RHB, Boost secure Malaysian digital bank license

Boost will own 60% of the digital bank whilst RHB will own 40%.

Boost, RHB Banking Group and the fintech arm of telecommunications company Axiata Group Berhad, has secured a digital bank license from Bank Negara Malaysia (BNM).

Boost and RHB formed a digital bank consortium in June 2021, with Boost owning a majority stake of 60% and RHB owning the remaining 40%. Dato’ Izzaddin Idris, president and CEO of Axiata, serves as chairman of Boost.

The parties aim to combine their expertise in specific areas – Boost’s extensive fintech experience and RHB’s intimate knowledge in banking services and risk management–to build a suite of affordable and accessible digital banking and financial solutions and create greater access for financial inclusion digitally amongst the underserved and unserved segments.

“Securing this license in our home ground delivers multi-pronged opportunities to address ongoing digitalisation shifts across our businesses,” Dato Idris said, commenting on the license.

“On one hand, we can now deliver financial inclusion to underserved and unserved segments such as the Micro and Small and Medium Enterprise community as they scale for growth to support the nation’s economic recovery. At the same time, we’re able to actively meet demand from our expanding digital-first consumer base seeking convenient, improved, and secure user experiences for banking and credit access,” he added.

Malaysia had long been ripe for a digital banking revolution, with over 6 in 10 or 66% of Malaysians surveyed by the 2021 Visa Consumer Payment Attitudes study indicating interest in using digital banking services. Globally, almost 250 digital banks were established globally by the end of 2020, of which 50 of the digital banks are based in the Asia Pacific region.

This is also reportedly evident within RHB, with 93% of all transactions being digital in 2021, which is a significant increase from 64% in 2017.