AirAsia, Axiata and Grab reportedly eyeing digital banking licences in MY

Grab, Razer, AirAsia, Axiata and CIMB are among the companies that are reportedly vying for digital banking licences in Malaysia, Reuters reported quoting its sources. According to Reuters, some of the companies have kickstarted talks with consultancies regarding their entry into Malaysia's digital banking scene. This comes after the central bank's announcement to issue up to five licences to new online banks offering either conventional or Islamic banking, the report said.

Meanwhile, Reuters reported that Razer was in discussions with a local conglomerate for a Malaysian licence, while Hong Leong Bank and Maybank are also mulling bidding for digital banking licences. Quoting Razer Fintech's CEO Lee Li Meng, Reuters said the company has "extensive operations" in Malaysia's digital payments space and would consider the digital banking opportunity. A+M has reached out to the Grab, Razer, AirAsia, Axiata, CIMB, Hong Leong Bank and Maybank for comment.

Quoting credit rating agency Fitch Ratings, Reuters said the new entrants into the digital banking space are likely to focus their efforts on under-served retail and SME segments that usually have "higher risk profile and lower income".

Malaysia joins Singapore in opening up banking to new digital players. Earlier this month, the Monetary Authority of Singapore (MAS) confirmed that it received a total of 21 applications for digital bank licences. According to MAS, the digital bank licences will allow entities, including non-bank players, to conduct digital banking businesses in Singapore. Meanwhile, Thailand is also gearing up to establish independent digital banks in a bid to catch up with other Asian markets that are embracing digitisation in their banking services.