GXBank launches as Malaysia’s first digital bank, offers debit card
Daphne Yow
GXBANK has launched its digital banking app nationwide in Malaysia.
The bank – which counts Singapore’s GXS Bank as a shareholder – had commenced beta operations in Malaysia on Sep 1, and is now open to the public, offering both a savings account and a debit card.
Bank Negara Malaysia (BNM) had awarded five digital bank licences in April last year to:
- A consortium of Boost Holdings (a unit of Malaysian telco Axiata) and RHB Bank;
- A consortium led by GXS Bank (a joint venture between Singtel and on-demand platform Grab) and the Malaysian family group Kuok Brothers;
- A consortium led by e-commerce operator Sea and YTL Digital Capital (a unit of the Malaysian conglomerate YTL Corp);
- A consortium of Aeon Financial Service, Aeon Credit Service (M) and fintech MoneyLion; and
- A consortium led by KAF Investment Bank.
GXBank is the first of those to be awarded a licence to commence commercial operations.
Although GXBank will not have physical branches, it is excited to launch a physical card, said its chief executive Lai Pei Si.
GXBank and its peers face a tough battle ahead for customers.
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A BNM paper estimated that, by 2020, only 5 per cent of Malaysia’s population would still be unbanked.
And Fitch Ratings said in May that digital banks are “not likely to become major competitors to traditional banks within the next five years”. This is partly due to regulatory limitations on the activities of digital banks, and partly to the “formidable” market share of the incumbent banks.
Fitch said: “BNM’s licensing framework caps the digital banks’ assets at RM3 billion (S$858.2 million) during the foundational phase, from which they cannot exit until at least mid-2026, and potentially as late as mid-2029.
“This means aggregate digital bank balance sheets will be less than 1 per cent of the system in the medium term, under even the most bullish assumptions.”
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