This partnership between Boost and RHB to form a Digital Bank consortium was announced last June 2021, with Boost owning a majority stake of 60%, and RHB owning the remaining 40% in the Digital Bank to drive innovation, increase competitiveness, and fast-track the country’s digital transformation ambition.
To deliver on the key criteria established by BNM, both parties will combine their deep expertise in specific areas – Boost’s extensive fintech experience and RHB’s intimate knowledge in banking services and risk management, to build a comprehensive suite of affordable and accessible digital banking and financial solutions. The aim will be to create greater access for financial inclusion digitally amongst the underserved and unserved segments.
Dato’ Izzaddin Idris, Axiata’s president and group CEO, and is also the chairman of Boost, said that this is a significant milestone for Axiata’s fintech business and validation of the strong value proposition they bring to the table with their partner RHB Banking Group.
“Securing this license in our home ground delivers multi-pronged opportunities to address ongoing digitalisation shifts across our businesses. On one hand, we can now deliver financial inclusion to underserved and unserved segments such as the MSMEs community as they scale for growth to support the nation’s economic recovery. At the same time, we’re able to actively meet demand from our expanding digital-first consumer base seeking convenient, improved, and secure user experiences for banking and credit access. This development also reinforces Boost’s experience and capabilities to pursue regional opportunities in this high-growth segment,” added Idris.
Over the past few years, Boost has been laying the foundation and building the essential blocks for a digital bank, one of which is through a large lending business via Boost Credit. Through this, the fintech player has developed a large digitally engaged core customer base with deep data-driven insights to break new grounds to build strong value propositions that solve the pain points of the underserved. Partnering with RHB, Boost will be able to leverage the latter’s banking expertise, as it has been making significant investments in building technology platforms and hopes to be able to launch the service in the near term.
Both will also leverage RHB’s Agile@Scale model to achieve speed in delivery and productivity as well as in building successful digital offerings similar to what has already been achieved in existing innovative offerings such as the RHB MyHome app, RHB SME eSolutions, SME Online Financing, RHB Reflex, and eKYC onboarding solutions.
Moreover, Boost has signed an MOU with Credit Guarantee Corporation Malaysia (CGC) in June last year through its subsidiary, Boost Credit for a potential digital bank guarantee. The MoU encompasses two key parts – the first is a commitment to explore extending a Portfolio Guarantee for the future Digital Bank’s MSME focused loans, and the second involves collaboration with CGC in taking up referrals to provide financing for eligible MSMEs without collateral.
Sheyantha Abeykoon, Boost’s group CEO, noted that the Digital Bank will be a catalyst for greater financial inclusion and aligns with the fintech’s core mission to financially empower and support users and merchants.
“The award of the digital banking licence now fulfils our vision of becoming a full spectrum fintech player in the region to better serve the underserved and as one of the pioneers in the industry, we look forward to this very exciting journey in creating an inclusive digital and financial ecosystem for all Malaysians together with RHB via the digital bank,” said Abeykoon.
Meanwhile, Mohd Rashid Mohamad, RHB’s group managing director and group CEO, commented that they are privileged to be part of this exciting chapter for the financial services industry in Malaysia, as the Digital Banking license granted to RHB and Axiata is an important step in reinforcing their commitment to continuously enhance their value propositions and better serve their stakeholders, particularly in providing quality financial services to a wider range of customers, in this case – underserved businesses and individuals in Malaysia.
“Our joint customers will gain access to credit that is digital, nimble, and secure. Which ties in well with RHB’s brand commitment to delivering simple, fast and seamless experiences. We look forward to playing our part in charting the industry’s evolution into this exciting era of digital banking and making progress happen for everyone,” said Mohamad.