It came as a surprise when Southeast Asian used car platform Carsome confirmed that it is part of the KAF Investment Bank-led consortium which was among the five consortiums winning a digital banking license in Malaysia.

While Carsome stayed low-key about its participation in bidding for a digital banking license prior to the central bank’s announcement of winners, financing services have always been on its radar as the Malaysia-headquartered unicorn aims to enhance the used car ecosystem and car ownership experience for its customers.

“Providing financial inclusion through the digital bank complements Carsome’s current efforts to digitalize and strengthen the used car ecosystem and car ownership experience,” Carsome Chief of Staff Aaron Kee told TechNode Global in a recent interview. “Carsome leverages technology, data, and an extensive network to provide a great user experience for our customers across our business.”

Even before winning the digital banking license, Carsome has already collaborated with several banks, providing financial solutions to its member dealers and purchasers.

And now with the digital banking license, Carsome will be able to expand its offerings, according to Kee.

“Currently, we have Carsome Capital, functioned to offer loan financing, dealer financing among other financial services. Along with this digital banking license, it enables us to expand our offering and serve a wider group of customers,” he added.

“Through digital banking, we hope to further advance the business on all fronts and provide a greater value proposition in the auto-financing space to further elevate the car-buying experience Malaysians have with Carsome,” Kee said.

Bank Negara Malaysia announced in April the five successful applicants for the digital bank licenses. The country will have three digital banks licensed under the Financial Services Act 2013 (FSA) and two Islamic digital banks licensed under Islamic Financial Services Act 2014 (IFSA).

Malaysia’s move to issue digital bank licenses comes at a time when regulators across Asia including Singapore, Hong Kong, the Philippines, Thailand and Indonesia, are opening up the banking industry to digital players, encouraged by higher smartphone penetration and better internet connections.

Central Banks and consumers hope that digital banks could bring financial inclusion to underserved segments, helped by advanced technology. The demand for online banking services and digital payments has also increased significantly, thanks to the Covid-19 pandemic.

Carsome, together with FinTech firm Jirnexu and digital remittance platform MoneyMatch, forms part of the consortium led by KAF Investment Bank which will be licensed under the IFSA.


In the interview, Kee also shared the opportunities Carsome sees in building a digital bank in Malaysia and the competitive edge it has against others. He, however, declined to comment on the launching date of the digital bank.

Below is the edited excerpt:

How will the digital bank formed by KAF Investment Bank, Carsome position itself? What is the digital bank’s targeted segment?

The digital bank, led by KAF Investment Bank, will play a role in supporting the segment where financial access is not available, in driving greater financial inclusion, especially for the unserved and underserved markets in Malaysia. Through this, we aim to democratize financial access and make it accessible for all.

Carsome seeks to collectively work together with all parties under the KAF consortium in innovating and elevating the FinTech ecosystem in Malaysia. The target customer segments for the digital bank are those which are unserved and underserved segments that can be catered better through the effective use of technologies and “high value” segments that are served reasonably well but can be served better through innovative solutions.

What are the opportunities Carsome sees in the digital banking business?

Besides leveraging digital technologies such as cloud computing to provide seamless online banking services without the need for a physical branch, digital banking also capitalizes on human-centric and personalized touchpoints enabling hyper-localization to provide better services that are optimized for customers.
In this space, Carsome foresees greater financial access can be provided to Malaysians in their car ownership journey through innovative digital banking solutions. This will provide accessibility to those in the market looking to buy used cars, particularly the underserved and unserved segments who wish to attain a car, assisted with access to loan application through a seamless and easy-to-understand process.

How will the digital banking business complement or support Carsome’s existing business?

Carsome leverages technology, data, and an extensive network to provide a great user experience for our customers across our business. Providing financial inclusion through the digital bank complements Carsome’s current efforts to digitalize and strengthen the used car ecosystem and car ownership experience.
Currently, we have Carsome Capital, functions to offer loan financing, dealer financing among other financial services. Along with this digital banking license, it enables us to expand our offering and serve a wider group of customers.

Powered by data and technology, we have grown to become Southeast Asia’s largest integrated car e-commerce platform today. Through digital banking, we hope to further advance the business on all fronts and provide a greater value proposition in the auto-financing space to further elevate the car-buying experience Malaysians have with Carsome.

As Carsome previously showed its intention to provide financial services to its customers, how is the development and responses?

Carsome offers various financial services through Carsome Capital, from dealer and retail vehicle financing to know-your-customer (KYC) and down payment.

Carsome Capital complements the existing ecosystem we’ve created as it doesn’t limit to retail customers (Carsome Certified buyers) – it also ensures our network of dealers and partners have sufficient capital to accelerate their business with our financial solution.

Carsome in its mission to innovate the used car ecosystem wants to provide an end-to-end solution for the consumers. We are working with various banking partners to provide financing as an ancillary service that has not always been available especially for customers wanting to purchase pre-owned cars.

The response has been encouraging, we’re able to deliver a differentiated experience for our
customers. They are able to view, select, and on-the-spot test drive their desired cars – and thereon complete their purchase with financial partners available that can process loan applications and approvals all under one roof.

Since Carsome is in the car business, we assume car loans could be one of the possible services provided by the digital bank. Currently, there are many traditional banks providing car loans, how different the car loans provided by the digital bank? What is your competitive advantage? How will the KAF-led digital bank compete with other banks/digital banks?

There are many differences between traditional and digital banks, such as the range of services and rates. Convenience, accessibility (to credit), competitive costs, and rate of loan approval would be among the main advantages a digital bank can provide. Digital banks also enable us to utilize alternative data points for credit scoring.

This has, in turn, broadened the target segments who can benefit from almost-instant access credit without being bound by conventional restrictions.

With our unique value proposition as Southeast Asia’s largest integrated car e-commerce platform and data and tech capabilities, we will act as an acquisition partner to drive Islamic auto financing within the digital bank. Our end goal has always been promoting financial inclusivity from the perspective of vehicle ownership.

Will Carsome provide similar financial services in other country/market besides Malaysia?

Providing access to financial services is a major part of Carsome’s vision to create the most trusted vehicle ownership ecosystem powered by technology and data.
Expanding similar products and services to other markets is in our pipeline as we are committed to strengthening the used car ecosystem in the Southeast Asia region.

Consortiums partnering banks, e-wallets have an upper hand to bag Malaysia digital bank licenses