SINGAPORE/KUALA LUMPUR (Reuters) – Ride-hailing from the group has to Seize, the gaming company Razer, AirAsia, a telecommunications company, Axiata, and lender CIMB are among the firms that apply for a digital banking licence in Malaysia, and sources have told Reuters.
FILE PHOTO: A Suit and logo will be displayed at the Money 20/20 Asia pacific Fintech event in Singapore, March 21, 2019. REUTERS/Anshuman Daga
Some of these companies have started to talk to the agencies as they explore a possible entry into the digital bank, the people familiar with the matter said.
In Asia, the regulators, the creation of a bank for the new digital players, and, encouraged by a boom in mobile connectivity, and the promise of the tech companies are not bound to find in physical stores, and the provision of low-cost financial services.
This month, Singapore said it received 21 applications, five digital banking licences to be issued.
In December, Malaysia’s central bank has announced plans to issue up to five licenses for new banks, conventional or Islamic banking under the proposed licensing framework will, it is to be completed by the end of June.
“The path to profitability will be its regional expansion in the ASEAN (Association of Southeast Asian Nations),” said Sivaram Krishna, who leads digital banking strategies for the Company in South-east Asia.
He said that anyone applying for a license in Singapore, would have to consider in order to be licensed in Malaysia as well.
“The minimum capital requirement is significantly lower for them, and it’s a much bigger market,” he said.
Malaysia has said it will give preference to applicants whose shareholders ‘ equity is monitored by a local company.
The people have said, Razer, whose fintech unit, to lead a consortium for a Singapore was in talks with a local consortium, a Malaysian license. The local money lenders, Hong Leong Bank and Maybank are considering bidding for a license, the people said.
The Razer Fintech’s CEO, Lee Li Meng, told Reuters the company had expanded operations into Malaysia and is in the digital payments space, and it would be to evaluate the digital-banking opportunity.
One option is for Axiata, it is by means of Axiata’s Digital Services, which houses the group’s digital venture and is the owner of the e-wallet system a Boost. AirAsia’s financial services venture, BigPay, it will work with an e-wallet, which is equipped with a pre-paid card.
Ant Financial, as well as the Touch-n-Go’s, and an e-wallet, it is the largest e-wallet service in Malaysia, with 6.9 million registered users. CIMB, which owns a majority stake in Touch n’ Go’s, is the exploration of an authorization to bid, the people said.
In a report issued on Wednesday, Fitch Ratings said the new entrants would be likely to target “under-served retail and small and medium-sized business segment, which tend to have a higher risk profile and lower income.
Axiata Digital said that it had been identified of interest for digital banking. Grab AirAsia declined to comment. CIMB did not respond to Reuters ‘ queries, while Ant Financial said it was too early to comment.
Maybank declined specific comment, but said that under the existing authorisation, it can also function as a digital bank without having to apply for a new license.
FILE PHOTO: A woman walks past an AirAsia counter at the Kuala Lumpur International Airport in Sepang, Malaysia, on 22 July 2019. REUTERS/Lim Huey Teng
Among Malaysia’s proposals, the digital bank products and services to address market gaps in “under-served and new market segments” and the maintenance of a 100 million ringgit ($24.5 million) in the share capital and, in the first instance and that ramp up to 300 million ringgit.
($1 = 4.0730 ringgit)
($1 = 1.3499 Singapore dollars)
Reporting by Anshuman Daga in Singapore, and Liz Lee in Kuala Lumpur; Additional reporting by Alun John is in Hong Kong; Editing by Christopher Cushing and Barbara Lewis