Prime Minister Datuk Seri Anwar Ibrahim and Minister of Digital Gobind Singh Deo officiate the launch of Boost Bank’s pioneering embedded digital bank app. Present at the event were RHB Banking Group group MD/CEO Mohd Rashid Mohamad (extreme right), Fozia (second from right) and Sheyantha (left).
KUALA LUMPUR: More than two years after Bank Negara awarded five digital bank licences, Boost Bank has become the third digital bank to launch its operations and is confident of being profitable in the next three to five years.
“It is in our business plan to do it (be profitable) within that time frame,” Sheyantha Abeykoon, group chief executive officer of Boost, said.
For a start, the homegrown Boost Bank is targeting to convert a sizeable chunk of its current e-wallet ecosystem into banking clients.
“We are looking at converting more than half our base (to Boost Bank). That would be our ambition” Abeykoon told a media conference after its digital bank app’s launch yesterday.
The digital bank is a 60:40 joint venture between Boost Holdings Sdn Bhd and RHB Bank Bhd. Axiata’s unit Axiata Digital Services Sdn Bhd has a 78% stake in Boost Holdings, while Great Eastern Digital Pvt Ltd owns the remaining 22%.
GXBank, backed by Singapore-headquartered Grab Holdings Inc and the Kuok group, was the first to launch its digital bank on Nov 30 last year, followed by Japanese retail giant’s AEON Bank last month.
According to Boost Bank chairman David Lau Nai Pek, Boost wallet already has close to 11 million subscribers, of which close to two million are active users.
“Our objective is to convert as many as we can. Converting 50% of them is easy. Right now, they have money in the Boost wallet, which is not earning any interest,” he explained.
Lau added that conversion would also come from its partners, especially CelcomDigi which has 24 million subscribers and will be able to achieve the targeted number within the next few months.
As for the targeted segment, Boost Bank chief executive officer Fozia Amanulla said, “If you look at the design of our strategy, it is very much looking at our own ecosystem.
“We have a sizeable number of individual and small and medium enterprises (SMEs) customers. These will be our immediate targets.”
She added that Boost Bank is one of the few banks in Malaysia that will enable users who do not have an existing bank account to be digitally onboarded.
This was in line with its founding mission of reaching out to the underserved and unserved sectors of society.
The unique partnership between Boost and RHB, positioned Boost Bank as the first digital bank in the market to merge the technology-first mindset of a financial technology with the trust and stability of a large financial institution.
In addition to Boost Bank’s captive ecosystem, Fozia said it will also be leveraging marquee partners that it has grown with over the years, to take its propositions to the market.
These partners include CelcomDigi, Mydin, Bataras Sdn Bhd, CKS Retail Sdn Bhd, Farley (KCH) Sdn Bhd, Servay Hypermarket (Sabah) Sdn Bhd and Boulevard Hypermarket and Departmental Store Sdn Bhd.
“In addition to just serving those segments, I think the idea is also for us to provide financial literacy and educate these customers,” she said.
Meanwhile, Axiata Group Bhd
group chief executive officer and managing director Vivek Sood said Axiata has a target of digital inclusion of 23 million people.
“A large part of this will come from Malaysia. Digital inclusion covers both financial services, health and education. Boost will become a very strong platform for us to be able to do that,” he added.
Prime Minister Datuk Seri Anwar Ibrahim, who officiated the launch of the app, had called on Boost Bank to make serious efforts to ensure that people can assimilate digital literacy and take advantage of the latest technological developments, including artificial intelligence.
“I hope the components in Boost Bank, Axiata and RHB as the pillars, would make an effort to spread knowledge about the facilities so that they can be used by micro, small and medium enterprises as their priority and to most of the people,” he said.
Anwar also requested that a report on the efforts made by Boost Bank be presented by Digital Minister Gobind Singh Deo to the Cabinet within six months.
The prime minister also said he was confident the target of 400 e-payment transactions per capita can be achieved earlier than the original target of 2026 through efforts by digital banks.
“This is not a target that is too high and difficult to achieve and I expect that if we have a stronger desire, we should achieve it sooner.
“If banks give a lot of general information about banking to consumers, they should also inform consumers about new findings about digital,” he said.
