Bank Negara Governor Tan Sri Nor Shamshiah stated that the primary consideration in choosing the 5 out of the 29 applicants for the digital bank license was that the recipients have what it takes to fill the gap where traditional financial services have not been able to, primarily addressing the underserved, unserved, the B40 community and gig workers.
She goes on to add that the successful applicants were able to manage their operations effectively including the ability to comply with financial, governance, and risk management to protect depositors. But over and above while background understanding of technology in financial products and being innovative is a prerequisite, having already deployed products and services to these market segments is the added advantage the others do not possess.
However, among the 5, analysts have identified two who will be in the driving seat if they deploy their digital banking services. Namely, the Axiata led consortia which is a collaboration between its fintech entity Boost and RHB Bank, the other being a consortium led by AEON Credit and MoneyLion that managed to secure the Islamic Digital Banking licence. Incidentally, both have already been supporting the community with their ewallet, insurance, and credit facilities, offering them to primarily the underserved and unserved market segment.
In terms of the acquisition, Boost was reported to have 9.6million users as of the end of 2021, while AEON has over a million members.
Gearing For The Big Launch
Boost has been working behind the scene in preparation for its Digital Bank status, the fintech platform has developed a large digitally engaged core customer base, large enough to use deep data to retrice insights on customer behavior and spending patterns. It has also been making significant investments in building technology platforms that can deliver efficient products to the unserved market. Let’s not forget, that Axiata does own Celcom and soon Digi, giving the group an enlarged portfolio of platforms to deploy its products and services.
RHB being the only traditional bank in the mix will revel in the position, the financial group has been adopting its own digital transformation, launching innovative offerings such as RHB MyHome app, RHB SME e-Solutions, SME Online Financing (first AI enabled Digital SME lending app in Malaysia), RHB Reflex and eKYC onboarding solutions. Partnering Boost will open up new avenues for RHB, while the bank brings an understanding of banking know-how to the partnership, Boost will open new markets for RHB.
Additionally, Boost also signed an MOU with Credit Guarantee Corporation Malaysia (CGC) in June last year through its subsidiary, Boost Credit for a potential digital bank guarantee, and became the first digital bank licensee to collaborate with CGC.
As for AEON partner MoneyLion, has been in the fintech space since 2013 and has amassed millions of user base in the United States, delivering services like mobile banking, investment solutions, and personalised solutions to middle-class Americans. The digital in Digital Bank, MoneyLion be the main artificial intelligence, data analytics, and technology provider.
“At present, MoneyLion Malaysia employs close to 300 engineers and data scientists in Kuala Lumpur who develop both the interface and underlying technology powering the award-winning MoneyLion app, catering to millions of users in the United States. We invest in the forefront of artificial intelligence technology powering end-to-end solutions from credit underwriting, fraud detection, design, and product operations since day one of our establishment,” said Foong Chee Mun, co-founder of MoneyLion Inc.
Expect to see these two companies trailblaze the market with new and innovative product offerings, analysts estimate the two will initially focus on their customer base before targeting the bigger community.
