KUALA LUMPUR: RHB Bank Bhd and Axiata Group Bhd will jointly apply to Bank Negara Malaysia for a digital banking licence under their proposed collaboration.
In a joint statement on Wednesday, Axiata subsidiary, Boost Holdings Sdn Bhd and RHB Bank will form a consortium to apply for the digital banking licence under Bank Negara’s framework.
“Both parties consider this partnership as a robust platform to drive innovation, increase competitiveness and accelerate the country’s digital transformation and financial inclusion ambition, ” they said.
Boost Holdings will own 60% and RHB the remaining 40% in the digital bank, subject to approval from Bank Negara.
Both parties had signed an MoU to jointly explore potential collaboration opportunities to bring better customer experience and a better range of joint solutions to both their customers.
“The rationale for the MoU is for RHB Bank and Axiata to explore potential strategic collaboration opportunities, ” according to a joint statement.
The collaboration is also to enhance their joint customer ecosystems offering bundled digital solutions to be mutually agreed and to jointly explore other potential opportunities deemed suitable.
They said the term of the MoU shall be for two years from its commencement date on Wednesday.
As at May 17, the Employees Provident Fund Board has a 41.26% stake in RHB Bank while as at May 21, the EPF has a 17.17% stake in Axiata.
On the digital bank, RHB sees this as an extension of its digital transformation programme which is a core component of its FIT22 strategy.
“With the right digital model and partner, RHB seeks to increase financial inclusion and expedite the development of digital journeys and products to wider segments of the community (e.g. MSMEs, Gig Economy).
“RHB will bring to the consortium many years of established trust with customers and regulators, as well as extensive experience in running a bank with proven expertise across core banking services, risk management and compliance, liquidity, capital, operational and credit management, product management, and responsible financing, ” it said.
As for Celcom Axiata Bhd, it has signed up as a major commercial partner on joint go-to-market activities with the digital bank on products and services which will benefit the customers of both parties. Other commercial partners are being finalised and will be announced in due course.
“The parties will seek to expand on Boost Holdings’ extensive fintech experience developed through Aspirasi, a digital micro-financing and micro-insurance provider and the Boost e-Wallet, a top three e-wallet and lifestyle app.
“Boost Holdings’ intimate knowledge of customers via analytics and artificial intelligence will provide better customer solutions, product personalisation and risk-based pricing, ” the statement said.
Group managing director/ group CEO of RHB Banking Group, Datuk Khairussaleh Ramli, said: “The MoU sets the foundation for both RHB and Axiata to explore further group-wide partnership opportunities in all countries where we mutually operate.
“We believe that broadening our collaboration will result in greater accomplishments particularly in enhancing customer experience as well as providing greater accessibility to banking services for a wide range of customers.”
“The joint bid for a digital bank licence demonstrates our commitment to building the best solutions for our customers in every segment and partner with parties that can bring value to the overall proposition, ” he said.
Khairussaleh added this includes the continued integration of the existing RHB and Axiata (Boost e-Wallet, Aspirasi, Celcom) customer ecosystems to provide a better range of joint solutions, better connectivity, and even more convenience to all our customers.
Commenting on the partnership, Axiata’s president & group CEO Datuk Izzaddin Idris (pic, above) said: “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.
“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-SMEs overlooked by traditional institutions.”
“For the past five years, Axiata has been doubling down on our efforts to strengthen the foundation of our financial inclusion objectives. Through Celcom and platforms such as Aspirasi and Boost e-Wallet, we have made great leaps in the provision of innovative and inclusive digital financial services.
“As we inject our deep fintech experience and data-driven insights to break new grounds in digital inclusion, complemented by RHB’s proven risk and compliance experience, the establishment of a digital bank is a natural next step in expanding and deepening our ongoing momentum to deliver Malaysia’s digital transformation objectives, ” Izzaddin said.
CEO of Boost Holdings Sdn Bhd Sheyantha Abeykoon said the partnership will create a market leader in providing financial inclusion services to the underserved.
“With Boost Holdings’ fintech expertise and RHB’s track record of compliance, our combined customers can be assured of accessible, convenient and trusted solutions for all of their financial needs. We look forward to offering our over nine million customers an unbeatable value proposition with a groundbreaking digital bank, ” he said.
Group chief strategy officer of RHB Banking Group, Dr Siew Chan Cheong, said the banking group’s firm belief was that success in the future is underpinned by the ability to expand ecosystem offerings with trusted partners to solve unmet needs and provide highly tailored solutions for customers in every segment.
“Ecosystem partnerships between RHB and Axiata will benefit our SME and retail customers across SEA. The digital bank partnership with Axiata is proof of our commitment to continuously innovate at RHB, with the goal of expediting the build of convenient and impactful solutions for the underserved.”