Hot on the heels of the formation of an Islamic fintech-driven digital banking consortium in Malaysia, the country’s oldest fully-fledged Shariah bank revealed that it is laying the foundation for a completely digital bank.
Bank Islam has confirmed that it has formed partnerships with infrastructure providers to assist it in building the virtual bank. The partners are: Mambu, a software-as-a-service (SaaS) cloud banking platform; information services firm Experian; and fintech company Pod.
This ambition for a digital bank is being executed through the bank’s newly minted division, Centre of Digital Experience (CDX), tasked with building an online bank on a flexible platform capable of enabling fintech companies, digital marketplaces and other strategic partners to plug in directly.
These new alliances will allow the bank to expand its capabilities and services, particularly the engineering of new digital Islamic banking products through Mambu, enabling digital onboarding through the e-KYC (know-your-customer) solution to be provided by Experian. It is also worth noting that the bank is developing an alternative credit scoring mechanism with the help of Pod which would help Bank Islam tap into new segments, especially those traditionally sidelined by the banking sector such as gig workers.
“The underserved segments including gig workers are struggling to save money, have access to financing and consume financial products; even more so after the pandemic. Pod exists because we believe the job market as we know it is changing and soon, [the] majority of the workforce will fall under the informal sector. Thus, it is important that we lay the basic building blocks to deep dive into their financial needs in order to service these segments,” shared Nadia Ismadi, the co-founder and CEO of Pod.
Bank Islam’s aggressive digital measures are unsurprising. In recent years, the Shariah bank has revved up its digital engine to drive transformation as it prepares for public listing with digital innovation as the cornerstone of its next phase of growth.
“The bank is confident that we can provide greater accessibility to the market by capitalizing on digital technologies. At the same time, this effort will further spur the digital transformation of the financial sector, especially in the Islamic banking industry,” commented Bank Islam CEO Mohd Muazzam Mohammed, adding: “With Bank Islam’s expertise in risk management and Shariah-related matters, coupled with Pod’s technology and Mambu’s agile SaaS banking platform, the partnership is able to introduce and promote Islamic financial solutions to the targeted segment. We also believe that this partnership will serve as a precedent to encourage more fintech collaborations with financial institutions, and ultimately contribute to the growth of our digital economy.”
The CDX solution is expected to be rolled out in the second quarter of 2021.