KUALA LUMPUR: RHB Bank Bhd plans to introduce its digital banking platform as early as the second half of next year, according to its top executive, as the coutnry’s fifth biggest lender looks to hold back a tide of financial technology (fintech) startups.
The bank and its partner Boost, an arm of communications giant Axiata Group Bhd
, could invest as much as RM1bil in the venture, said RHB chief executive officer Mohd Rashid Mohamad in an interview.
Boost and RHB were among five groups that won digital bank licences from Bank Negara in April. The others chosen include ventures led by Singaporean tech firms Grab Holdings Ltd and Sea Ltd.
“We plan to launch the digital bank in the second half of next year or latest by the first quarter of 2024,” said Rashid, who assumed his current role in April. The other four licence holders haven’t given a timeline on their rollout.Established firms like RHB are facing pressure from fintech upstarts that move quickly to embrace new technology and are often more willing to burn through piles of cash to peel away their clients.
Asked why the digital bank will have such a long gestation period, Rashid said: “We are building the digital bank from scratch. We need to put up a new core banking system and infrastructure product proposition that are in line with Bank Negara’s requirements.”
For Bank Negara, the licences are an opportunity to encourage lenders to help people outside the traditional banking system to have access to credit and more chances to build wealth.
Through the digital bank, RHB hopes to expand its business to include the “unserved and underserved community” by providing financing as well as a host of banking services. “We will be using more of artifical intelligence and technologies to assess their credit based on the data points and models that we have put in place.”
RHB is also looking to spread its digitisation push beyond Malaysia to the rest of South-East Asia, home to more than 650 million people. The lender aims to launch a mobile app offering full banking services in Cambodia later this year, pending regulatory approval, as it seeks to position itself among the top 10 banks in the country, Rashid said.
The international business contributed 9% to pre-tax profit in the first half of this year versus 3% in 2021, Rashid said, adding that RHB aims to have the segment accounting for 15% of pre-tax earnings by 2024.
For Cambodia, Singapore and Indonesia –its three key markets – the group expects to have 1,379 employees by the end of this year, up from 1,230 as of the end of 2021, he said.
In Singapore, RHB plans to expand its corporate and wealth management business while in Indonesia, it will focus on capital market activities and to be in the top 10 stockbroking firms there by 2024, according to Rashid.The lender also has a presence in Thailand, Brunei, Vietnam and Laos. — Bloomberg
