PETALING JAYA: Pertama Digital Bhd has decided to redirect its focus towards bolstering the government’s digital initiatives, scrapping its neobank project announced last year.
CEO Saifullah Akhtar stated that this shift is in response to Malaysia’s accelerated digitalisation efforts which present significant opportunities for the company.
On why it decided to discontinue the neobank plan, he said, “When it comes to something heavily regulated like neobank, even the term ‘neobank’ is protected as Bank Negara Malaysia does not want non-banks to represent themselves as banks.
“We have observed a significant influx of capital from our competitors into retail digital banking. This includes the five licensees (digital banks), e-wallets, and incumbent banks engaging in internet banking and related activities,” he told reporters after Pertama Digital’s AGM today.
Saifullah said that while certain areas in the banking sector are adequately served, business banking and government banking remain outdated, resembling practices in the 1990s. “Therefore, what we are planning to do now is work with existing banks to help them to become more competitive when it comes to their integration with companies,” he added.
Regarding its regularisation plan, CFO Sivabalan Poobalasingam said Pertama Digital may consider scaling up its existing businesses or exploring potential acquisition opportunities.
“One is we can scale up our existing business and also roll out new products and services, which we are doing. These initiatives are within the confines of existing business and will get us into profitability in Q4’23 and Q1’24. Secondly, we are looking at acquisition possibilities. For this purpose we are doing capital raising.
“The first tranche of the capital raising is ongoing. We got the approval from Bursa Malaysia for the first tranche of fundraising last week which we partnered with Macquarie Bank. And the second tranche of capital raising would be packaged together with any potential acquisition that we would then submit the regularisation plan to Bursa for approval,” Sivabalan said.
In a Bursa filing on May 23, 2023, the company said the Malaysian government acknowledges the IT sector as crucial for socio-economic growth and has launched the Malaysia Digital Economy Blueprint (MyDigital) to stimulate the sector and promote digitalisation across industries.
“Many of (the government’s) MyDigital objectives align with the group’s business plans. Leveraging support from public agencies, the group plans to incorporate all government digital initiatives into its strategies and actively participate in executing the MyDigital blueprint.
“The group is committed to remaining relevant to national goals by proposing innovative, risk-managed solutions, backed by robust executive capabilities. Recognising the challenges faced by those with limited digital skills in adapting to the new digital economy, the group’s key goal is to identify and assist this demographic. The company, through DVSB, is implementing the ‘coin conversion project’,” it said.
This initiative involves placing kiosks at selected commercial areas where the general public, including retailers and consumers, can sell their Malaysian coins in exchange for money. The funds will be credited to their respective bank accounts using the company’s mobile application called ‘MyPay.’ Alternatively, individuals can purchase coins from these kiosks.
The company generates transaction fees based on the total value of coins bought or sold through the kiosks by the public.
“The project aims to establish a sustainable ecosystem for the recirculation of used coins, as they hold monetary value and are commonly used in daily cash transactions. As a result, there is expected to be a positive demand for these coin conversion services,” it stated in the filing.
Additionally, the company operates several other services. These include the Malaysian government SMS gateway known as mySMS 15888, MyPay (a mobile application facilitating check-and-pay transactions with government agencies), and eJamin (a digital bail payment solution used in Malaysian criminal courts).
“With further plans in development, which will be announced at the appropriate time, the mobile and digital solutions businesses of the group have a promising outlook,” the company said in the filing.
