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Exploring Malaysia’s digital banking revolution: From GXBank’s pioneering journey to the future of financial inclusion under the MADANI Economy. Join us as we speak with Kaushik Chowdhury (CEO) and Hildah Hamzah (Deputy CEO & COO) of GXBank on how digital banks are reshaping savings, credit access, and MSME growth.
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00:00Welcome to Niagaoni with me Nabila Kalida and today we're diving into the Malaysia's
00:12rapidly evolving digital banking landscape and it has been almost two years since the
00:18digital bank GX Bank went live marking a major turning point in how Malaysians save
00:24transact and also access credits and to help us understand Malaysia's banking landscape right
00:30now and what it means for everyday Malaysian also MSMEs we have with us Casey the CEO of GX Bank
00:37and also on the most right is Hilda Hamza the Deputy CEO and also CEO of GX Bank good morning thank you
00:43for joining me in the studio this morning how are you guys good morning Nabila thanks for having us
00:48it's so exciting to come here and share with your audience our journey so far amazing how are you
00:53we've been good thank you amazing amazing but to start off this discussion today before we go
00:59deep into the discussion like I mentioned early has been to almost two years since GX Bank went live
01:05marking a major turning point but maybe from your perspective you could start with Casey first what
01:12are the key differences of a digital bank if you were to compare with a traditional bank or we call
01:17it as a legacy banks as well I don't know whether the legacy banks will like both of us calling them
01:22legacy but they do have legacy that's I think the starting point of our difference so when so
01:28digital bank typically what we are is we will live only on your mobile app we don't have branches but we
01:34have 24 7 customer service through our app and you know we actually also have a contact center but
01:40because the fact that you know there is no physical presence the advantage is that you will have lower
01:45operating cost hence you will be able to bring down the cost of serving the customers and pass it on to the users so that's the hypothesis
01:52hypothesis now obviously like we'll talk more about it as we go along in the first couple of years that
01:57hypothesis indeed proving proving correct and maybe from Hilda from your perspective what's the difference
02:03that you see about traditional bank and also digital bank I think it's about the journeys that each customer
02:11takes so if you need to open an account when you're with a digital bank the experience is different so you take
02:18out your phone and you just do what you need to do if it's a more established institution you usually
02:25you go to the branch and you do whatever you need to do you take a number so I think the real difference
02:30is actually the customers interaction with the bank and I think that's the real differentiator when you take
02:37the lens of the customer right so I think that's a at least for me that's in my mind that's the real difference
02:44it's easier access it's easier access is accessibility that comes with affordability and then also you
02:53know capitalizing on different generational needs my my mother still wants to go to the branch my
03:02children doesn't understand what's a branch so it's it's that as well right I think that would be like the
03:09real difference it's okay to all generations yes to all generations moving with time using technology
03:16as the basis of actually accessibility and affordability of financial services right so
03:23yeah that's I think the big difference interesting I want to ask this next question to Casey you step into
03:30the role of CEO in June if I'm not wrong and since taking the helm how it has the journey been so far
03:37be it operationally strategically and also even culturally actually Malaysia's first fully digital
03:44bank how has it been so far it's a it's a I think the most interesting exciting thing I have done in
03:51my life so I've been a retail banker all my life and you know the good thing about you know taking over
03:57this new role is I have been with the bank from day one literally before our first line of code was
04:02written so I was prepared for it in fact you know people will in fact digital banks right we start with
04:08technology you will really realize very quickly that tech is needed tech is a necessary condition but what brings that
04:16tech as Hilda was talking about customers right what brings the tech to the customers are actually your people so you
04:23need to have a mission driven team which believes in what the mission is which is use tech use AI use data to
04:31serve our customers the really inspiring part about our team is the what makes me come to work excited
04:38every day is the fact that you know we have a core team which is all local all local Malaysians who want
04:44to make a difference right it's not just a commercial setup that they have joined and they want to just you
04:49know do that they want to make a meaningful change in society a real difference to all local people and
04:55that mission right that's there in the heart so it's very inspiring for somebody like me to lead that
05:02team then you know then you feel inspired and responsible both at the same time and you can see
05:08meaningful progress which gives you confidence that you know finally we will succeed as a team since the
05:13team actually number so that's what really stands out the fact that I've got this team around me
05:19who want to make a difference to the country to all the all the people in the country it means means
05:24a lot the team is in the most important thing when it comes to a leading ship I would say but as you
05:32step into the role what are the surprises that you see that stood out in your senses especially when
05:38it comes to custom behavior or regulatory expectations or opportunities that emerge from Malaysia's financial
05:45landscape as a whole so the surprising thing and the one that book you know keeps me and Hilda up at
05:51night is the fact that so if you start with basics of banking forget the technology and the mobile app
05:56right so banks you trust you've been trusting for ages because you are actually giving your money and
06:02then transacting with the bank right so winning that trust is so very important now because right
