Grab Malaysia eyes digital banking business
E-HAILING giant Grab Malaysia is exploring the opportunity to apply for a digital banking licence in line with the rapid growth of the digital economy in the country.
Country head Sean Goh (picture) said a feasibility study is underway before any firm conclusion and decision could be made.
“Technically, it’s not open for application yet. It is too early for us to say anything. The most important thing is, driving growth and income through digital economy in an inclusive way is one of three main pillars that will be our focus in 2020,” he told The Malaysian Reserve (TMR).
In December, Grab Holdings Inc and telecommunications company Singapore Telecommunications Ltd formed a consortium to apply for a full digital bank licence in Singapore.
“Grab has grown far beyond its ride-hailing roots. Since introducing the GrabPay wallet in 2016 and launching Grab Financial Group in 2018, it has built solutions in payments, rewards, lending and insurance,” it said in a statement.
Bank Negara Malaysia (BNM) announced plans to issue up to five digital bank licences in December.
On Tuesday, BNM issued an updated exposure draft on the licensing framework for digital banks that incorporates the proposed simplified regulatory framework applicable during the foundational phase.
According to a statement, the simplifications are aimed at reducing regulatory burden for new entrants that have strong value propositions for the development of the Malaysian economy, while safeguarding the integrity and stability of the financial system.
BNM is extending the consultation period for the exposure draft until April 30.
Meanwhile, Goh said Grab Malaysia will focus on three big pillars this year driving income and value for the economy and nation through digital, as well as gig economy; inclusiveness in digital economy; and protecting and better serving the people who are participating in gig economy.
He said people have been talking about higher cost of living while assuming that everything should be subsidised by the government.
“We would like to think of cost of living more from the perspective of raising people’s household income so that they can afford to keep up with higher cost of living.”
He said when it comes to raising income, the first thing people will jump into would always be demanding for a higher minimum wage, which is not always a bad thing.
“However, it is also not a good thing. Higher minimum wage means businesses will start to suffer, with business owners earning less and fewer jobs to go around.”
Last year, Grab Malaysia’s community of drivers and delivery partners added over RM3 billion to household income across Grab’s ecosystem of services Grab Rides, GrabFood, GrabMart and GrabExpress.
Grab Malaysia’s average monthly rides have been growing annually, helping provide more seamless mobility to commuters, while uplifting the lives of its 90,000 monthly active driver-partners.
To date, there are 20,000 riders registered with Grab in Malaysia. However, not all the registered riders will be doing the on-demand motorcycle service, GrabBike, which is currently in its pilot phase in the Klang Valley.
“It’s by invitation. First, we look at their ratings, safety record while doing food delivery and speeding record so that users will be served by qualified driver-partners who have completed their driver safety training and a practical riding assessment.
“It is a new service. We haven’t decided to expand this pilot project to other cities since the Proof of Concept (POC) is only for the Klang Valley.
“We haven’t actually explored what the government wants to do next. I think they need to assess the success of the POC first,” he said.
Grab Malaysia users can now opt to use GrabBike within Klang Valley, which is available for travel within a 10km radius from the passenger’s current location.
Goh said there’s a lot of costs being layered onto Grab’s system in recent years.
“Grab in Malaysia is run mostly by Malaysian, paying Malaysian taxes. Yet, in the ride-hailing regulations, there all these added costs layered on to the driver, to Grab and automatically would flow to consumers.
“So, this is a negative multiplying effect. Everybody suffers. If fewer people drive, service to the consumers is also affected. When it is harder to get a car, prices would go up and customers get impacted,” he added.