Maybank IB said digital banks are still loss-making and it would generally take about five-to-six years for them to break even.
PETALING JAYA: Three out of the five digital banks, which have been in operation for over one year, have been successful in drawing deposits through promotional returns on savings accounts.
But preserving the deposit base is going to be a challenge, said Maybank Investment Bank (Maybank IB) Research.
It noted that the outstanding deposits of the digital banks had declined 5% to 17% between December 2024 and June 2025.
In August, KAF Digital Bank and Ryt Bank were launched.
“Malaysia’s digital banks, in our view, are still at an infancy stage, with much room and opportunity for growth – they currently account for less than 0.1% of banking system loans/deposits.
“At the same time, the conventional banks are not resting on their laurels and have stepped up their information technology and digital investments,” Maybank IB said in a progress report.
The research house said digital banks are still loss-making and it would generally take about five-to-six years for them to break even.
“The focus has primarily been on deposit gathering, and all banks have debit cards in issue.
“Financing has been limited to personal and small medium enterprise (SME) financing, though Boost Bank now offers motorbike loans.”
According to the research house, Boost Bank and GX Bank offer SME loans in the form of term loans or revolving credits.
Other future products, it said could include multi-currency remittance services; digital banking tools for SMEs; SME credit facilities and funding platforms; wealth advisory and investments, as well as insurance plans.
