Editor’s note: This interview is part of a Q&A series with some of the contenders vying for a digital banking license in Malaysia.


Losing out the bid for a digital wholesale bank license in Singapore last year has not stopped Singapore-listed wealth management firm iFast Corp Ltd to continue its digital bank ambition.

The company announced on June 30 that it has submitted an application for a digital bank license in Malaysia.

iFast will be joining a crowded field vying for digital bank licenses which include ride-hailing giant Grab-Singtel consortium, which bagged a digital full-bank license in Singapore last year.

A diverse range of parties has submitted applications for the digital bank licenses in Malaysia, ranging from banks, industry conglomerates, technology firms, e-commerce operators, FinTech players, cooperatives, and state governments. Bank Negara Malaysia is expected to issue up to five licenses by early 2022. The central bank said it has received 29 applications for the digital bank licenses.

Other notable applicants that have officially announced their applications include Axiata-RHB consortium, Paramount-Star Media Group, iFAST Corporation Ltd, AirAsia’s BigPay-MIDF-Ikhlas Capital consortium, AEON Credit Service (M) Bhd, among others.

In an interview with TechNode Global, IFast Chief Executive Officer Lim Chung Chun said the consortium will target the Bottom 40 percent (B40) segment of Malaysia’s population, who is clearly the most unserved and underserved, should it win a digital banking license.

“With the synergistic capabilities within our consortium, we aim to offer solutions that will provide immediate benefits to the B40 segment, such as free life insurance, interest-free loans for daily necessities, and micro-investments and insurance,” he said.

Outside of Malaysia, iFast, which has operations across Asian markets like Singapore, Hong Kong, Malaysia, China, and India, is also targeting global depositors who have limited access to the right deposit and wealth management solutions in their own countries.

“This target segment would provide the digital bank with low-cost deposits that can be channeled into low-cost loans for the local underserved and unserved segment,” he said, explaining how iFast would have an edge against other contenders.

To compete for the digital banking license, iFast has put together a consortium with both Malaysian and international partners. The Malaysian consortium partners are army credit co-operative Koperasi Angkatan Tentera Malaysia Bhd, THZ Alliance Sdn Bhd, and Lee Thiam Wah, the founder and major shareholder of supermarket chain 99 Speed Mart Sdn Bhd.

THZ Alliance is a private investment holding company founded by Y.M Tengku Dato’ Dr. Hishammuddin Zaizi Y.A.M Tengku Azman Shah Alhaj, a businessman and a cousin to the Sultan of Selangor, Malaysia’s richest and most populous state.

Internationally, the iFast has roped in 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.

iFast will own a 40 percent stake in the digital bank if the application is successful. The beneficial equity ownership of the consortium will be approximately 57 percent Malaysian, it said in the statement announcing the application.

While some of the consortiums TechNode Global talked to decline to comment on the timeline when they expect to break even, Lim said the company expects to turn profitable by the time it exits the foundation phase, which is expected to be in three to five years’ time.

According to Licensing Framework for Digital Banks published by Bank Negara, the initial three to five years of operations of a licensed digital bank functions as a ‘foundational phase.’

Incorporated in the year 2000 in Singapore, iFast operates a FinTech wealth management platform in Asia, with assets under administration (AUA) of S$17.54 billion ($13.06 billion) as at June 30, 2021, its latest financial statement showed.

iFast was predominantly a unit trust investment platform. In recent years, the group, which was listed on the SGX Mainboard in 2014, has broadened its investment products and services, providing a comprehensive suite of wealth management solutions to financial advisory firms, financial institutions, banks, multinational companies, as well as retail and high net worth investors in Asia.

The group offers access to over 13,000 investment products including unit trusts, bonds, and Singapore Government Securities, stocks and exchange-traded funds, and insurance products. Other services include online discretionary portfolio management services, research and investment seminars, IT solutions, and investment administration and transaction services. The company is also present in Hong Kong, Malaysia, China, and India. Based on its shares price on Friday at S$8.79 ($6.55), the company has a market capitalization of S$2.44 billion ($1.82 billion).

In the interview, Lim also explained the competitive advantage iFAST Corp has against other contenders. He said the consortium will also be able to leverage the expertise and resources from its partners, especially Yillion, an existing digital bank in China.

Below is the edited excerpt of the interview:

What are the opportunities iFast sees in setting up a digital bank in Malaysia? Where is the gap and how iFast would want to fill the gap? What is the targeted segment for iFast? What are the products it plans to introduce?

Most services and products in the financial industry require the support or participation of banks. By becoming a digital bank, iFAST will have access to this “foundation layer” of the financial ecosystem, and be able to deploy our “Fin” (financial) and “Tech” capabilities to the fullest. This will enable us to create innovative banking products and solutions for consumers in Malaysia and globally.

Although Malaysia has an unbanked population of only 8 percent, we believe financial inclusion is far beyond having a bank account for all Malaysians. There are still many Malaysians still underserved by the incumbent banks.

As such, our main target segment is the Bottom 40 percent (B40) of Malaysia’s population, who is clearly the most unserved and underserved.

With the synergistic capabilities within our consortium, we aim to offer solutions that will provide immediate benefits to the B40 segment, such as free life insurance, interest-free loans for daily necessities, and micro-investments and insurance.

Outside of Malaysia, we are also targeting global depositors who have limited access to the right deposit and wealth management solutions in their own countries. This target segment would provide the digital bank with low-cost deposits that can be channeled into low-cost loans for the local underserved and unserved segment.

What are the competitive advantages iFAST’s consortium has against other contenders? What are the chances for iFast as it may not be a household name for Malaysians as compared to other applicants which operate e-wallets? How does iFast’s existing business complement its digital banking business?

Firstly, as a wealth management platform, iFAST not only has the ability to attract low-cost deposits but also has a ready source of deposits. This is crucial, since low-cost deposits can be translated to low-cost loans that will benefit borrowers, and yet earn us a decent margin. It also means that we do not need to take excessive risks when issuing loans.

Secondly, with the consortium’s combined ecosystem of customers, wealth management intermediaries, and product partners, we already have a ready source of customers and distribution channels to tap on immediately. Koperasi Angkatan Tentera Malaysia and 99 Speedmart are also familiar names to all Malaysians and will allow us to reach out to our targeted segment with even more ease.

The third advantage is technology. As a FinTech company that has built almost all its systems internally, iFAST has a strong advantage in terms of speed-to-market and costs, which are much lower than outsourcing.

For the digital bank, iFAST will also be able to leverage on the expertise and resources from our consortium partners (especially Yillion, an existing digital bank in China).

The success of our digital bank will not rely solely on iFast’s capabilities, but instead on the overall synergistic capabilities within our consortium.

How long will iFast expect its digital bank to be profitable if the consortium were granted a digital bank license? Any timeline for that?

With the factors mentioned above, we believe that our business model is a profitable and sustainable one. Our consortium members also have a strong track record of running profitable businesses over the years, and this will be reflected in the digital bank. We anticipate turning profitable by the time we exit the foundation phase.

Featured image credits: iFast

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