Bank Negara Malaysia (BNM) targets to announce the winners of its digital banking licenses next month, according to the central bank’s governor Nor Shamsiah Mohd Yunus.

“We are in the ‘advanced stage’ of assessing the applications for digital banks and we target to announce the digital banks with the publication of our annual report at the end of March,” she said during the central bank’s fourth quarter of 2021 gross domestic product (4Q21 GDP) briefing on Friday, reported.

She said that the central bank needs to thoroughly evaluate each and every single application. Bank Negara intends to issue up to five licenses.

Bank Negara announced in July it has received 29 applications for digital banking licenses.

A diverse range of parties has submitted applications for the digital bank license, ranging from banks, industry conglomerates, technology firms, e-commerce operators, FinTech players, cooperatives, and state governments. Notable applicants that have officially announced their applications include Grab-Singtel venture, Axiata-RHB consortium, Paramount-Star Media Group, iFAST Corporation Ltd, AirAsia’s BigPay-MIDF-Ikhlas Capital consortium, and AEON Credit Service (M) Bhd, among others.

“We also expect the entry of these digital banks to accelerate the digitalization of our incumbent banks. This will be good not just for the industry, but also for all of us here as customers of the incumbent banks,” Nor Shamsiah was quoted as saying.

She said Bank Negara also wants the digital banks to offer relevant products and services to the “unserved and underserved” segments, so that more people and entrepreneurs can better own assets and save for the future or to grow their businesses, according to the report.

Malaysia’s move to issue digital banking licenses 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. Demand for online banking services has also accelerated by the ongoing COVID-19 pandemic.

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