Axiata teams up with RHB Banking to bid for digital banking licence

By Leandra Monteiro

Axiata Group Bhd and RHB Banking Group have entered into an agreement to form a consortium to formalise their joint bid for a digital banking licence under the framework issued by Bank Negara Malaysia (BNM).

According to the companies, Boost Holdings, Axiata’s subsidiary that operates an e-wallet, will own 60%, while RHB, the country’s fourth-largest banking group, will own the rest of the digital bank, subject to approval from the central bank.

“We are pleased to expand our partnership with RHB in cementing our mutual commitment to support the government’s ambition to narrow, if not close the national digital divide,” said Izzaddin Idris, Axiata’s president and group chief executive officer, according to media reports.

“Through innovative, efficient and secure banking services, we are confident our strategic collaboration will meet the fast-evolving demands of segments of retail customers and micro small and medium businesses (SMEs) overlooked by traditional institutions.” He added.

The consortium is predicted to benefit from the FinTech experience through the microfinancing and microinsurance operations offered both by Boost’s Aspirasi and Boost e-wallet’s user base to accompany RHB’s digital offerings as well as its liquidity management and compliance expertise.

According to the company, Axiata currently serves more than 250,000 merchants and micro-businesses through its Boost e-Wallet and Aspirasi microfinancing businesses, whereas RHB offers more than 200,000 of its SMEs access to a connected ecosystem of SME banking and business solutions.

Outside of digital banking, it is said that the two parties are looking at exploring more opportunities to enhance their joint customer ecosystems.