iFAST leads consortium applying for Malaysia digital bank licence

IFAST Corporation is leading a consortium to apply for a digital bank licence in Malaysia, it said on Wednesday.

The consortium is looking to secure one of up to five digital bank licences that Bank Negara Malaysia may issue to qualified applicants by the first quarter of 2022.

If the application is successful, iFAST Corp will own a 40 per cent stake in the digital bank. The beneficial equity ownership of the consortium will be approximately 57 per cent Malaysian, the wealth management fintech platform said.

Lim Chung Chun, chairman and chief executive officer of iFAST Corp, noted that Internet-based business models have "massively transformed" the world in the last 20 years, enabling businesses with such models to operate globally and grow significantly.

However, the fintech industry has lagged behind other industries such as e-commerce, video-streaming, music and media in coming up with "truly global" business models, Mr Lim said. In his opinion, this is because of financial sector regulations slowing down efforts of financial institutions to create global fintech businesses.

"There is now an opportunity for a Malaysia digital bank to make a substantial contribution to the global digital banking and fintech scene," said Mr Lim.

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iFAST Bank intends to focus on local opportunities in the unserved and underserved market segments such as the bottom 40 per cent of the population in Malaysia, which it feels has been left behind in the country's progress.

It intends to offer this segment solutions with "immediate benefits and results", such as free life insurance, interest-free loans for daily necessities, and micro investments and insurance.

iFAST Corp's Malaysian partners in the consortium are credit-co-operative Koperasi Angkatan Tentera Malaysia Berhad, private investment holding company THZ Alliance and the founder and major shareholder of grocery chain 99 Speed Mart, Lee Thiam Wah.

Yillion Fintech, which provides the core digital banking technology and capabilities for Yillion Bank, is the international partner in the consortium. Yillion Bank is one of four digital banks in China.

iFAST shares closed at S$8.15 on Wednesday, up 21 cents or 2.65 per cent.