06:08we know we've got so many customers who have trusted us and it's a good opportunity for me to tell you
06:14that we are almost two years old we have more than 1.2 million customers almost half of them users every
06:19day which basically means there is trust now that means there is a lot of scaling which is required
06:26which at which which is essentially that we need to be able to ensure that their money is safe we need
06:32to ensure when they transact with with us they have peace of mind so the trust factor is something
06:38right that keeps us up at night and keeps us focused on I know what we want to do and we get a lot of
06:44support from the regulator because this this is not possible without a regulator who understands how this
06:52thing will come into life have patience with us continuously do dialogue so that we can improve so the
06:58thing is surprising it's not a surprise but managing that scaling and ensuring that we have the trust of the
07:06people is is is what you know essentially is the crux of it the rest obviously right is going to come come you
07:14know come through as we grow like you know one of the big things right that we are working on and we'll talk about
07:19it is is how do you then use your data and your you know technology right to actually do what we are expected to do
07:27which is give credit access so essentially the scaling and the challenges around maintaining
07:34these people trust on you will be I think the single biggest factor right what what we what we watch
07:39for it's interesting because one of the thing when it comes to digitization or transforming towards
07:46digitization is the trust that will use the users the most but based on the report Jack's being
07:52reportedly onboarded relations at record speed when the wait-lease opened and adoption of your savings and
07:57payments features has been strong so Hilda maybe you can share on what are some of the early insight
08:02you have gained so far throughout these two years a part of the one of 1.2 million users I think what's
08:09more interesting um so let's just take a like maybe where we started off the intent for us to be there was
08:16to give accessibility and affordability to ensure inclusion and when we built we had that thought in mind
08:24mind right so what we did was we went out we said okay we understand these are your pain points what is very
08:31interesting now looking back two years is actually the fact that one like what Casey said there's a lot of trust and
08:39there's a lot of belief in what we are doing internally and externally so I think for me the inside was wow we built
08:48build something that people grew to trust and there's no physical representation the only physical
08:55representation we have is actually our debit card beyond that we don't exist anywhere physically so I think the
09:02trust is number one I think the second thing and we're happy to kind of speak about it as well is
09:07that we we went out our with our flexi credit and for me personally it was the insight that um we did a survey
09:16after doing a lot of uh work groundwork and growing our books um we did a survey we asked Malaysians
09:23why why do you want to take a financing a loan with me and and what kind of surprised me and the insights that
09:32I got was that it is while the tech matters actually what really mattered to the fellow Malaysians
09:39rakyat kita ni sebenarnya is the fact that we give them an opportunity to have a facility to which they never
09:48would have been able to get before and that matters because that's why we exist so that's the insight we had and
09:58and and I think for me personally that was a very interesting um insight and these are the people that
10:05actually and we have a lot of data like what Casey said right um they've told us they are actually earning
10:12below two thousand ringgit and yet we gave them their first credit and they are now able to move forward
10:20with a credit history which opens them which open doors for them opportunities for them
10:27yeah and dulu that do so I think that was a really important at least for me personally after working
10:33so hard you see the two years is when we have been open to public but actually the two of us have been
10:40slogging behind the scenes for four years it took us four years to get here and to look back now and say
10:46okay we did it we we set something out we did it um it might not be all shiny or all glittery or all
10:53you know nice and technology fronting and everything else but the reality is that you serve your purpose
11:01yeah it's a kind of feeling that can actually give back to this you give it back right and and and
11:05that's why like what Casey said right it's about the people the technology enables you to achieve your
11:11purpose and I think that's what at least for me personally the insight was very meaningful um
11:18how has the uh feedback been so far I mean of course the real feedback of course for the everyday
11:24Malaysian especially the underserved and also unbanked and also young workers the gig workers the real
11:31feedback that you've heard so far that you want to share maybe uh terima kasih for actually making uh creating
11:37GX Bank what can you share Casey so so you know essentially continue with what Hilda was mentioning
11:42so uh when we launched our Flexi credit product right it was done by doing you know research on
11:49four thousand people so you more or less knew what we wanted to solve for what uh people users customers
11:55told us at that time was uh you know when we need a lending product we need it fast and nobody gives it fast
12:02so it's not digital it's not instant they also told us that uh they struggled to prepay they wanted to
12:10make payments but generally there is a penal charge because that's what the existing banks do so when we
12:16rolled out our product right we gave super flexibility to our users one is we can give you a loan that's
12:21why most of our users are using it for emergency right we can give you a loan in 10 minutes it's digital
12:27you don't have to wait you have the flexibility to take any amount and prepay us back because we don't
12:33have any penal fees or nothing and obviously right that's the reason that the product is really doing
12:39well and so we went back actually so we went back to 19,000 of these users and asked them and it's what
