The 5 Successful Digital Bank Licensees To Undergo 1-2 Years Operations Readiness – BNM

KUALA LUMPUR, April 29 – Bank Negara Malaysia (BNM), which announced the five successful applicants for the digital bank licences today, said the five will go through a one to two years operational readiness process validated by BNM and an audit process before they can commence operations.

In a statement today, the central bank listed the five whose applications had been approved by the Minister of Finance under the Financial Services Act 2013 (FSA):

• a consortium of Boost Holdings Sdn. Bhd. and RHB Bank Berhad;
• a consortium led by GXS Bank Pte. Ltd. and Kuok Brothers Sdn.
Bhd; and
• a consortium led by Sea Limited and YTL Digital Capital Sdn Bhd.

Another two applicants to be licensed under the Islamic Financial
Services Act 2013 (IFSA) are:
• 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.

Bank Negara Malaysia Governor Tan Sri Nor Shamsiah said the digital banks were 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.

“Digital banks can help individuals and businesses gain better access to more personalised solutions backed by data analytics. As businesses move online, digital banking also provides a safer and a more convenient way to transact,” she added.

Three out of the five consortiums are majority-owned by Malaysians namely Boost Holdings and RHB Bank Berhad, Sea Limited and YTL Digital Capital Sdn. Bhd. and KAF Investment Bank Sdn. Bhd.

All 29 applications received were thoroughly assessed pursuant to section 10(1) of FSA, and IFSA1, which require BNM to consider all the factors in Schedule 5 of the Acts and other relevant policy requirements, the central bank said.

These included the character and integrity of applicants, nature and sufficiency of financial resources, soundness and feasibility of business and technology plans as well as ability to meaningfully address financial inclusion gaps. Applications were assessed on their individual merits, as well as relative to other applications based on consistent evaluations of each assessment criteria.

BNM said it instituted strict governance and evaluation procedures to ensure robust, objective and consistent assessments across all 29 applications received. Four level of assessments 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.