BNM: Virtual banking is happening now

27 Aug 2019 / 20:17 H.

KUALA LUMPUR: Virtual banking is already happening in Malaysia, although the digital bank licensing framework will be issued for industry consultation by year-end, Bank Negara Malaysia governor (BNM) Datuk Nor Shamsiah Mohd Yunus said.

There won’t be a number (for licences issued), she said.

“But when you talk about a digital bank, it is about not having a physical presence (at all). Not the brick and mortar type. All banking services and transactions will be delivered through the internet or other forms of electronic channels, instead of physical branches.

“That is the difference. The framework, which is now being finalised, will be on BNM’s regulatory requirements for interested parties to be given a licence.

“Banks in Malaysia can also participate. These banks in a way are already participating in virtual banking through its offerings of mobile banking and e-wallets,“ she told Bernama in an exclusive interview.

To date, more than 10 parties have expressed an interest in setting up virtual banks in Malaysia.

In 2018, financial transactions conducted via the mobile banking channel more than doubled to 257.4 million transactions valued at RM100.1 billion (2017: 107.7 million, RM50.7 billion).

This was supported by a continued increase in subscribers for mobile banking services to 6.6 million in 2018 versus 4.4 million previously.

According to BNM’s annual report, non-banks are also making headway in this segment. Payment space has always been a common starting point for non-banks to embark on financial services, some with aspirations to evolve into digital banks.

Of the 49 non-bank e-money issuers in Malaysia, three in four offer mobile payment solutions. Non-banks have played a key role in driving this trend, accounting for 88.4% of these transactions.

According to reports, Boost, GrabPay and Touch ‘n Go(TnG) are among the dominant e-wallets in Malaysia. Others are Lazada Wallet, Samsung Pay and PayPal.

TnG, which is 52% owned by CIMB Group Holdings Bhd has about 18 million active users in Malaysia, while Boost claims it has 4.4 million users in Malaysia and 90,000 merchant touchpoints. – Bernama

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