After setbacks, Malaysia’s 2 remaining digibanks eye October launch: sources

Malaysia’s two remaining digital banks are expected to launch by October, sources familiar with the matter tell Tech in Asia, following reports of delays.

Consortia led by KAF Investment Bank and YTL-Sea are working to meet the deadline stipulated by the country’s central bank, Bank Negara Malaysia (BNM), for the launches of their digital banks.

Malaysia’s central bank Bank Negara Malaysia is pushing for all six of the country’s digital banks to launch by the end of this year. /Photo credit: Wikimedia Commons

The YTL-Sea digital bank is owned by local conglomerate YTL Corporation and Singapore-based internet giant Sea Group. Meanwhile, the KAF consortium comprises Malaysian banking player KAF Investment Bank, used-car marketplace Carsome, and financial services providers MoneyMatch and Jirnexu.

Two sources also told us that the KAF digital bank is looking to target small and medium enterprises as well as startups.

KAF and YTL didn’t reply to Tech in Asia’s requests for comment.

BNM had issued its inaugural digital bank licenses to five consortia, with three already operational: GXBank, Boost, and Aeon.

Local media The Star, however, reported on July 16 that KAF and YTL-Sea’s digital banks have been delayed due to technical issues.

Quoting an anonymous source, the daily said that the “digital channels” of these banks were incomplete, causing BNM to withhold its approval for their virtual services to go online. The source didn’t provide further details.

The KAF consortium had initially aimed to go live by late 2023 or early 2024 but has fallen behind schedule.

Meanwhile, YTL-Sea said it remained committed to launching by the end of the year.

BNM had announced the five consortia for its maiden digital banking licenses on April 2022 after an evaluation period marked by intense lobbying.

YTL’s headquarters in downtown Kuala Lumpur. The conglomerate is partnering internet giant Sea to roll out a digital bank. Photo credit: YTL Corp.