The digital banking landscape in Malaysia has undergone a rapid transformation, with five players gaining approval from Bank Negara Malaysia (BNM). These digital banks are revolutionising how financial services are delivered to consumers and businesses alike, leveraging technology for convenience, innovation, and accessibility.
In this article, we’ll explore the offerings of these digital banks, highlighting their key features and what makes them unique.
Last Updated: 13 February 2025
What Are Digital Banks in Malaysia?
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.
BNM’s Role in Licensing Digital Banks in Malaysia
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.
How Many Digital Banks Are There in Malaysia?
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 made history as Malaysia’s first Islamic digital bank, owned by AEON Financial Service Co. Ltd.
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, while Ryt Bank, introduced by the YTL-Sea consortium, leverages AI for a more personalised banking experience.
List of Digital Banks in Malaysia (2025)
GXBank
GXBank, Malaysia’s first licensed digital bank, is a venture-backed by Grab Holdings Inc. and Kuok Group. This bank focuses on providing fully digital personal banking solutions, including the GX Account, GX FlexiCredit, and the GX Card, which offers instant cashback.
For businesses, GX Biz Banking provides a seamless digital onboarding experience, daily interest payouts, and flexible loan options. By leveraging data from Grab’s ecosystem, GXBank offers hyper-personalised financial solutions, making it a major player in the country’s digital banking sector.
AEON Bank
AEON Bank is Malaysia’s first fully Shariah-compliant digital bank, launching as the second digital bank in the country. It offers digital savings accounts, payment cards, and budgeting tools designed to provide secure and ethical financial products.
AEON Bank’s services are built to enhance financial inclusivity, catering to Malaysia’s diverse population with innovative and responsible banking solutions.
Boost Bank
Boost Bank is a digital bank launched through a collaboration between Axiata Group and RHB Banking Group. The bank integrates digital banking with Malaysia’s booming fintech ecosystem and entered the market in June 2024.
Through its mobile-first approach, Boost Bank enables users to open an account seamlessly via the Boost app. It also offers unique features such as the Savings Jar, which helps users develop better savings habits, and the Boost Debit Card, designed for everyday transactions.
This makes Boost Bank a top choice for digital-savvy consumers seeking an innovative and user-friendly banking experience.
KAF Digital Bank
KAF Digital Bank, led by KAF Investment Bank, gained approval from Bank Negara Malaysia in December 2024 and is currently in its alpha testing phase. Although not yet officially launched, it is set to become Malaysia’s second Islamic digital bank.
Once operational, it aims to provide Islamic savings accounts, investment solutions, and embedded financial services tailored for e-commerce and fintech ecosystems.
With a consortium that includes Carsome, MoneyMatch, Jirnexu, and StoreHub, KAF Digital Bank is well-positioned to lead Malaysia’s digital Islamic finance sector by offering secure and compliant banking options for consumers and businesses alike.
Ryt Bank
Ryt Bank, formerly known as the YTL-Sea Digital Bank, was the last of Malaysia’s digital banks to receive regulatory approval in early 2025 and is also in the alpha testing phase.
This bank is focused on AI-powered personalised banking services such as Ryt AI, with features that include an AI financial assistant, multilingual 24/7 customer support, and advanced security measures such as biometric authentication and real-time fraud monitoring.
Ryt Bank aims to make banking more accessible, particularly for underserved communities, by leveraging AI-driven insights to enhance customer experience and financial management.
How to Choose the Best Digital Bank in Malaysia
Type of Services Offered
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.
Fees and Charges
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.
Technology and User Experience
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.
Customer Support
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.
Reputation and Reliability
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.
Comparing Malaysia’s Digital Banks
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
The Future of Digital Banking in Malaysia
With these five digital banks now operational, Malaysia is entering a new era of financial services. Digital banks promise greater convenience, lower fees, and innovative features compared to traditional banks, which makes them a game-changer for financial inclusion.
As digital banking continues to evolve, several trends are set to shape the industry. The increasing use of AI will allow for smarter financial insights, while blockchain technology and decentralised finance (DeFi) will introduce more secure and transparent financial transactions.
Seamless cross-border payments will enhance financial connectivity, and embedded finance within e-commerce platforms will provide more integrated financial solutions.
Bank Negara Malaysia’s strategic push towards digital banking aligns with the Financial Sector Blueprint 2022-2026, positioning Malaysia as a leader in fintech and digital banking innovation.
A New Era of Digital Finance
The emergence of digital banks in Malaysia represents a fundamental shift in the nation’s financial landscape. These banks are not merely alternatives to traditional banking; they are actively redefining financial accessibility and inclusivity.
As traditional banks adapt and digital banks expand, competition will drive greater innovation, better financial services, and more personalised solutions for consumers and businesses alike.
However, challenges such as regulatory compliance, security concerns, and financial literacy must be addressed to ensure that digital banking serves all Malaysians effectively.
With Malaysia positioning itself as a leader in fintech, the coming years will be crucial in determining whether digital banks can fully deliver on their promise of financial empowerment.
The transformation is happening now, and digital banks are at the forefront of this revolution.
Are you ready to embrace the future of banking?
FAQs
1. Are digital banks in Malaysia safe to use?
Yes, digital banks in Malaysia are licensed and regulated by Bank Negara Malaysia (BNM). They must comply with strict governance, financial, and cybersecurity requirements to ensure the safety and security of customer funds and data.
2. How do I open an account with a digital bank in Malaysia?
Opening an account with a digital bank is simple and fully online. Users typically need to download the bank’s mobile app, provide identification documents (such as MyKad or passport), and complete the electronic Know-Your-Customer (e-KYC) verification process.
3. What services do digital banks in Malaysia offer?
Digital banks provide a wide range of services, including savings accounts, debit and credit cards, personal and business loans, investment solutions, and digital payment services. Some banks also offer Shariah-compliant financial products for Islamic banking customers.
4. Are digital banks different from traditional banks?
Yes, digital banks operate entirely online without physical branches. This allows them to offer lower fees, faster transactions, and innovative features such as AI-driven financial insights. However, they are still subject to the same regulatory oversight as traditional banks.
5. Can I withdraw cash from a digital bank?
Digital banks do not have physical branches, but many provide debit cards that can be used at ATMs. Some banks may also partner with existing ATM networks for cash withdrawals.
6. Do digital banks in Malaysia charge fees for transactions?
Most digital banks offer zero or minimal fees for basic transactions like fund transfers and account maintenance. However, some services, such as international transactions or credit facilities, may have associated fees.
7. Can businesses open accounts with digital banks in Malaysia?
Yes, many digital banks in Malaysia offer business banking solutions, including digital business accounts, SME loans, and trade financing. Some, like KAF Digital Bank and GXBank, focus on supporting small businesses with tailored financial products.
8. Are Islamic digital banks different from conventional digital banks?
Islamic digital banks, such as AEON Bank and KAF Digital Bank, operate under Shariah principles, ensuring that financial services comply with Islamic law. This means they do not charge interest (riba) and follow ethical financing structures.
Featured image credit: Edited from Freepik
