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With us already one month into Q1 2022, the time for Malaysia to announce its first five digital banks is drawing near. A digital banking licence in Malaysia could provide non-bank companies the ability to conduct all banking services through platforms like an app. 

For a brief explainer, digital banking essentially opens up the horizon of financial technology beyond online banking.

Think whatever you can do online now (checking your balance, financial statement, transferring funds, etc.), expanded to include opening up a new bank account online, applying for loans, and more, without having to visit a physical bank. Learn more in our introduction to digital banking here.

Out of the 29 applicants vying for the licence, only a maximum of 5 consortia will be chosen by Bank Negara Malaysia (BNM). 

Successful applicants that meet all criteria will be expected to contribute towards greater financial inclusion in Malaysia. This will be done by offering products and services to address market gaps in the underserved and unserved segments, including retail, along with micro, small, and medium enterprises (micro SMEs).

More specifically, BNM is looking to identify 3 types of digital banks amongst applicants:

  • Specialists – Targeting a specific customer segment with tailored product offerings;
  • Ecosystem players – Leveraging brand, channel footprint, and pre-existing customer base from non-banking services; 
  • Innovative basic banking providers – Offering simple products for everyday banking while using technology for in-depth customer insights and hyper-personalisation.

Not forgetting that Malaysia is running on a dual banking system, those that get the licence must comply with Financial Services Act (FSA) and Islamic Financial Services Act (IFSA) regulations.

From what we can see, applicants with a local traditional bank in their consortium may not be at the forefront of getting a digital banking license. This is because incumbent banks are already permitted to provide their services online, and would not need a new licence to operate in the digital banking space.

Furthermore, those with a digital banking license in countries such as Singapore could be more favourable as a digital bank in Malaysia as well. In doing so, the consortium could leverage its user base and provide access for expansions in larger overseas markets. 

Now that we’ve run through the criteria and set some expectations, here are the 5 consortia, arranged alphabetically, that we think have the best chance of getting a digital banking license.

1. BigPay consortium with MIDF and Ikhlas Capital

The BigPay card and MIDF’s office in KL / Image Credit: BigPay and Wikimapia

Who they are: BigPay is a financial service by airasia Digital that provides users who register through its free app with a prepaid debit card that can be used wherever Visa or Mastercard are globally accepted. 

The fintech app has partnered with financial services, Malaysian Industrial Development Finance Berhad (MIDF), and Ikhlas Capital, a Singapore-based private equity fund manager to apply for a digital banking license.

Their potential: MIDF is focused on providing services in the areas of investment banking, asset management, and development finance while Ikhlas Capital has over US$300 million of assets under management.

This points to a potential for the consortium to have the assets and capital to build products and services aiding underserved markets in Malaysia, including individuals and businesses. Not to mention, BigPay has recorded 1 million card users as of December 2021, pointing to a market primed for its digital banking services.

Aside from being a portfolio company of one of Malaysia’s three unicorns, if BigPay were to be granted a digital banking licence, it’d be a homegrown success story that’ll do Malaysia proud.

Potential challenges: BigPay faces the ongoing issue of numerous scammers that have marred its reputation. 

Considering Malaysia’s digital banks are meant to serve communities with low financial literacy, becoming a digital bank puts a bigger target on BigPay’s back. 

To combat this, BigPay’s team has set up marketing campaigns and warnings to educate users against such scammers. Internal safeguards such as the launch of virtual cards which can be easily deactivated and deleted have also been placed to catch and shut down scammers before they appear. 

The company has reportedly seen a sharp decline in scam cases and overall complaints sent in by users, suggesting that these efforts are currently working.

2. Grab-Singtel consortium with Malaysian investors

Grab and Singtel offices in Singapore / Image Credit: Grab and Singtel

Who they are: Grab needs no introduction, what with the Nasdaq listed company’s super app taking over the country during the lockdowns. Meanwhile, Singtel is a Singaporean telecommunications conglomerate.

Their potential: The Grab-Singtel consortium has already secured its digital banking licence in Singapore. 

Having raised US$300 million for its financial services arm Grab Financial Group, the company has the capital to grow its financial services. It also has the resources and customer data to strengthen and personalise its current offerings within GrabPay, PayLater, and insurance.

In Singapore, Grab has a financing programme that provides drivers, merchants, and enterprises greater access to financial services. If localised for the Malaysian market as well, it can benefit local gig workers along with micro SMEs, fulfilling the expectations of a digital bank as outlined by BNM.

Potential challenges: It’s worth noting that BNM’s digital banking licensing framework highlighted a preference where the controlling equity in the licensed digital bank is held by Malaysians.

With Grab and Singtel headquartered in Singapore, it suggests that the Malaysian investors that are part of the consortium are meant to check this box for regulatory purposes. 

But it’s also interesting to note that Maybank has a 30% indirect stake in the company that operates GrabPay in Malaysia, so this could sway the stakes in the consortium’s favour.

