Singtel—Singapore’s biggest telco—announced the joint bid with Grab in a brief stock exchange filing on Thursday. The duo won a full digital banking license in the city-state last year and are preparing to launch their financial services by early next year.
The Grab-SingTel joint venture will be competing against a consortium led by budget carrier AirAsia’s fintech unit BigPay as well as Malaysian telco giant Axiata, which had partnered with lender RHB Group.
Malaysia is embracing online financial services after Singapore and the Philippines awarded digital banking licenses as regulators seek to broaden financial inclusion across the region. Some 290 million people in Southeast Asia do not have formal banking accounts, suggesting a huge untapped market for digital banks, Fitch Ratings said in a report published in August last year.
“Through innovative, efficient and secure banking services, we are confident our strategic collaboration will meet the fast-evolving demands of segments of retail customers and micro-SMEs overlooked by traditional institutions,” Axiata president and group CEO Izzaddin Idris said in a statement when the company announced its partnership with RHB last month.
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BigPay—which has teamed up with Malaysian Industrial Development Finance, a unit of the country’s largest asset manager Permodalan Nasional Berhad and Singapore-based private equity firm Ikhlas Capital—hopes to expand its financial services beyond digital payments and international remittance if it gets the license.
“BigPay Bank will allow us to execute deeper on our mission to build a connected financial future for Malaysian consumers and entrepreneurs,” BigPay CEO Salim Dhanani said in a statement. “If we’re given the licence, we’ll be able to reach more Malaysians with a wider range of services.”
The Malaysian central bank has said it received keen interest from 40 applicants for the licenses that will be awarded next year. A consortium comprising of real estate firm Sunway and Hong Kong-listed Linklogis, which is backed by Chinese tech giant Tencent, is also vying for a license, Reuters said, citing sources.
Singapore-listed online broker iFAST Corp., which failed to get a digital banking license in the city state, said on Wednesday it has formed a consortium with international partners to submit an application for the Malaysian license. The group will tap the bottom 40% of Malaysians who don’t have access to traditional banking services.
“We think that the bottom 40 segment has clearly been unserved and left behind even as Malaysia progresses,” iFAST chairman and CEO Lim Chung Chun, said in a statement. “With the synergistic capabilities within our consortium, the solutions offered for the bottom 40 are ones that will provide immediate benefits and results–such as free life insurance, interest-free loans for daily necessities, and micro investments and insurance. iFAST Bank will serve the bottom 40 segment and be profitable while doing so.”
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