Grab, Razer, AirAsia, Axiata and CIMB join other companies that are considering applying for digital banking licenses in Malaysia, sources told Reuters on Wednesday (Jan. 22).
Some are in discussions with consultants for guidance as they ponder a move into digital banking, according to the sources, who are familiar with the matter.
Regional financial institutes Hong Leong Bank and Maybank are also looking into the possibility of applying for a license, according to the sources.
“Many financial and non-financial institutions are sizing up market opportunities and working with external parties,” said one of the sources.
The central bank in Malaysia said last month that it was considering releasing as many as five conventional or Islamic online banking licenses. A proposed licensing system is in the works and is anticipated to be finished by the end of June.
Malaysia is giving preference to bidders with capital governed by firms in the region. The country’s draft doctrine indicates that electronic banks are required to minister to populations in “underserved and unserved segments” with services and solutions that focus on the void in the market. Digital banks are also required to maintain 100 million ringgit ($24.5 million) in opening capital and scale to 300 million ringgit.
The advancement of mobile networks has prompted banking systems throughout Asia to open doors to emerging companies and tech firms who can offer more affordable services without the overhead of physical locations.
Singapore has already gotten 21 applications for its five digital bank licenses.
The FinTech division of the gaming startup Razer — which led an operation to go after an application in Singapore — was in discussion with a regional conglomerate for a Malaysian license.
Razer FinTech’s CEO Lee Li Meng told Reuters that it has vast enterprises in Malaysia’s online payments arena and would assess the prospects of digital banking.
Telecoms firm Axiata could submit an application via its Axiata Digital Services unit, which controls the eWallet Boost and contains the group’s digital undertakings.
BigPay, the financial services arm of AirAsia, runs an eWallet that has a prepaid card.
Ant Financial and Touch n’ Go’s digital wallet is the biggest eWallet service in Malaysia with 6.9 million customers. Lender CIMB has a majority stake in Touch n’ Go and is studying the possibility of going after a digital banking license, the source told Reuters.
Earlier this month, Ant Financial, Grab and Singtel and a consortium of firms led by Razer all submitted formal applications for digital banking licenses in Singapore.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More