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BNM defines digital banks as financial institutions that primarily provide banking services through digital channels, including mobile applications, tablets, and the internet.
Unlike traditional banks with physical branches, digital banks operate entirely online, allowing them to streamline services and reduce operational costs.
These banks are designed to improve accessibility to financial services, promote economic growth, and drive financial inclusion, particularly among underserved and unbanked communities in Malaysia.
The emergence of digital banks in Malaysia is a direct response to the increasing demand for seamless, efficient, and cost-effective banking solutions. Digital banks leverage cutting-edge technology such as artificial intelligence, real-time analytics, and 24/7 customer support to enhance banking experiences.
By eliminating geographical barriers and reducing transaction costs, digital banks enable Malaysians to manage their finances more conveniently, whether for personal savings, business transactions, or credit accessibility.
Bank Negara Malaysia regulates digital banks to ensure financial stability, innovation, and financial inclusion. Introduced on 31 December 2020, BNM’s licensing framework aims to promote new entrants while safeguarding consumer interests and the broader financial system.
BNM issues two types of licences which are the Digital Bank Licence for conventional digital banks and the Islamic Digital Bank Licence for banks complying with Shariah principles. These licences fall under the Financial Services Act 2013 (FSA) and the Islamic Financial Services Act 2013 (IFSA).
In the framework, it is stated that applicants must demonstrate a strong financial inclusion strategy, particularly focusing on serving underserved communities and MSMEs.
BNM evaluates applications based on several key factors, including financial strength, business feasibility, technological innovation, and commitment to expanding financial accessibility.
Once licensed, digital banks enter a foundational phase lasting between three to five years. During this period, they must comply with strict regulatory limits, including a total asset cap of RM 3 billion and a minimum capital requirement of RM 100 million.
This phase allows them to establish operational stability, strengthen risk management frameworks, and ensure sustainable growth before transitioning to full-scale banking operations. Upon completion, they must meet all standard banking regulations, including maintaining a minimum capital fund of RM 300 million.
To maintain trust and stability, BNM enforces continuous compliance with liquidity requirements, capital adequacy standards, consumer protection policies, and cybersecurity measures.
The Central Bank of Malaysia aims to foster responsible digital banking growth, enhance consumer confidence, and expand financial access across Malaysia, all by implementing this structured regulatory approach.
Currently, Malaysia has five licensed digital banks. GXBank was the first digital bank to launch, backed by Grab Holdings Inc. and Kuok Group. AEON Bank , owned by AEON Financial Service Co. Ltd, made history as Malaysia’s first Islamic digital bank.
Boost Bank emerged as a fintech-powered banking solution under Axiata Group and RHB Banking Group. KAF Digital Bank positioned itself as the second Shariah-compliant digital bank in Malaysia. At the same time, Ryt Bank, introduced by the YTL-Sea consortium, leverages AI for a more personalised banking experience.
The first step in choosing a digital bank is understanding your financial needs.
Some digital banks focus on personal finance products such as savings accounts, loans, and payment solutions, while others cater to businesses by offering trade financing, business loans, and multi-currency accounts.
Identifying whether you require a digital bank for personal use or business transactions will help narrow down the right choice.
Different digital banks have varying fee structures. While some offer zero fees for basic transactions, others may impose charges for fund transfers, loan processing, or currency exchanges.
It is crucial to review these costs carefully to avoid unexpected expenses. Customers should consider banks that provide transparent pricing models with minimal hidden fees, ensuring cost-effective banking solutions.
A well-designed and intuitive mobile app or online platform is essential for seamless digital banking. The best digital banks provide features such as AI-driven financial insights, real-time notifications, and personalised budgeting tools.
Evaluating the usability of an app, its security measures, and its overall efficiency in managing transactions is important when selecting a digital bank.
Reliable customer service is vital when dealing with financial matters. The top digital banks offer multiple support channels, including AI-powered chatbots, email assistance, and dedicated phone lines.
Efficient customer service ensures users receive prompt resolutions to technical issues and financial inquiries, enhancing overall satisfaction and trust in the bank.
Checking a digital bank’s reputation before signing up is an important step. Reading online reviews, exploring customer feedback, and assessing a bank’s history of service reliability can provide valuable insights into its credibility.
A well-reviewed bank with positive customer testimonials and high satisfaction ratings is more likely to offer a secure and smooth banking experience.
The table below provides a comparative analysis of the five digital banks in Malaysia, including their ownership, licensing type, target customer segments, and key solutions offered.
| Feature | Ownership | License Type | Target Customers | Solutions and Services (Individuals) | Solutions and Services (Businesses) |
|---|---|---|---|---|---|
| GXBank | Grab & Kuok Group | Digital Bank | Individuals & MSMEs | Savings, FlexiCredit, GX Card | GX Biz Account, GX FlexiLoans |
| AEON Bank | AEON Financial | Islamic Digital Bank | Individuals & MSMEs | Savings, Payment Cards, Budgeting Tools | SME Financing, Easy Payment Schemes and Insurance Broking |
| Boost Bank | Axiata & RHB | Digital Bank | Individuals & MSMEs | SavingsJar, Debit Card | SME Financing, Capital by Boost Credit, Boost Biz App & Web Portal and Bigshots Loyalty |
| KAF Bank | KAF Investment Bank Berhad, Carsome, MoneyMatch, Jirnexu & StoreHub | Islamic Digital Bank | Pending Launch | Pending Launch | Pending Launch |
| Ryt Bank | YTL & Sea Group | Digital Bank | Pending Launch | Pending Launch | Pending Launch |
Source: Respective banks as of 13 February 2025