Malaysia’s digital banks are given up to five years to prove that they can stand and meet their value propositions, part of their “foundational phase”.
Under Bank Negara Malaysia’s licensing framework for digital banks, BNM will assess each digital bank on three things: whether it complies with the relevant laws and regulations, whether it holds at least RM300 million in capital funds that losses haven’t eaten into, and whether it has made good progress on the value propositions set out in its business plan.
Once the bank ticks all three boxes, its foundational phase can end, and its business limitation is lifted.
A digital bank that falls short could be subject to enforcement action, including a directive to implement its exit plan. Given these circumstances, how each digital bank advances towards its goals becomes an interesting matter to watch.
What’s the current state of digital bank losses in Malaysia, including their deposits and overall developments in 2026?
Digital Bank Losses in Malaysia Widen For Four Banks
According to research from the Malaysia Fintech Report 2026, four of Malaysia’s digital banks, GXBank, AEON Bank, Ryt Bank, and KAF Digital Bank, lost more money in FY2025 compared to the previous year.
Ryt Bank posted the largest jump, with its loss widening from RM66 million in FY2024 to RM109 million in FY2025. GXBank’s loss, meanwhile, was the highest in FY2025 among all five banks at RM236 million.
Boost Bank was the only one to narrow its losses by RM1 million to RM68 million in FY2025.
Ryt Bank and GXBank Lead in Deposits
GXBank had an almost two-year head start over Ryt Bank, but at the end of FY2025, Ryt Bank was able to report RM1.61 billion in deposits, just inches ahead of GXBank’s RM1.60 billion, according to the report.
The gap widens vastly after. Boost Bank held RM634 million in deposits, with AEON Bank not too far behind at RM575 million.
KAF Digital Bank sits at the final spot, with RM261,000 holding a share of less than 0.1%. KAF Digital Bank is notably one of the newest entrants, launching in August 2025 with Ryt Bank.
GXBank And AEON Bank Offer the Widest Product Range
Based on analysis conducted by Fintech News Malaysia, GXBank and AEON Bank lead with the widest digital bank offerings in Malaysia. Both banks offer seven out of the 10 retail and business product types tracked in the report, as of July 2026.
The product types cover savings accounts, debit and credit cards, lending, insurance, investments, business accounts, and finally, trade finance. Interestingly, none of the banks offers credit cards, investment, or trade finance products.
KAF Digital Bank offers the smallest number of solutions among the banks: a savings account and a debit card. In doing so, the bank has met BNM’s deadline to roll out basic banking services.
But as all four of its peers already pair savings with lending, insurance, investment, or business account services, this could leave KAF Digital Bank with the fewest reasons for customers to choose it. Shariah-conscious customers already have an alternative in AEON Bank, the other Islamic digital bank, which offers seven product types.
KAF Digital Bank shared in April 2026 that it is building out its Shariah-compliant digital banking offerings to race towards its next growth stage.
What’s Next for Malaysia’s Digital Banks?
What are the near- to mid-term goals and milestones that the banks are ticking off to narrow their losses?
Based on recent developments, GXBank shared that it is pushing to graduate from its foundational phase and looking forward to its next stage of growth.
Its CEO, Kaushik Chowdhury, shared with The Edge that BNM was evaluating GXBank as of September. The bank is targeting profitability in 2028 as its lending book scales lending book to RM1.21 billion in end-June 2026.
Ryt Bank, meanwhile, passed 1.5 million customers by its first anniversary in August 2026. It also became the first digital bank here to support Apple Pay.
Aside from that, select Ryt Bank customers can now borrow on a bigger scale by applying for up to RM100,000 with Ryt Credit by submitting supporting documents.
Boost Bank, which is aiming for profitability by 2028, has formed strategic partnerships with companies like Funding Societies to deliver property-backed SME financing more effectively.
Next, AEON Bank has been ramping up its AI-powered interactive app feature, AEON Neko Sensei, while also enabling shariah-compliant financing for businesses under AEON Bank Biz, its business banking vertical. The latter is available to selected customers as of the time of writing.
KAF Digital Bank is a harder read, as limited information is available on how the bank is developing. What it does make public is its hibah.
The bank publishes the historical hibah for its Savings Account-i, and recent entries show 5% p.a. on the first RM2,000 and 3% p.a. on balances above RM2,000.
As Bank Negara Malaysia’s five-year window closes in, which digital banks can show that they have built a viable business by serving customers who were previously overlooked?
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Featured image edited by Fintech News Malaysia based on an image by rawpixel.com on Magnific
