KUALA LUMPUR (Jan 8): Two more digital banks have received regulatory approval to begin commercial operations, namely Axiata Group Bhd and RHB Bank Bhd-linked Boost Bank, as well as AEON Bank linked to AEON Credit Service (M) Bhd.
Boost Bank Bhd, the 40:60 digital bank venture by RHB and Boost Holdings Sdn Bhd, has received the Ministry of Finance's (MOF) agreement for the issuance of a physical digital bank licence, which takes effect from Jan 15.
This follows a letter from Bank Negara Malaysia on Monday notifying that the central bank is satisfied with the operational readiness review of Boost Bank, formerly known as Boost Bhd, the companies said.
The regulatory approval was received “ahead of the scheduled timeline”, said the companies. Boost Holdings is a 75.43%-owned unit of telco outfit Axiata.
“Spearheading the team is Fozia Amanulla, who was recently appointed as the CEO of Boost Bank,” they said in a statement.
Fozia leads a digital bank team, encompassing expertise across technology, information security, product, risk and compliance, and more, leveraging financial technology (fintech) talent from Boost, banking expertise from RHB, and new capabilities from the wider industry, the statement added.
As part of the conditions for the regulatory approval, Boost Holdings and RHB will provide adequate funds “to ensure that Boost Bank has sufficient funds to satisfy all its remaining obligations and liabilities due, including customer deposits” in the event the digital bank is wound down.
Fozia, in the statement, said that Boost Bank is “uniquely positioned to offer embedded finance” — essentially the integration of financial services into non-financial offerings — backed by the consortium’s combined ecosystem and wealth of data.
Boost Holdings currently has over 10 million customers able to enjoy digital wallet services.
Separately, AEON Credit also said it had received the nod from BNM and the MOF to run AEON Bank (M) Bhd, formerly known as ACS Digital Bhd, to commence what would be Malaysia’s first Islamic digital bank.
AEON Bank is also a subsidiary of AEON Financial Service Co Ltd.
“As part of one of Malaysia’s most recognised retail household brands, we aim to provide accessible, inclusive, and shariah-compliant digital banking solutions to our AEON group of customers as well as to all Malaysians,” said AEON Bank CEO Raja Teh Maimunah in a statement.
“With the bank within its stable group of companies, the AEON group aims to further expand and enhance the provision of its services to its retail and wholesale customers as well as ecosystem partners, such as its auto dealers, merchants, suppliers, and tenants, among others,” AEON Credit said in the statement.
Separately, Boost Bank said it will kick off the alpha testing phase “involving internal employees, family, friends, and a selected group of customers”.
AEON Bank, meanwhile, said it will begin an “exclusive beta testing phase with AEON group employees”, with a target to unveil its phased roll-out within the first half of this year.
The two consortiums are among five successful applicants of BNM’s digital bank licences in April 2022.
The first to reach commercial operation was GXBank, launched by a consortium led by Grab-linked GXS Bank Pte Ltd and Kuok Brothers Sdn Bhd. GXBank was officially launched on Nov 30 last year.
The other licence holders are a consortium led by Singapore’s Sea Ltd and a unit of the YTL group, and a consortium led by KAF Investment Bank Bhd.
The licences won by AEON and KAF are for Islamic digital banks.