Rush for digital bank licence

PETALING JAYA: More contenders vying for a digital bank licence in Malaysia, including Managepay Systems Bhd (MPay), PUC Bhd, AirAsia Group Bhd-linked BigPay and iFast Corp Ltd, have submitted their bids to Bank Negara Malaysia as applications closed on Wednesday.

With its experience of launching various regulated financial products, BigPay Capital Sdn Bhd, a wholly owned subsidiary of Big Pay Pte Ltd being a subsidiary of AirAsia Group Bhd, wants to further its reach.

BigPay has put together a consortium of partners to support its application: Malaysian Industrial Development Finance Bhd, Ikhlas Capital and a foreign conglomerate with fintech expertise. Each of the consortium partners is contributing something unique for the success of BigPay Bank. In addition to the consortium partners, BigPay is part of the AirAsia Group and has access to a broad ecosystem that includes e-commerce merchants and consumers, insurance and telecoms.

Over the past four years, BigPay has added a number of regulated financial products to its offerings – from e-money and international remittance to micro insurance and budgeting – with the goal of being a one-stop solution for Malaysians’ financial needs. In the coming months, BigPay will launch a number of new services including responsible credit, micro savings and an offering for micro, small and medium enterprises (MSMEs) and freelancers.

“BigPay Bank will allow us to execute deeper on our mission to build a connected financial future for Malaysian consumers and entrepreneurs. If we’re given the licence, we’ll be able to reach more Malaysians with a wider range of services,” said BigPay CEO & founder Salim Dhanani.

Next is a PUC-led consortium with two state governments and a conglomerate, making it a wholly Malaysian consortium. The consortium members recognise the gap presented by the under-served segments which include MSMEs and B40 segment consumers.

PUC’s digital ecosystem, Presto, encompasses e-commerce, logistics, e-wallet, loyalty, financing and payment solutions which will form a natural complement to the digital bank and enable it to drive innovation and boost digital transformation through its service offerings.

Both the participating states’ populations include significant proportions within the B40 segment which will be targeted as the initial customer base. In addition, the numerous un-served and under-served MSMEs within these two states will be given access to a user friendly, mobile-based digital banking network including micro-financing and other financial services.

MPay’s application is supported by three local partners Trustgate Bhd, Crescent Capital Sdn Bhd and RichWorks International Sdn Bhd.

“These partners will each bring a unique value proposition to complement our proposed digital banking services to the undeserved and inadequately served MSMEs and the communities they serve,“ said MPay founder and group managing director Datuk Chew Chee Seng.

MPay is positive about the submission and partnerships formed. All three partners are bumiputera-controlled entities and have expressed their interest to invest up to 45% in aggregate in the equity of MPay’s wholly owned subsidiary ManagePay Services Sdn Bhd in the event the application is successful and subject to regulatory’s prior approval.

MPay’s brand promise is an end-to-end fintech and e-commerce ecosystem that offers MSMEs and corporates the fundamental building blocks to do business in the digital economy. Aptly named the Digital Economy Connected Community ecosystem, it currently operates businesses in e-money and Mastercard prepaid card issuance including white-label services, omni-channel e-payment, P2P transfers, e-commerce platform and solutions, P2P financing and small ticket sized direct lending.

“A digital bank licence will allow us to consolidate our multi-service under a multi-license ecosystem into a solution orientated, integrated bank that leverages technology to offer a complete suite of solutions to our targeted customer base,“ added Chew.

Trustgate’s digital technologies will be pivotal in meeting the cybersecurity standards in the digital era to effectively combat hacking and online frauds. These technologies include digital ID, e-KYC, digital onboarding, digital signing and multi-factor authentication capabilities.

Crescent Capital, Mirzan Mahathir’s flagship investment and consulting company, brings with it opportunities to expand MPay’s reach and infrastructure. Mirzan sits on the board of Trustgate and Petron Corp (the Philippines) and his experience in capital market activities will play a significant role in rolling out bite sized investment opportunities for the underserved segments.

Coaching and business training provider RichWorks International founded by Datuk Wira Azizan Osman is a household name for MSME entrepreneurs with his training and mentoring programmes.

Singapore-listed wealth management fintech platform iFast Corp also led a consortium that builds on the strengths of both local companies in Malaysia as well as international players. iFast Corp will own a 40% stake in the digital bank if the application is successful. The beneficial equity ownership of the consortium will be 57% Malaysian.

The Malaysian consortium partners are Koperasi Angkatan Tentera Malaysia Bhd, THZ Alliance Sdn Bhd, and Lee Thiam Wah, founder and major shareholder of 99 Speed Mart Sdn Bhd. The experience and market reach of these consortium partners will enable iFast Bank to better address the needs of the underserved market, thereby improving financial inclusion and growth in Malaysia.

Internationally, the iFast Bank consortium comprises Yillion Fintech Pte Ltd which provides the core digital banking technology and capabilities for Yillion Bank. Yillion Bank is one of the four digital banks in China founded by Zonfar Financial Holding and Hong Kong-listed Meituan Dianping.

“Our consortium partners are excited with the possibility of getting a digital bank licence in Malaysia, which will allow us to tap into the exciting digital banking opportunities in Malaysia as well as to develop a truly-global digital banking and fintech business model,” said iFast Corp chairman and CEO Lim Chung Chun, a Malaysian.

Zooming in on the local opportunities, Lim shared how iFast Bank can create positive change for the unserved and underserved market segments such as the B40 population in Malaysia.

“With the synergistic capabilities within our consortium, the solutions offered for the B40 are ones that will provide immediate benefits and results – such as free life insurance, interest-free loans for daily necessities, and micro investments and insurance. iFast Bank is ready to serve the B40 segment for these purposes,” said Lim.

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