Digital banks could be next for Sarawak’s fintech ecosystem

Abang Johari (fourth left) uses a mobile phone to scan a QR code as symbolic to launching the Innovation Hub. Also seen (from right) are Ting, Dr Sim and Tan.

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By Karen Bong

KUCHING, Jan 15: The state government is keen about setting up a digital bank for Sarawak.

Chief Minister Datuk Patinggi Abang Johari Tun Openg pointed out the possibility as Sarawak already has its own e-wallet system, which is Sarawak Pay, to generate profits.

He said that Bank Negara Malaysia (BNM) had announced the outline of the proposed Licensing Framework for Digital Banks late last year and that it was going to issue up to five licences to qualified applicants to operate digital banking services.

“So we also expressed out interest in pursuing the digital or virtual banking licence because we already have our own e-wallet, which means there is an active e-commerce and digital retailing.

“We will have to strategise first but let’s have our fingers crossed as we hope the federal government can consider giving us the licence,” he said, adding that the plan is still in the premature stage as central bank has just announced the venture and licensing rules.

He highlighted this when officiating the launching of Kuching Chinese General Chamber of Commerce and Industry (KCGCCI) Innovation Hub at the Chamber headquarters here today.

Abang Johari explained that the only difference for digital banking was the digitisation of all services, activities and processes delivered to consumers in a virtual environment compared to that of traditional banks in which consumers can be physically presence.

“But it is just like any banking business. The banking regulation would be under BAFIA (Banking and Financial Institutions Act),” he added.

Meanwhile, a key consideration for potential applicants to acquire the licence include a minimum capital fund unimpaired by losses by RM100 million for the virtual bank’s foundation phase, which would be increased to RM300 million subsequently.

On the innovation hub, Abang Johari commended this initiative as it was in line with Sarawak’s quest to transform and move the state forward through digital economy.

He emphasised that Sarawak ambitioned to be like Finland and Norway, which has similar scenario to Sarawak, but has a lot of sovereign funds and strong digital economy.

“Our natural resources, good environment and talented people are our strengths, but because we only have a small population, we need to leverage on technology and digital economy to accelerate and move Sarawak’s economy forward,” he reiterated.

“When we talk about business, market is the key. As such, we need to explore, connect and look beyond our shore as there are over 600 million population in Asean states while the population for Asia is over 3 billion people,” he said.

These were the main reasons, he added, as to why he initiated the digital economy strategy in order to push the growth of Sarawak into the future with upgrading of all infrastructure including telecommunications to roads, logistics and other utilities.

“Moreover, Sarawak is working towards creating a smart city which will be connected with technology,” he said.

He thus urged the chamber to train more young entreprenuers so that they can have the skills and knowledge to embrace digital technology especially in business.

Meanwhile, the establishment of the KCGC Innovation Hub was aimed at fostering young entrepreneurs who can assist and support the Sarawak government in the development of the state, especially in digital economy.

Minister of Local Government and Housing Datuk Seri Dr Sim Kui Hian, Minister of Transport Datuk Lee Kim Shin, Assistant Minister of Tourism, Arts and Culture Datuk Sebastian Ting, KCGCCI president Datuk Tan Jit Kee and organising chairman Rodger Chan were present. —DayakDaily