Grab did not confirm the other Malaysian parties that are part of this consortium. However, the company said that it aims to continue spurring economic empowerment for Malaysians through its digital bank. 

3. iFAST consortium with Yillion Group, Koperasi Angkatan Tentera Malaysia, THZ Alliance, and 99 Speedmart 

iFAST office in China, KATM office in KL, and a 99 Speedmart outlet / Image Credit: iFAST, Foursquare, and Wikipedia

Who they are: Despite an unsuccessful digital banking licence bid in Singapore, Singaporean financial services company iFAST, along with China’s digital bank, Yillion Group, have put in their attempt for the framework in Malaysia. 

THZ Alliance (THZ) is an investment firm founded by Tengku Dato’ Dr Hishammuddin Zaizi, who is a cousin of the Sultan of Selangor. Koperasi Angkatan Tentera Malaysia (KATM) is a cooperative organisation for Malaysian military personnel. 

99 Speedmart is a convenience store brand best known for its affordable prices with 1,500 stores around the country.

If the application succeeds, the Singaporean fintech company will lead the consortium with a 40% stake, while the beneficial equity ownership of the consortium will be 57% Malaysian.

Their potential: iFAST is a wealth management fintech platform that is one of Malaysia’s only fully digital equity stockbroking services. 

Dictionary time: Stockbroking is a service which gives retail and institutional investors the opportunity to buy and sell equities.


The fintech platform also has the means to open access to provide credit for businesses. This can help SMEs drive their growth as they overcome financing barriers related to documentation, cash flow issues, strict credit criteria, and limited use of traditional financial services.

Yillion Group’s experience as a digital bank in China also poses its own benefits. Its ability to provide small-amount deposits and easy loans to individual customers in consumption scenarios such as purchasing food, clothing, housing, and transportation makes it an attractive choice to win the digital banking license. 

Such loans are also given to micro SMEs and merchants that provide goods and services to common people. With this service, underserved market segments like the B40 population can have access to loans and investment opportunities.

Together with Malaysian companies like 99 Speedmart, the consortium has the reach and existing customer base from B40 populations. 

Not forgetting that KATM and THZ supply governmental relations, the latter’s website has made a dedicated page advertising the benefits the consortium presents if chosen as a digital bank.

4. Sea Group-YTL

Sea Group and YTL’s headquarters / Image Credit: Sea Group and YTL

Who they are: The parent company of Shopee, Sea Group also has a game developer and payments company under it. Listed on the New York Stock Exchange (NYSE), it serves customers worldwide.

The Singapore-based company is bidding for a digital banking licence with Malaysian conglomerate YTL Group. Its activities span hotels, property, technology, infrastructure, and more. The group’s core business has US$17.1 billion in total assets. 

Their potential: Sea Group has already secured a digital banking license in Singapore. Its fintech ventures in Malaysia include ShopeePay and SPayLater, which have a wide regional user base. 

In Q2 of 2021, Shopee Malaysia amassed approximately 54 million users per month, indicating its relevance and strong brand presence in the local market. Not to mention, it has large data sets of customer behaviours and trends on how Malaysians spend their money.

Securing a digital banking licence will enable Sea Group to create personalised financial solutions that will be applicable to the needs of Malaysian consumers. With a local conglomerate under the consortium’s belt too, one could say this pushes them ahead of a contender like Grab.

5. AEON Credit Service and AEON Financial Service

One of the brand’s physical branches / Image Credit: AEON Credit Service

Who they are: AEON Credit Service is a non-bank financial institution (NBFI) providing services such as the issuance of credit cards, easy payment schemes, personal financing, and insurance.

To roll out its digital banking services, it will be partnering with its parent company, AEON Financial Service which holds a 60% stake in the consortium.

Their potential: AEON as a brand is a household name in Malaysia, with AEON Credit Service having a 25-year track record operating on our shores. 

With over 4 million customers, an ecosystem of 65 retail outlets, various card products, along with personal and vehicle financing, the group has its own infrastructure already built up. 

Leveraging its existing resources from customers and their data, industries, talents, technology, internally-generated funds, the NBFI should face little issue developing personalised products to fulfil BNM’s push for financial inclusion as a digital bank.


Sunway being a household name with activities in healthcare, property, retail, leisure, and remittance makes the Malaysian conglomerate’s consortium with LinkLogis and Bangkok Bank a strong contender as well.

Furthermore, it has a 51% stake in Credit Bureau Malaysia, which could play a valuable role in securing it a digital banking licence.

Ultimately though, all we can do at this point in time is share our predictions with information we already have. Only time will tell if our research-based predictions ring true, or if BNM will surprise us all with its final pick of the five digital banks.

  • Read other articles we’ve written on digital banking here.

Featured Image Credit: Anthony Tan, CEO and co-founder of Grab / Salim Dhanani, CEO and co-founder of BigPay / Forrest Li, CEO of SEA Group

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Vulcan Post aims to be the knowledge hub of Singapore and Malaysia.

© 2021 GRVTY Media Pte. Ltd.
(UEN 201431998C.)