Global insurance brokerage giant Boustead Holdings has teamed up with the MyAngkasa Digital Services (MDS), the digital arm of the National Co-operative Movement of Malaysia (ANGKASA), to bid for an Islamic digital banking license from Bank Negara Malaysia (BNM).
Both entities are part of a consortium which includes e-money provider MRuncit Commerce, cloud solution specialist Amazon’s AWS and core digital banking provider MAMBU. MDS in a statement said the consortium has received full backing from the Ministry of Entrepreneur Development and Cooperative and the Cooperative Commission of Malaysia.
Being part of ANGKASA, which processes some RM15 billion (US$3.61 billion)-worth of financing annually, has given the MDS Consortium a captive market of over seven million members and over 10,000 cooperatives. It is worthy to note that most if not all of ANGKASA member cooperatives subscribe to Islamic financial services.
Boustead Holdings on the other hand, is a public listed conglomerate majority-owned by Lembaga Tabung Amanah Tentera serving the Malaysian market since 1978 with Takaful, specialist insurance, reinsurance and employee benefit solutions.
If licensed, the consortium will deploy a ‘sachet banking’ approach comprising simple daily banking products customized to its target segment such as dual savings, bite size financing, and digital financial management tools.
“The pandemic has magnified the value and necessity of digital banking and we do not want to miss the wave. MDS will focus on financial inclusion to the underserved and unserved market segments, including the B40 (below 40% income segment) and MSMEs especially within the cooperative movement to boost sustainable economic growth across the board,” said Haji Abdul Fattah Haji Abdullah, the chairman of MDS and president of ANGKASA.
The application period for the BNM digital banking license closed on the 30th June 2021. The six-month application period generated 29 applications from banks, industry conglomerates, technology firms, e-commerce operators, fintech players, cooperatives and state governments. The central bank could issue up to five licenses, which will be revealed in the first quarter of 2022.
Click here for a breakdown of entities gunning for an Islamic digital banking license.