Understanding Malaysia's Digital Banking Surge

Across the world, approximately 250 digital banks are reshaping the future of fintech, and Asia Pacific is home to 20% of these transformative entities. In this wave of digital evolution, Malaysia too is making significant strides.

The nation's central financial authority, Bank Negara Malaysia (BNM), has made its foray into digital banking by granting five digital bank licenses. Among the recipients is the Boost-RHB Consortium, steered by Axiata's FinTech division, Boost. This announcement underscores BNM's emphasis on sustainable and profitable digital banking models.

Let's delve into why the Boost-RHB Consortium emerges as a beacon in Malaysia's digital banking horizon:

  • Solid Foundation and Captive Audience: In recent years, Boost has set the stage for its digital bank. Notably, its AI-powered micro-financing enterprise has already seen significant success. By early 2023, Boost has a commendable record of disbursing over RM3 billion in financing across Malaysia and Indonesia.

  • Comprehensive Ecosystem: The mark of a thriving digital bank lies in its ability to utilize its inherent ecosystem, translating to reduced customer acquisition costs. Boost proudly houses an expansive fintech landscape, highlighted by its AI-driven micro-financing arm, an inclusive fintech app with a user base exceeding 10 million, a merchant platform with over 600,000 touchpoints, and a global payment gateway partnering with over 100 digital entities across Southeast Asia.

  • Tailored Financial Products: Although rising rates indicate market uncertainties, they are unlikely to deter budding digital banks. Firms like Boost, known for their short-term and efficient financial products, are poised to remain unaffected by significant asset-liability discrepancies.

The Road Ahead: As research suggests, the embrace of digital finance could elevate the GDPs of emerging nations by 6%, equivalent to a staggering $3.7 trillion, come 2025. Given this promising projection, all eyes are set on digital banks like the Boost-RHB Consortium to lead the charge.