Axiata and RHB Bank jointly bid for digital bank licence, Boost to own majority stake

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Axiata Group and RHB Banking Group have formed a consortium to apply for a digital banking licence under the framework issued by Bank Negara Malaysia (BNM). Boost Holdings will own a majority stake of 60% while RHB will own the remaining 40% in the digital bank, subject to approval from BNM. Celcom Axiata 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 fintech experience developed through Aspirasi, a digital micro-financing and micro-insurance provider and the Boost eWallet, an e-wallet and lifestyle app. According to Axiata, Boost Holdings knowledge of customers via analytics and artificial intelligence will provide better customer solutions, product personalisation and risk-based pricing.

Meanwhile, RHB sees the digital bank as an extension of its digital transformation programme which is a core component of its five-year FIT22 strategy. RHB seeks to increase financial inclusion and expedite the development of digital journeys and products to wider segments of the community, including micro and small and medium-sized enterprises as well as the gig economy.

Both Axiata and RHB will leverage the latter’s Agile@Scale experience in building successful digital offerings such as the RHB MyHome app, SME integrated eSolutions, Digital SME Financing App, and eKYC onboarding solution to spur similar innovation for digital bank customers.

Complementary to the digital bank, RHB and Axiata are also exploring more opportunities to enhance their joint customer ecosystems. In recognition of the strength of their respective SME ecosystems, one potential initiative involves providing combined solutions to SMEs.

Axiata currently serves more than 250,000 merchants and micro-businesses via 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.

According to Axiata, today’s partnership is the culmination of a strong relationship seeded since 2018 with RHB that has seen fruitful partnerships between RHB Islamic Bank and Boost e-Wallet. These included donations being facilitated via the SyuQR digital platform, a cashless payment facility for government clinics, and many others.

Axiata president and group CEO Izzaddin Idris said 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, Izzaddin said it has made great leaps in the provision of innovative and inclusive digital financial services.

He said that the establishment of a digital bank is “a natural next step” in expanding and deepening its ongoing momentum to deliver Malaysia’s digital transformation objectives.

“Capitalising on synergies and opportunities further unlocked by this partnership, I am confident these two trusted brands will achieve successful outcomes to benefit customers who are expecting greater conveniences, personalisation, improved experiences and better credit access, centred on the Internet to deliver banking services nationwide,” he added.

Khairussaleh Ramli, RHB Banking Group’s group MD and group CEO, said the partnership sets the foundation for both RHB and Axiata to explore further group-wide partnership opportunities in all countries where they mutually operate.

“The joint bid for a digital bank license 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.

He added that this is an extension of RHB’s Brand promise of “Together We Progress”, where it commits to being a trusted partner to its customers, provide solutions that help achieve their goals, nurture future generations, and deliver simple, fast and seamless experiences.

Photo courtesy: 123RF

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