Malaysian budget airline AirAsia Group Bhd’s FinTech arm BigPay has submitted its application for a digital banking licence to the country’s central bank Bank Negara Malaysia.
BigPay has put together a consortium of strategic partners to support its application: Malaysian Industrial Development Finance Bhd (MIDF), a unit of the country’s largest asset manager Permodalan Nasional Bhd, private equity firm Ikhlas Capital and a foreign conglomerate with fintech expertise.
Singapore-headquartered Ikhlas Capital is a private equity firm founded by CIMB Group former chairman and CEO Nazir Razak. Nazir is the chairman of Bank Pembangunan Malaysia Bhd, a development financial institution wholly owned by the Malaysian Government through the Minister of Finance Inc.
Each of the consortium partners is “contributing something unique for the success of BigPay Bank,” BigPay said in a statement on Thursday.
“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,” it added.
BigPay’s consortium will be joining a crowded field for digital bank licenses on offer. Malaysia’s central bank said it would issue up to five licenses by early 2022, and the deadline for the applications is the end of June 2021.
Other notable applicants that have officially announced their application include Grab-Singtel venture, Axiata-RHB consortium, Paramount-Star Media Group, iFAST Corporation Ltd, among others.
Malaysia’s move comes at a time when regulators across Asia including Singapore, Hong Kong, and the Philippines are opening up the banking industry to digital players, encouraged by higher smartphone penetration and better internet connections.
Central Banks and consumers also hope that digital banks could bring financial inclusion to underserved segments, helped by advanced technology.
“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 license, we’ll be able to reach more Malaysians with a wider range of services — all with the goal of building a stronger Malaysia,” said BigPay Founder and Chief Executive Officer Salim Dhanani.
“AirAsia Digital has a broad ecosystem of MSMEs and consumers, particularly in the Bottom 40 percent (B40) segment. BigPay, a subsidiary of AirAsia Digital, will have access to distribute financial services to this ecosystem adding overall value to everyone within it,” AirAsia Digital President Aireen Omar said.
AirAsia Group is in the midst of building its non-airline, digital businesses, and superapp as most of its planes were grounded due to the ongoing COVID-19 pandemic. AirAsia Group is reportedly operating at 19 percent of its pre-pandemic capacity, logging just over 2,000 outbound flights planned for the week of July 19, 2021 compared with 10,800 for the same week in 2019, according to an aviation news portal Simple Flight.
MIDF Group is a financial services provider in three core business areas, investment banking, development finance and asset management.
Featured image credits: BigPay