Malaysia Bank News: Aeon Bank or Bank Aeon
Did we have more banks last time?
A long time ago, before the 1997/98 ASEAN Financial Crisis, Malaysia used to have close to 60 local banks. Names such as Kwong Yik Bank or Ban Hin Lee Bank are no longer known today as all the banks were merged to ensure the banking industry is stronger with just 10 anchor banks. These days, the number is 26 (both local and foreign banks). So, yes, we did have a much higher number of banks previously versus today.
What happening soon? More banks? Aeon and Boost?
This number of banks in Malaysia will start rising again because we will have more new banks coming into the scene as digital banks. Briefly, these are not traditional banks. They do not need as many people, they do not need to have branches all over the country and they are still able to serve their targeted market. That’s the reason why the consortiums usually have traditional banks as a partner. Now, two new digital banks have just announced to the public that they have received the approval from Bank Negara Malaysia (BNM)
Article in malaymail.com This is the statement from Aeon Credit Service, ““This positions Aeon Bank as the first Islamic digital bank in Malaysia, and the approval was granted pursuant to BNM’s validation of the bank’s operational readiness,”
This is the statement from RHB Bank on Boost Bank. ““This marks a momentous milestone as the consortium becomes the first primarily Malaysian-owned digital bank to commence operations with a pioneering embedded digital bank application (app) in the local market, designed to meaningfully address financial inclusion gaps for the underserved and unserved.” Do refer here for the full article with more details: Article in malaymail.com
The more the merrier for me as a consumer
It’s a simple fact. More choices is always good as long as every bank has something different to offer. If every bank is the same, then no need so many lah. I think digital banks can offer slightly higher interest rates because they have less fixed cost. The only thing is that they must always be regulated so that we do not have any unforeseen circumstances happening.
Any bank, whether digital or traditional, if they become big, they could also become a risk to the whole banking industry. Just look at what happened in the US Mortgage Crisis and you will know. We cannot simply just let the banks do whatever they want to do yeah. All the best dear Aeon Bank and Boost Bank.
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