Axiata Group has revealed that it expects to launch its digital bank by the end of this year, with a range of product offerings to be gradually rolled out starting then. These include deposits for current and savings accountholders and insurance – among other products.

In a media conference, chief executive officer and managing director of Axiata Group, Vivek Sood also said that the digital bank – which has an initial capital commitment of about RM100 million – will likely be profitable over the next three or four years. He explained that he is optimistic about this potential outcome because Axiata Group has had enough prior experience of doing similar things, which can be tapped into to help run and manage the bank.

“For example, we have done around one and a half billion in loans to micro, small, and medium enterprises (MSMEs) within our existing business within Boost Credit. We also have a large number of a half million active customers on a monthly basis which could potentially be the customers of the digital bank from day one. We are preparing our plans and would require the central bank’s necessary approvals before we can launch it,” he said.

Vivek also shared that although he does not foresee any obstacles for the digital bank now, the launch process will take some effort as it requires a thorough review and approval from Bank Negara Malaysia (BNM). As such, Axiata has been doing its due diligence, and is working closely with the central bank to meet all the necessary requirements. Of particular concern to the group is the implementation of a robust cybersecurity measures, which is crucial to protect its users’ privacy, he said.

“Not only that, the operational review done by the third party, as well as further review done by the central bank, will take into consideration whether the platforms are adequately secured,” Vivek commented.

BNM had announced the successful applicants for its five available digital banking licences back in April 2022 – three of which were provided under the Financial Services Act 2013, and another two under the Islamic Financial Services Act 2013. Axiata’s unit, Boost Holdings Sdn Bhd, had joined hands with RHB Bank to form one of the consortiums that successfully secured one of the licences issued. Upon securing the licences, these applicants will undergo a period of operational readiness that will be validated by BNM through an audit before they can commence operations – a process that may take between 12 to 24 months.

In the meantime, some conventional banks have also rolled out their own digital banks, such as Affin Bank’s A1addin, Bank Islam’s Be U, and Al Rajhi Bank’s Rize. Other banks – such as Maybank and UOB – are also making great investments in improving their online and mobile banking apps to cater to their customers’ digital banking needs.  

(Source: Bernama)

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