{"id":52750,"date":"2024-06-06T17:30:11","date_gmt":"2024-06-06T09:30:11","guid":{"rendered":"http:\/\/wordpress-my-161844363.ap-southeast-1.elb.amazonaws.com\/articles\/?p=52750"},"modified":"2024-06-07T11:26:35","modified_gmt":"2024-06-07T03:26:35","slug":"digital-banks-vs-traditional-banks","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/digital-banks-vs-traditional-banks","title":{"rendered":"What Do Digital Banks Offer Customers Compared To Traditional Banks?"},"content":{"rendered":"

Even as we speak, banks around the world are going digital. Just recently, five new applicants have obtained digital bank licenses in Malaysia.<\/p>\n

In Malaysia, three digital banks have been given official approval to launch their digital banking operations. GXBank led the way by launching their app<\/a> back in November 2023. Both Boost Bank<\/a> and Aeon Bank<\/a> followed up with official launches this year.<\/p>\n

This is exciting news as digital banks have the potential to be a game changer in the world of finance. In 2022, Bank Negara had announced the five digital bank licence winners<\/a> for Malaysia. They were required to undergo a period of operational readiness audited by Bank Negara (BNM) for 1 to 2 years.<\/p>\n

<\/span>Who are behind Malaysia\u2019s five new digital banks?<\/strong><\/span><\/h2>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t
Licence Winners<\/th>Details<\/th>Status<\/th>\n<\/tr>\n<\/thead>\n
Sea Limited and YTL Digital Capital<\/td>Sea Limited is known for being the holding company for Shopee and SeaMoney, while YTL Corp is amongst the largest companies listed in Bursa Malaysia and is into utilities.<\/td>
\nN\/A<\/td>\n<\/tr>\n
KAF investment bank, MoneyMatch, Carsome, Jirnexu<\/td>Led by KAF Investment Bank, this consortium consists of well known Malaysian startups and is largely considered a dark horse in this race.<\/td>
\nN\/A<\/td>\n<\/tr>\n
GXS Bank Pte Ltd and Kuok Brothers Sdn Bhd<\/td>This is essentially a Grab-led digital bank consortium that will be targeting local micro-SMEs and other financially underserved segments such as gig economy workers.<\/td>
\nLaunched<\/td>\n<\/tr>\n
Boost Holdings and RHB<\/td>Boost and RHB have partnered up to create greater access for financial inclusion digitally amongst the underserved and unserved segments. <\/td>
\nLaunched<\/td>\n<\/tr>\n
Aeon Credit, Aeon Financial Services and Money Lion<\/td>This is a 45%:45%:10% joint venture between Aeon Credit, it\u2019s parent company Aeon Financial services and MoneyLion Inc. MoneyLion will be the main AI, data analytics and tech provider for the digital bank.<\/td>
\nLaunched<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

However, despite their potential, will digital banks really revolutionise the market the way we think it will? In the meantime, the existing banks will be busy ramping up their digital banking services.<\/p>\n

<\/span>What is the difference between digital banks vs traditional banks?<\/span><\/h2>\n

For the most part, there aren\u2019t that many significant differences between digital banks and conventional ones. Both can offer banking services such as deposits, withdrawals, transfers, investments, loans, etc.<\/p>\n

What truly separates the two is that conventional banks have a physical presence in the form of the head office and its branches. On the other hand, digital banks can operate with just the head office.<\/p>\n

While you can also do online banking with traditional banks today, here\u2019s what digital banks in Malaysia will offer based on the licences awarded by BNM<\/a>:<\/p>\n