Fintechs Challenge Traditional FIs in Malaysia Digital Bank Race

A crowded field of contenders are vying for the five licenses on offer by Bank Negara Malaysia. The race for digital banking licenses digital banking license is heating up, with more than a dozen applications involving over 50 companies submitted before the closing date on Wednesday.

With the exception of a few players, most of the digital banking aspirants have not publicized their aspirations. However, a Grab-Singtel joint venture and Singapore-based investment solutions firm iFAST Corporation confirmed their applications on Thursday.

The notification on the grant of the license will be made by the first quarter of 2020, Bank Negara Malaysia said.

Among the contenders are also Malaysian conglomerate Sunway, which teamed up with Tencent-backed Chinese firm Linklogis and Bangkok Bank. Likely applications also include e-commerce giant Sea Group, gaming company Razer Fintech and telco Axiata, which previously expressed an interest in the license.

At least five banks — CIMB Group Holdings, Affin Bank, Hong Leong Bank, AMMB Holdings and Standard Chartered Bank Malaysia — had signaled their interest in pursuing a digital banking licence in Malaysia.

AirAsia’s fintech unit BigPay also announced its bid for a license on Thursday. The company is partnering with Malaysian Industrial Development Finance – a unit of the country’s largest asset manager Permodalan Nasional – and Singapore-based private equity firm Ikhlas Capital.

BigPay was launched in 2018 by AirAsia as an e-wallet, hoping to leverage the low-cost carrier’s dominance in regional air travel in Southeast Asia.

BigPay Bank will allow us to execute deeper on our mission to build a connected financial future for Malaysian consumers and entrepreneurs, Salim Dhanani, CEO and founder of BigPay, said in the announcement.