Axiata & RHB Bank team up to apply for BNM’s digital bank licence

Axiata Group Berhad (Axiata) and RHB Banking Group (RHB) announced yesterday that they have joined hands to apply for the digital bank licence which falls under the framework issued by Bank Negara Malaysia’s (BNM), last year.

The central bank issued policy on Licensing Framework for Digital Banks is to license new players with innovative business models and are expected to serve the economy and contribute to the well-being of Malaysians.

RHB’s partnership is specifically with Axiata’s fintech unit, Boost Holdings Sdn Bhd, and the consortium hopes to strengthen the application as BNM has announced that it will only issue five licences for online-only lenders. According to a statement released by Axiata, both parties consider this partnership as a robust platform to drive innovation, increase competitiveness and accelerate the country’s digital transformation and financial inclusion ambition.

If the application is approved by BNM, Axiata said Boost would own a majority stake of 60% in the digital bank joint venture, while RHB would hold the remaining 40%, with a minimum issued share capital of RM100 million.

According to Axiata, it has signed up as a major commercial partner on joint Go-To-Market activities with the Digital Bank on products and services which will benefit the customers of both parties while other commercial partners are still being finalised.

On the other hand, while RHB already offers customers its own online banking services, the planned partnership with Boost is said to focus on services for underserved retail customers and small and medium-sized businesses.

The statement released by Axiata also mentioned that both parties will seek to expand on Boost Holdings’ fintech experience which was developed through Aspirasi, a digital micro-financing and micro-insurance provider and the Boost e-Wallet, a top three e-wallet and lifestyle app.

“For the past five years, Axiata has been doubling down on our efforts to strengthen the foundation of our financial inclusion objectives (and) through Celcom and platforms such as Aspirasi and Boost e-Wallet, we have made great leaps in the provision of innovative and inclusive digital financial services,” said Axiata’s President & Group CEO Dato’ Izzaddin Idris. “As we inject our deep fintech experience and data-driven insights to break new grounds in digital inclusion, complemented by RHB’s proven risk and compliance experience, the establishment of a digital bank is a natural next step in expanding and deepening our ongoing momentum to deliver Malaysia’s digital transformation objectives.”

The partnership will also leverage RHB’s Agile@Scale experience in building digital offerings such as the RHB MyHome app, SME integrated eSolutions, Digital SME Financing App (first AI enabled Digital SME lending app in Malaysia) and eKYC on-boarding solution to spur similar innovation for Digital Bank customers.

“Ingrained within our strategies at RHB is the firm belief that success in the future is underpinned by the ability to expand ecosystem offerings with trusted partners to solve unmet needs and provide highly tailored solutions for customers in every segment,” said Group Chief Strategy Officer of RHB Banking Group, Dr. Siew Chan Cheong.

“Ecosystem partnerships between RHB and Axiata will benefit our SME and retail customers across SEA (and) the Digital Bank partnership with Axiata is proof of our commitment to continuously innovate at RHB, with the goal of expediting the build of convenient and impactful solutions for the underserved.”

Complementary to the Digital Bank, RHB and Axiata are also exploring more opportunities to enhance their joint customer ecosystems and in recognition of the strength of their respective SME ecosystems, one potential initiative involves providing combined solutions to SMEs.

Axiata currently serves more than 250,000 merchants and micro businesses via their Boost e-Wallet and Aspirasi microfinancing businesses, whereas RHB offers more than 200,000 of its SMEs access to a connected ecosystem of SME banking and business solutions.

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