All five digital banks have collectively served 2.4 million customers, with total deposits of MYR 4.2 billion ($1.04 billion) in Malaysia by end of 2025, its central bank’s annual report showed Tuesday.

Bank Negara Malaysia (BNM) said about 65 percent of customers are from unserved and underserved segments, including low-income households, gig workers and youth.

According to the bank, some digital banks also began offering small-value financing.

Of the MYR 1 billion ($250 million) financing approved, 34 percent are for unserved and underserved customers.

“While modest at this early stage, this performance reflects meaningful progress in addressing unmet financial needs,” said BNM.

It is noted to strengthen accountability and ensure inclusion is always at the center of digital banking, BNM introduced the Digital Bank Inclusion Monitoring and Evaluation (DIME) Framework.

The framework outlines expectations for digital banks to embed financial inclusion into their strategies, governance arrangements, and product design.

“Pilot assessments in 2025 indicated strong alignment with these expectations,” said the bank.

According to the central bank, digital banks have clear inclusion strategies, structured governance to track outcomes, and products tailored to underserved segments.

“They also use data analytics to serve thin-file customers,14 offer flexible repayment options, and provide near instant approvals, helping individuals and small and medium sized enterprises (SMEs) manage cash flow more effectively,” it said.

BNM also expects digital banks to deepen this commitment by linking services to everyday digital platforms, including telecommunications, utilities and public services.

It noted this would improve accessibility and reach.

Meanwhile, BNM sees digital assets and emerging technology like Distributed Ledger Technology (DLT), have drawn strong public interest.

“They have the potential to transform how money is stored, transferred and used across the financial system domestically and across borders,” said the bank.

To enable safe testing of credible use cases, the bank has created the Digital Asset Innovation Hub (DAIH) as a platform for industry players to test digital asset solutions.

As of first quarter of 2026, several major institutions have been onboarded to develop use cases for tokenized money under the umbrella of DAIH.

The strong industry momentum signals the growing need for regulations to also adapt in this space.

In addition, the bank also issued a discussion paper on asset tokenization, outlining high level principles and priority use cases to guide industry focus areas.

This is supported by a dedicated industry working group (IWG) for structured dialogue.

BNM also said it recognizes that building a sustainable digital asset ecosystem requires strong partnership between public and private sectors.

To achieve this, it also worked closely with the Securities Commission Malaysia and other agencies to align policies, including through the Digital Assets and Artificial Intelligence
Advisory Council chaired by the Prime Minister.

In addition, BNM brought together financial institutions and digital asset players for structured dialogue, to ensure mutual understanding on risk management practices and build trust.

“These steps will help Malaysia build a digital economy that is safe, vibrant and supports responsible innovation while maintaining monetary and financial stability,” said the bank.

In 2026, BNM said will continue to pursue efforts that ensure payment and money services are secure and reliable for consumers and businesses.

“Efforts to expand digital payment adoption across all segments of society will be intensified,” it highlighted.

At the same time, it noted strengthening oversight and fraud prevention to protect users will remain a priority.

This includes closer cross-sector collaboration and enhanced cross-border safeguards to counter increasingly sophisticated scams.

It noted these measures will ensure users can transact securely and support confidence in Malaysia’s digital economy.

In line with growing global interest towards a tokenized economy, BNM said it will continue to advance work on asset tokenization and digital money including Central Bank Digital Currency (CBDC), tokenized deposits and Ringgit stablecoins.

This work will be undertaken with the intention to establish a clear regulatory framework.

This approach also provides industry certainty while safeguarding financial stability and consumer protection.

“Together, these efforts will position Malaysia as a trusted and forward looking nation for responsible digital finance innovation,

“Ultimately, this will translate into real economic gains and support Malaysia’s broader economic transformation,” it added.

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