In 2022, Bank Negara Malaysia (BNM) announced that five successful applicants had received a digital bank licence – GXBank, AEON Bank, Boost Bank, a consortium led by KAF Investment Bank and a consortium led by Sea Limited and YTL Digital Capital.
This marked the nation’s foray in digital banking services as more people increasingly rely on cashless transactions. As of now, three of the banks – GXBank, AEON Bank and Boost Bank – have been launched and are accessible to the public.
Digital banks offer products such as savings accounts and loans wholly or almost wholly through digital means to customers. Individuals can conveniently open an account online from anywhere without having to head down to a local branch. This eliminates the geographical barriers that prevent people from accessing financial services, especially those in rural areas. With the adoption of digital technology in everyday transactions, more people are expected to be able to enjoy banking services.
The operating digital banks are also members of the Malaysia Deposit Insurance Corporation, which means that your deposits are secured up to RM250,000.
How Digital Banks Are Licensed In Malaysia?
The licensing of digital banks in Malaysia is based on BNM’s framework. BNM looked at several criteria when considering the applications for a digital bank licence, which include character and integrity of applicants, nature and sufficiency of financial resources, soundness and feasibility of business and technology plans and ability to meaningfully address financial inclusion gaps
Upon the grant of license by the Ministry of Finance (MoF), the successful applicants will need to undergo an operational readiness review prior to operations.
Once it receives approval for commencement of operations, the digital bank can operate with asset limit for a period of 3 to 5 years. During these foundational years, the bank will need to maintain at all times a minimum amount of capital funds of RM100 million unimpaired by losses. It must also ensure that its total size of assets do not exceed RM3 billion at any time during the foundational phase.
Digital Banks vs Islamic Digital Banks
Out of the five licensed digital banks, three are licensed under the Financial Services Act 2013 (FSA) – Boost Bank, GXBank and a consortium led by Sea Limited and YTL Digital Capital.
The other two digital banks, namely AEON Bank and a consortium led by KAF Investment Bank are licensed under the Islamic Financial Services Act 2013 (IFSA).
Islamic digital banks are required to comply with all the same regulations that apply to an existing licensed Islamic bank except on the following:
- Shariah Committee must comprise at least three members
- Shariah Committee must convene at least two times a year
If you didn’t know, Shariah-compliant banks adhere to Islamic principles such as prohibition from investments in forbidden industries including gambling and sale of alcohol.
Read Also: Guide To Investing In Sukuk, A Shariah-Compliant Bond In Malaysia
GXBank
GXBank led by Grab is the first digital bank to begin operations in Malaysia in November 2023. Customers can download the GXBank app and open an account within minutes.
GXBank’s online savings account is open to all Malaysians over the age of 18, who have a locally-registered mobile number and a bank account with another bank in Malaysia. Upon successful account opening, you need to make a transfer from your bank to your GXBank’s account for activation.
With GXBank, you don’t have to keep a minimum account balance and there is no charge for account closure, statements, intrabank and Duitnow transfers. GX Bank’s savings account also offers a daily interest of 2% p.a.
You will also receive a debit card that offers unlimited 1% cashback and zero-fee ATM cash withdrawals.
Other features on the GXBank app include Savings Pockets that allow you to create multiple pockets for savings and schedule money transfers at the frequency of your choice.
AEON Bank
Launched in May 2024, Islamic digital bank AEON Bank is led by a consortium of AEON Financial Service, AEON Credit Service and MoneyLion.
Customers aged 18 and above can open an AEON Bank Savings Account-i via its app with their Malaysian Identity Card and an existing non-joint personal savings or current account (any bank) to make the initial deposit, as required by Bank Negara Malaysia’s e-KYC regulations.
You need to maintain a minimum available balance of RM20 in your Savings Account-i. If you close the account within 3 months of the account activation, a closure fee of RM20 will be charged. There will also be an annual service charge of RM10 for dormant accounts.
AEON Bank’s Savings Account-i offers depositors a profit rate of 0.88% p.a. To earn more interest, you can create Savings Pots to help you save towards your goals while enjoying a profit rate of up to 3.00% p.a.
The savings account also comes with a debit card that has a self lock and unlock security feature. For those who are regular patrons of AEON Malls, opening an AEON Bank savings account allows you to get points and earn more from AEON Departmental Stores, AEON BiG Hypermarkets, AEON MaxValu Prime and AEON Wellness. You can then redeem these points to be used as cash.
Boost Bank
Boost Bank is led by a consortium of Axiata-backed Boost e-Wallet and locally-based RHB Bank. Boost Bank officially launched its app in June 2024 with an embedded account opening journey through its existing Boost e-Wallet app.
All existing Premium Wallet users on the Boost e-Wallet app will be able to easily open a Boost Bank account in a seamless onboarding process.
Unlike the previous two banks, Boost Bank allows for those who do not have an existing bank account to open a savings account with Boost Bank. However, do note that without making a bank transfer from an existing bank account and activating your Boost Bank account, you will be using an ‘Active Limited’ account with a maximum limit of RM10,000.
Malaysian citizens aged 18 and above can open a Boost Bank account with only RM1. There are no charges for account closure (user-initiated), eStatements and DuitNow transfers. However, there is a dormant account charge of RM10 a year.
With Boost Bank, you can enjoy up to 2.5% p.a. daily interest on your savings. Aside from that, you can create Savings Jars to save towards your own personal goals and enjoy 3.0% p.a. daily interest on all your Savings Jars.
If that’s not enough, Boost Bank also offers up to 3.3% p.a interest when you transact with eligible partners.
Boost Bank’s savings account comes with a debit card that has zero annual fee. If you’re already using the Boost app, you can link your account to Boost app and earn points and enjoy vouchers and discounts.
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