BNM continues to facilitate new digital-first players into the financial sector
KUALA LUMPUR - Bank Negara Malaysia (BNM) has continued its efforts to establish a conducive ecosystem that spurs greater innovation, competition, and dynamism, and a key part of this is facilitating the entry of new digital-first players into the financial sector.
In its Annual Report 2022 released today, the central bank said the Finance Minister, Datuk Seri Anwar Ibrahim had granted conditional approval to five digital bank applicants in April last year.
"The digital banks are currently undergoing operational readiness checks and may begin operations by the second quarter of 2024,” said BNM, adding that digital banks offer banking services online without a physical branch network; apply innovative technologies; and are expected to focus on underserved and unserved segments.
The central bank also said new digital insurers and takaful operators (DITOs) may soon enter Malaysia’s financial landscape to deliver greater inclusion, market competition, and efficiency, primarily through digital means.
In November 2022, BNM issued an exposure draft on the Licensing and Regulatory Framework for DITOs.
"We sought to introduce licensing requirements that are proportionate to the complexity of DITOs during their initial stage of operations. "Similar to digital banks, the newly licensed DITOs will be required to observe a foundational phase and comply with sound risk management and consumer protection requirements,” it said.
BNM aims to finalise the policy document and invite applications for up to five DITO licences in 2023.
In 2022, BNM focused on promoting a financial system that supports a more digitalised, diversified, inclusive, and climate-resilient economy guided by the Financial Sector Blueprint 2022-2026.
Going forward, in 2023, BNM said it will continue to ensure that the Malaysian financial sector remains progressive in responding to emerging market developments and inclusive in serving the existing needs of the nation.
"The Malaysian financial sector must continue to meet milestones in its ongoing digital transformation journey.
"In support of this, BNM will be finalising the licensing framework for DITOs and prepare for the commencement of operations of the country’s first five digital banks,” it said. - BERNAMA