National Bank has recently announced the names of the five successful consortia that have applied for a digital banking licence. The earliest the country’s digital bank could go live would be 2024.
According to a news release from the National Bank, the five successful applicants are the consortia of Axiata and RHB, Grab, Singtel and Kuok Brothers, Sea and YTL, AEON and MoneyLion, and KAF.
By Digital Banking we mean the complete digitalisation of the bank and all its activities, programmes and functions. In contrast to traditional banks, digital banks no longer rely on a physical branch network, whether they have branches or not, but have a digital network as the core of the bank.
Digital banks can complement traditional banks, which now mainly serve people with good credit histories, and those who do not have credit histories find it difficult to obtain loans from traditional banks. Digital banking will therefore primarily help those with no credit history, and will be an alternative way of determining whether they are eligible to borrow.
Here’s a look at the advantages and benefits of digital banking.
1. Greater convenience
Digital Banking does not have physical branches and all banking services will be conducted online. Users can conduct banking transactions directly through their mobile phones, computers or tablets.
2. Targeting currently uncovered groups
There are many users who face insufficient credit history and therefore cannot successfully apply for loans or banking services, and the digital banking aspect minimises these problems. Digital banking can be used to cast the credit history of users in other ways.
3. More choices
Users will have more financial instruments to choose from and will no longer be limited to large loans or financial services.
