Grab may have advantage over other players in Malaysia digital bank space: Maybank

GRAB likely has an advantage over its other digital bank competitors in Malaysia given its e-wallet share in the country, Maybank said on Sunday (May 1).

The superapp operator has the largest e-wallet market share in Malaysia, allowing it to gain from having more data to better understand customer needs and risk management, and having a bigger gateway for more financial services adoption.

But the research team said it still remains positive on both Grab and Sea Limited, as the 2 companies offer a proxy to ride the digitisation of the Asean economy and rising consumer affluence.

Grab, together with its consortium partners Singtel and Kuok Brothers, won 1 of 5 digital bank licences in Malaysia in April. Another consortium led by Sea and YTL Digital Capital also won 1 of the licences.

The research team noted that both Grab and Sea – the parent company of e-commerce platform Shopee – have strong e-wallet propositions, which should provide a gateway for the adoption of new digital financial services and reduce the cost of acquiring or upselling customers.

Maybank also said Grab and Sea have likely fulfilled all 3 criteria of commanding a strong share of time, mind and trust in the key verticals they work in, to become winners in the digital financial space.

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The research team expects immediate contributions from the digital banking sector will be small, as time will be needed to identify and roll out digital banking products and build user adoption. Near-term growth may also be hit by constraints, such as a RM3 billion (S$953,440) cap on total assets, under the licensing regime.

However, growth should become more meaningful when restrictions lift after 3 to 5 years.

Both Grab and Sea are currently hiring for financial product roles such as in retail finance, insurance, mutual funds, loans and deposits. Maybank said this provides a glimpse of the type of products that they aim to roll out in countries where they have a digital banking presence.

As for its target audience, the research team expects the players will likely see the strongest growth opportunity with the underbanked, noting that around 55 per cent of Malaysians are unbanked or underbanked, representing a market size of 11 million people.