are interested to join a digital banking consortium and they do not have to be the controlling majority.
It is interesting to note that Ant Group holds a digital banking license in both Hong Kong and Singapore, while CIMB operates digital-only banks in the Philippines and Vietnam which are led by Effendy’s team.
Grab is a natural suspect to be in the digital banking race, having secured their license in Singapore, it seemed only natural for the super-app to also eye Malaysian markets.
Having raised US$ 300 million for its financial services arm Grab Financial Group, they certainly have the firepower to do so as well.
While Grab has not come out to formally to announce their bid, they have in the past expressed interest. It’s also interesting to note that based on the last publicly available info, Maybank has a 30% indirect stake in GrabPay in Malaysia which was registered as GPay Network (M) Sdn Bhd.
Sunway is practically a household name, the conglomerate has business interests spanning healthcare, property, retail, leisure among others.
On the financial services front, Sunway owns a 51% stake in Credit Bureau Malaysia and they are also involved with the remittance business through Sunway Money.
Sunway Berhad’s President, Dato’ Chew Chee Kin said in a press statement previously that their acquisition of stakes in Credit Bureau Malaysia will advance their ambition to secure a digital banking license.
MyMy and Sukaniaga
Founded by Joe Mcguire and Kishore Samuel, MyMy announced their bid for a digital banking license with Sukaniaga, a solutions provider in the digital loans space.
MyMy previously raised Malaysia’s largest fintech seed round of RM 12 million led by Malaysia’s army cooperative Koperasi Angkatan Tentera Malaysia Berhad.
The duo said it is aiming to be “Malaysia’s first unicorn and a shariah-compliant digital bank.”
Pertama Digital & Crowdo
Pertama Digital, a publicly listed Malaysian firm best known for providing consumer-to-government payments, first announced its bid for a digital banking license with Crowdo.
Fintech News Malaysia noted the strange choice in a consortium partner as Crowdo had very limited success within the Malaysian SME space through its equity crowdfunding operations.
They have since also announced a few more partnerships which include one with core-banking solution provider INFOPRO, though it is unclear to us if the partnership is really just a vendor-client relationship. If so, it hardly adds anything to bid since every consortium will engage a tech provider.
Gaming giant backed Razer Fintech, who was unsuccessful in its bid to secure a digital banking license in Singapore, said that it will be turning its attention to Malaysia and the Philippines for its digital banking ambitions.
Razer Fintech’s CEO, Lee Li Meng said while they were hoping to start their journey in Singapore, their strategy of extending Razer Fintech’s business into digital banking remains unchanged.
Former UOB veteran Eduard Fabian, who was previously hired as Razer Fintech’s CTO presumably to lead the tech team for the digital banking unit, has since left the organisation to pursue a CIO role in Chubb Insurance.
A US-based fintech company, MoneyLion is seeking to leverage its experience in the US as a challenger bank to provide similar digital banking services in Malaysia. The company is set to go public through a merger with SPAC Fusion Acquisition Corp, giving it additional capital firepower to grow its digital banking ambitions.
Unknown to many outside the fintech circle, one of MoneyLion’s co-founders, Chee Mun Foong is Malaysian and he leads the technology team out of Kuala Lumpur.
Paramount purchased a 30 percent stake in P2P financing platform Fundzatic in April, a strategic move likely aimed at boosting its chances of securing a digital banking license.
Fundzatic’s founder, Jeffrey Chew, is also Paramount’s CEO. An experienced banker, he was previously the CEO of OCBC Malaysia.
Led by well-known Malaysian tech entrepreneur CC Puan, the Bursa-listed GreenPacket announced its ambitions to secure a digital banking license in Malaysia.
The company said that it has acquired eKYC firm Xendity for US$ 10 million to strengthen its digital identity verification capabilities as it seeks to bid for the license.
Whether this will provide GreenPacket any added advantage is unclear as there are many competent eKYC solution providers that can provide a reasonably good digital identity solution without the need of acquiring a firm to bring the tech in-house.
GreenPacket also has several commercial relationships with internet giant Tencent which operates a digital bank in China called WeBank.
The firm’s previous foray in e-wallets through kiplePay has found very limited success.
ASEAN-focused P2P lender Funding Societies is also among the contenders who is interested to bid for a license in Malaysia.
Kelvin Teo, Group CEO and Co-Founder of Funding Societies said to Fintech News Malaysia that they are “excited by the opportunity” and having a digital bank will allow them to build on their position of being the “largest SME digital financing platform in South East Asia”.
Kelvin said that they have been seeking out partners to apply for the license.
