FPAM Perak Chapter CE Workshop | Digital Banks in Malaysia: A Threat to Traditional Banks by James Chin

In April 2022, Bank Negara Malaysia (BNM) announced the five successful applicants for the digital bank licenses. BNM has specifically used the terms “unserved” and “underserved” to describe the digital bank’s market segment. Are these newly licensed digital banks a threat to existing traditional banks?

According to a Boston Consulting Group June 2021 report, there are 249 digital banking players globally, but of those, only 13 have been successful in generating a positive bottom line. And out of the 13 successful players, ten are based in the Asia Pacific region. As such, while many digital banks globally have gained market share with the growing liberalization by regulators, not many are profitable.

While the buzz is ongoing for the 5 successful digital bank applicants in Malaysia, traditional banks continue their digital path to remain competitive and relevant. This course will touch on the “unserved” and “underserved” segment as described by BNM; the strategic path to success that can be adopted and the challenges faced by these 5 new players.

Learning Outcome