September 24, 2021Malasya
Digital banking is key to financial inclusion in Malaysia
Digital banking is expanding globally and the Asia Pacific has emerged as a hotspot for digital banks. Bank Negara Malaysia (BNM), Malaysia’s central bank, issued its Licensing Framework for Digital Banks last year to kickstart digital banking in Malaysia.
However, Malaysia is late compared to its neighbours to embark on digital banking but COVID-19 has accelerated its adoption of FinTech. BNM’s regulatory enhancement initiative to facilitate the development and adoption of FinTech solutions by introducing a regulatory sandbox framework in 2016 laid the groundwork for digital banking.
Malaysia’s push for digital banking will help provide cost-effective financial services to retail customers and the underserved business community. Digital banks are 90 per cent cheaper to operate than traditional banks because there are no physical branches and lower labour costs. This means they can more easily offer low-cost financial services to lower income groups.