Funding Societies previously entered into a bid for Singapore’s digital banking license unsuccessfully with AMTD Group, SP Group, and Xiaomi.
Singapore’s wealth platform iFast has also announced its ambition for a digital bank through its Malaysian arm.
iFast’s previous bid for Singapore’s digital banking license alongside Chinese players Yillion Group and Hande Group was unsuccessful.
Alongside Rakuten Trade, they are currently the only two companies in Malaysia offering fully digital equity stockbroking service.
CN Asia Corp
CN Asia Corp, an investment holding company with businesses primarily focused on industrial manufacturing said that it is intending to set up a digital bank catering to the needs of women. It is partnering with social enterprise Intcys to reportedly invest RM 400 million for its digital banking ambitions.
Via the proposed entity MyWeW (Women Empowering Women) digital bank, the group said it plans to offer financial services to underserved women in Malaysia.
The announcement was sparse on details about the degree of underserved women in Malaysia and how it plans to tackle it in a way that incumbent banks aren’t able to especially given the fact that the consortium lacks any real experience in this space.
AMTD Group’s Chairman, Calvin Choi revealed in an interview that it was keen to seek a digital banking license in Malaysia.
The group successfully secured a license in Hong Kong to jointly set up Airstar Bank in Hong Kong with Xiaomi. They were however unsuccessful in their bid in Singapore with SP Group, Xiaomi and Funding Societies.
Publicly listed PUC Berhad, the e-commerce platform that was formerly known as 11street which has since been renamed Presto, presumably to streamline its brand identity with its e-wallet product Presto Wallet.
On the e-commerce front, it has struggled to find a footing against strong players like Lazada and Shopee and on the e-wallet front, having entered the game too late, it also struggled against its more established competitors.
Its Group Managing Director Cheong Chia Chou said in an interview that they are interested to participate in the digital banking business.
TymeBank is a South African digital bank backed by JG Summit, one of the biggest conglomerates in the Philippines. In February, it raised US$109 million in fresh funding from British and Filipino investors.
During the fundraising announcement, they said that they are eyeing a license in the Philippines and Coen Jonker, Co-Founder and Executive Chairman told Reuters that they were in the final stages of closing an exclusive partnership with a consortium.
The Johor Chief Minister Datuk Haji Hasni Mohamad announced that the state government intends to launch a digital bank.
The Chief Minister further stated that the establishment of a digital bank will create a more inclusive financial ecosystem for its citizens. He further noted the growth potential of digital banks and the fintech sector and added that the state government should seize the opportunity.
Chief Minister Datuk Patinggi Abang Johari Abang Openg first announced Sarawak’s digital banking ambitions in 2020.
The state has since formed a consortium with little-known Vision Group who is described as an “integrated business enabler firm”.
It is unclear to Fintech News Malaysia what Vision Group brings to the table or why the state government has chosen the company as a consortium partner.
It is interesting to note that the Sarawak Government has also previously launched its own e-wallet named SarawakPay.
Malaysia is the first instance that we are aware of where state governments are competing against private players to bid for a digital banking license.
Sea Group & YTL Berhad
Sea Group is reportedly bidding for a digital banking license with Malaysian conglomerate YTL Group. Sea Group successfully secured a digital banking license in Singapore and their fintech interests in Malaysia include ShopeePay and SPayLater.
Meanwhile, YTL Berhad, is a Malaysian conglomerate with business interests spanning across hospitality, property, technology, and more.
Industry sources indicate that the consortium will likely be led by Sea Group.
National oil giant Petronas was also reportedly in the running to bid for a digital banking license in Malaysia. Though they have since come out to refute claims from Bloomberg that it is looking to focus on digital Islamic banking with a local financial institution.
Petronas’ fintech business includes Setel, an e-wallet designed specifically to be used within their own petrol stations.
Genting Group Berhad
Genting Group Berhad is also rumored to be applying for a digital banking license though details are sparse and they have declined to respond to media requests for comments.
The group is a Malaysian conglomerate with business interests spanning across hospitality, property, plantations, energy and more. Though they are best known for the casino business.
Bank Rakyat, an Islamic cooperative bank in Malaysia with assets totaling RM111.75 billion as of December 2020, was also reportedly eyeing a digital banking license as well.
They have declined media requests for comments. It is unclear if they are currently in talks with other partners to form a consortium.
Backed by Permodalan Nasional Berhad, MIDF is involved with investment banking, development finance and asset management.
They are rumoured to be interested in a digital banking license but have so far declined media requests for comments.