12:45they what you know what they tell you is what you know Hilda was mentioning right it's so inspiring they
12:51tell us that they love the product because it's digital and instant they use it for emergencies and daily
12:56expenses and they love the freedom of being able to prepay back the loan when they need it without any
13:03penalty and a lot of them actually believe that you know by doing this they're building their credit
13:09profile so that's what they are telling us right and it's so inspiring for us given the fact that you
13:15know what we thought about the product does is actually doing much more than what we thought it can do so
13:22essentially the flexibility and the freedom that the users have to express how they want to use the
13:31lending and how they want to prepay the bank is I think the you know what you really take away and that
13:37will then you know feed into how we want to serve them in the future so that's what users are telling us
13:43that they simply love the product and the flexibility but achieve this kind of target and this kind of
13:49feedback I believe you know took a village of course and long term of you know hard work but to Hilda
13:58as a CEO you oversee the operational backbone of GX Bank one of the biggest challenges in scaling a fully
14:04digital bank well at the same time have to maintain the security the compliance also customer trust at the same time
14:10I think I think the biggest challenge to be very honest so you're absolutely right so that the the
14:18backbone of the bank and is actually trying to manage 1.2 million customers digitally that's the real challenge
14:28right and then first you have to because we have 600,000 over daily engagements the way we manage our operations
14:37our payment rails everything matters the second thing is of course because we're digitally native our
14:45ability to ensure security for each customer their transactions and everything else so the challenge
14:51always surrounds around number one ensuring that we have enough scale because 1.2 million people our
14:59our staff strength is only 400 people everywhere and the operations team is not the biggest team so
15:07so you just imagine the scale that we need and the efficiency that we build and the third thing is the use of
15:13technology so for us we use actually a lot of AI but what we don't tell you is that it's actually under the
15:21hood we use it a lot when it comes to managing things like our fraud we use our chat boards everything else so it's not always visible
15:35but especially when you run the bank the backbone of the bank is actually you know behind a lot of a lot of AI a lot of technology
15:43so for me personally ensuring that happens and it's like clockwork right it's always about your infrastructure your process and your people
15:51coming together that keeps me up at night because 1.2 million customers versus 400 people if you do the maths I don't think it's been heard of before
16:03at least in this country so yeah but besides Jax bank we have other four digital banks that have officially launched in addition to traditional banks that you know wrapping up their digital offerings so Casey how are you planning to sustain your growth in an increasingly competitive environment
16:27what joint strategies are you planning to stay ahead of this you know super fast and rapid growth of digital banking landscape
16:37excellent question Namila so let me try and take a stab at answering it my way right so obviously when Bank Nagara gave the digital bank licenses one thing was very clear and we have actually stuck to it right so if you think about it traditional banks and financial institutions serve a particular market
16:55our job is to find out segments of the market that they are not doing a good job with and that's because of obviously right the fact that they have legacy infrastructure
17:05they have you know they have been operating for many many years so our our core principle like the way we explain right both on flexi credit as well as our onboarding is to basically solve a foundational problem
17:17like you know you know people before we came along you know people used to struggle to open an account in four minutes get a loan in ten minutes so that first bit is already done which is you know you reimagine the experience make it easy take away friction take away penal charges make it easy for the user that's done the second bit is now going forward is essentially using data and tech and AI and all of that together in a human way to
17:47to actually extend credit to actually extend credit to these underserved segments to people who are not getting credit like the you know low income retail customer or the small micro merchant so if you are able to do that you will be able to find that segment which you are uniquely serving and hence you really don't need to worry about competition because you are competing essentially with yourself as far as the other digital banks are concerned I think most of them have native ecosystems
18:17and generally speaking the way we look at it we don't look at them as competition I think all of us can succeed we just keep focused on our purpose you know with our heart and we ensure that we do a good job and we wish all the others all the all the you know all the best right I think there is enough market enough user pain points to solve for all of us to be successful
18:42but how do you plan to align Jax Bank with this wider national vision under the modern economy for digital inclusion particularly in building financial literacy long-term financial resilience and also access for these two segments that we mentioned earlier the underserved and unbanked and also MSMEs because these two are the most important pillars when you talk about modern economy
19:04Yeah so I will start off and they will hand off to Hilda right so if you if you think about the first couple of years because building a bank roundup is tough right we want to do all of it together but it's very difficult to do it together so we rolled out retail first but actually right and we are in the process of rolling out we have rolled out micro micro merchants so the micro merchants is where we see the highest potential impact on nation building because if you think about it
19:34a micro merchant will employ some other people so if you think about it a micro merchant will employ some other people so if you are able to do that segment well so we already have like you know for instance
