KUALA LUMPUR: Pertama Digital Bhd is looking to partner with a syariah-compliant bank to set up the first enterprise and government-focused neobank in Malaysia, said its director of strategy Saify Akhtar.
“Pertama Digital is striving to be a syariah-compliant counter. As such, any of the bank that we partner with will have to be Islamic bank,” he told reporters after its AGM today.
A neobank is usually not associated with any traditional banks and does not have any physical branches. Neobanking transactions are done entirely online.
Saify pointed out that Pertama Digital is not the first neobank in Malaysia because there are a few established retail neobanks in operation but it will be the first enterprise and government-focused neobank in the country.
Additionally, he said that with this future neobank, it will be providing the government digitalisation services as part of its banking products.
Instead of partnering any of the five institutions that were granted digital banking licences by Bank Negara Malaysia (BNM), he said the company is looking at traditional or incumbent banks.
Recall that Pertama Digital was not awarded the digital banking licence by BNM. Saify said it will not reapply for the licence because, from their perspective, BNM will only reopen a new round of application once the five that were approved have gone through a few years of successful operations.
“On that basis, it takes too long for a growth business like Pertama to wait for that. Instead, we are going ahead with the neobanking model straight away,” he said.
He added that for a digital bank to be successful, it needs a combination of a technology company and a bank.
“When we are doing the neobank strategy, Pertama is the technology company and we just (need to) find a bank partner that takes charge of the license, the infrastructure, and all the other obligations that banks have to look after in order to qualify as a licence bank under BNM.
“What we do is, we’ll partner with a bank which covers all that, which is any of the licensed bank in Malaysia and we are the technology company that helps them to go digital,” Saify explained.
He said the neobanking venture is important because the five approved digital banking license holders are expected to be a massive threat to all existing banks. Hence, he foresees that other banks will scramble to find a company like Pertama Digital to partner with hand to hand to create a neobank.
Meanwhile, he said the company’s future banking partner, which it will announce in the third quarter this year, will be the majority owner in the neobanking partnership. Once it makes the announcement, it would take 12 to 18 months for the neobank to start serving customers.
