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Bank Negara Malaysia announces five successful applications for digital banking licences

Bank Negara Malaysia has finally announced the five successful applications for digital banking licences in the country. In a statement, the bank said the five successful applicants were approved by the Minister of Finance.

Three applications will be licensed under the Financial Services Act 2013 (FSA). They are a consortium of Boost Holdings Sdn Bhd and RHB Bank Bhd, a consortium led by GXS Bank Pte Ltd and Kuok Brothers Sdn Bhd, and a consortium led by Sea Ltd and YTL Digital Capital Sdn Bhd.

Another two applications are to be licensed under the Islamic Financial Services Act 2013 (IFSA). They are a consortium of AEON Financial Service Co Ltd, AEON Credit Service (M) Bhd, and MoneyLion Inc and a consortium led by KAF Investment Bank Sdn Bhd.

Only three out of the five consortiums are majority-owned by Malaysians namely Boost Holdings and RHB Bank, Sea and YTL Digital Capital, and KAF Investment Bank.

The statement added that all 29 applications received were thoroughly assessed and covered the character and integrity of applicants, nature, and sufficiency of financial resources, soundness and feasibility of business and technology plans as well as ability to meaningfully address financial inclusion gaps.

“Applications were assessed on their individual merits, as well as relative to other applications based on consistent evaluations of each assessment criteria. This horizontal review is based on the assessment criteria applied across all applicants to determine the relative strength of each application and identify successful applicants,” stated Bank Negara.

Throughout the assessment process, four levels of assessment were carried out, supported by a cross-functional technical team, a review team, and internal independent observers from the central bank’s risk and legal departments. The bank also stated that the final recommendations to the finance minister were deliberated and endorsed by the central bank’s Management Committee.

Bank Negara Malaysia Governor Tan Sri Nor Shamsiah said, “Digital banks are expected to further advance financial inclusion. By adopting digital technology more widely for everyday transactions, we can significantly increase opportunities for our society to participate in the economy – by overcoming geographical barriers, reducing transaction costs, and promoting better financial management.”

“Digital banks can help individuals and businesses gain better access to more personalized solutions backed by data analytics. As businesses move online, digital banking also provides a safer and a more convenient way to transact,” she added.

Following this announcement, the successful applicants will undergo a period of operational readiness that will be validated by Bank Negara Malaysia through an audit before they can commence operations. This process may take between 12 to 24 months.

In line with the 5 strategic thrusts stated in the Financial Sector Blueprint 2022-2026, the central bank will continue to work with the financial and fintech industries and relevant stakeholders to continuously enhance access to financial services throughout the country and across all segments of society.