Boost’s foray into digital banking on track

The central bank is expected to issue five digital banking licences to qualified applicants in the first quarter of this year after having attracted 29 applications last year.

KUALA LUMPUR: Axiata Digital Bhd’s financial technology (fintech) arm Boost Holdings Sdn Bhd is confident of securing one of the digital banking licences from Bank Negara.

The central bank is expected to issue five digital banking licences to qualified applicants in the first quarter of this year after having attracted 29 applications last year.

It is worth noting that these digital banks would be companies that ride on technology to offer products to the unserved and underserved market segments.

Boost Holdings chief executive officer Sheyantha Abeykoon said the company has built its capabilities over the past four years and would be able to meet the requirements of a digital banking licence, particularly given the extensive experience of its digital micro-financing and micro-insurance provider Boost Credit.

“Given that we have already invested in the building blocks and have a consortium that has the same vision as us, we are very confident about the strength of our application to Bank Negara.

“We already know what was required from the technology perspective to make this model work,” he said during a virtual media briefing yesterday.

Boost’s fintech business is operated via five different entities – Boost Life, Boost Biz, Boost Credit, Boost Connect and Boost Indonesia – making it one of the few fintech companies to operate a payment, lending, merchant solutions and cross border remittance platform at scale in Malaysia.

In June last year, Boost and RHB Banking Group inked a heads of agreement to form a consortium to apply for a digital banking licence from Bank Negara.

Boost would own a majority stake of 60% in the digital bank joint venture (JV), while RHB would hold the remaining 40%, with a minimum issued share capital of RM100mil.

Both parties will seek to increase financial inclusion and expedite the development of digital products and services to the underserved and unserved segment including micro entrepreneurs, small and medium enterprises and those in the gig economy.To fuel its digital bank aspirations, Boost also inked a memorandum of understanding with Credit Guarantee Corp Malaysia Bhd for a potential digital bank guarantee.

With Boost posting a gross transactional value of US$1.2bil (RM5bil) last year, Abeykoon aims for the company to grow at a similar growth trajectory or at a faster pace this year supported by its regional expansion plans. Moving forward, the company is eyeing expansion into two markets within the next 12 months to 24 months with the similar business model it has been using in South-East Asia.

It also intends to build deeper presence in Indonesia as it is the fastest growing market with regards to its lending and business-to-business solutions.

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