Two of the five successful applicants for the digital license awarded by Bank Negara Malaysia were within expectations as it was synergistic with their existing line of business an analyst in a stockbroking firm said.
He said that one of the contenders was already slated to win the award saying that Boost Holdings adding that t was a consortium with Axiata owning 60% of the shares and RHB owning the remaining 40%
He said that Boost Holdings houses all the digital financial services under Axiata Digital while RHB is one of Malaysia’s largest banks
The analyst said that Axiata, through its e-wallet company already has 8.8 million users as of 2020 and its largest shareholder is sovereign wealth fund Khazanah Nasional Berhad which makes it a frontrunner for the digital bank.
On the other contender, he said that GXS Bank Pte. Ltd. and Kuok Brothers Sdn. Bhd, he said that Grab Grab having secured the digital banking license in Singapore, it seemed only natural for the super-app to also eye Malaysian markets.
He said that having raised US$ 300 million for its financial services arm Grab Financial Group, they certainly have the firepower to do so as well. 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.
However, he said that the award to the other consortium were difficult to say as Bank Negara had its own criteria to ascertain before the award. The other consortium that was awarded the licence were a consortium led by Sea Limited and YTL Digital Capital Sdn Bhd, a consortium of AEON Financial Service Co., Ltd., AEON Credit Service (M) Berhad and MoneyLion Inc.; and a consortium led by KAF Investment Bank Sdn. Bhd.
On the financial impact, he said the analyst said that it would have minimal impact to these business entities as they were quite big in the operations and the licence would not impact their bottom line in the short-run
Applications were assessed on their individual merits, as well as relative to other applications based on consistent evaluations of each assessment criteria. This horizontal review is based on the assessment criteria applied across all applicants to determine the relative strength of each application and identify successful applicants.
Throughout the assessment process, BNM says it instituted strict governance and evaluation procedures to ensure robust, objective, and consistent assessments across all 29 applications received. Four levels of assessment were carried out, supported by a cross-functional technical team, a review team, and internal independent observers from BNM’s risk and legal departments. The final recommendations to the Minister were deliberated and endorsed by BNM’s Management Committee.
Bank Negara Malaysia Governor Tan Sri Nor Shamsiah said, “Digital banks are expected to further advance financial inclusion. By adopting digital technology more widely for everyday transactions, we can significantly increase opportunities for our society to participate in the economy – by overcoming geographical barriers, reducing transaction costs, and promoting better financial management.”