19:43and Hilda will talk more about it we have already rolled out but we are doing more you know we are doing sole proprietors but we are doing formalized like you know people with SSM
19:53we see a large market there of real micro merchants who are maybe not even on SSM we are on some other you know identities right or who are with partners right who are
20:03you know using wallets to transact right on their accounts how do you expand your scope to get those who are on the fringes of formal formal micro merchants and give them credit is going to be I think the biggest contribution digital banks and finance can make on that segment right so we have a lot of plans and why don't you why don't you share with Nabila our plans
20:28So I think let's just take a step back with the whole Madani intent I think overall we are so we believe that the digital bank serves a particular segment and understand that the current government's emphasis on growing the MSM is paramount it's also shown again in the last national budget
20:50I think what for us the digital bank there are spectrums so the MSM is this huge segment right and our competitors and the incumbent banks do very well in a lot of these segments so what at least we would like to do is to target very specific underserved unbanked segment that historically for various reasons are not able to access credit
21:18are not able to access credit so that's one second is to do it in a way that has meaning for them not just for the bank for them and because we too are part of a big ecosystem our ability to understand their needs is actually quite deep
21:38So moving forward we have chosen a specific segment of the underserved and unserved which are micro which currently we do as all technology companies do we go by stages so we do a bit and then we open up and we have actually in the past two months or so opened up our micro to sole proprietors who have
22:07SSM registration and we are learning from that and progressively we will expand so that actually I believe is very much in tune with the overall intent of the government to ensure number one sustainability because when you design based on the needs of the micro you make you try as best as possible to make sure that they are financially sustainable second is the fact that historically
22:35historically banks at least don't participate in that particular segment so then we go back to the thought of inclusivity which is so when you put it together I think for us the bank are very excited this would be as Casey said the real solve
22:54for Malaysia it's not so much it's not so much they're very good and the banks and everyone else do a really good job for us because we're new because we're a bit more curious
23:09and if we get to solve this I think it really goes well with the overall intent of the government in the madan economy as well as the overall long-term positioning of how you want to churn the business for the country right so I think that that's at least what we think and we're very excited this is our next engine for the bank
23:32so this is also a new initiative for the second year anniversary yes correct amazing yeah so we are actually going to go forward with what we call jagoh niaga so just to share what our thinking was because we have a an understanding of these micros actually financing is just the first part of it the reality is that they need help and support across different parts of their business so why so as a bank and because we have infrastructure we have ecosystem
24:02we say okay why don't we create what we call a jagoh niaga we make you champions but it's beyond financing I will connect you to different people different service providers different needs that you have and try to couple it with my financing and because we are part of a big ecosystem we hope that eventually it's more meaningful than just taking a loan so that's the genesis of kenapa kita nak buat
24:32jagoh niaga but yes we are launching it but yes we are launching it this week as part of our anniversary as casey said the next wave is this and we really hope that you know we can solve a lot of the country's pain points specifically for that side of it
24:47now congratulations and also happy anniversary uh to you guys to jacks banks as a whole so to rep to wrap up this the whole conversation for today perhaps your aspirations casey and then follow up with hilda's aspirations
25:01after two years uh after when uh going live please so the you know the aspiration is actually to continue to do what we are doing which is a you know i have this way of putting it saying we have to do what users love
25:16in a commercially feasible way using technology so i don't think those principles need to change in terms of a real aspiration where we want to be i think we we will we can do all of this
25:28if we also are ourselves financially self-sufficient so one of the things gx bank is working towards is to get to break even in a couple of years right then we can serve all of these segments
25:40even better because if you are financially sound you can take care of your users right so that would be the
25:47one that we are driving towards in the in the in the kind of medium term namila amazing hilda i have a very simple hope for the bank i hope that we become
25:58um um top of mind that we become a verb you know so i hope that as we grow instead of say oh uh you google lah benda ni you
26:12buat benda you know so i become a verb so jadinya you gx jelah benda ni oh amazing so that is my simple wish um
26:21that people think of us that way um instead of saying just you know oh pakai digital bank no you gx it
26:28please gx to me so that's my hope at least in the next few years digital bank also a mouthful to see
26:35yeah digital bank digital so so so now we never thought we would say uh google it or we said i mean
26:43you know whatever words that we use to actually describe but now i just hope that we eventually
26:49every year people will say oh jx jadeka i that would be the best so now i will take this actually right
26:55it's so it's so inspiring to even see hilda articulating that yeah see so if we really even
27:02aspire to be there to become a verb that is uh you know it will take us to a different stratosphere already
27:08this million that we are talking about and all these numbers we spoke about
27:12it's all a byproduct right if you have that aspiration with a willingness to serve the
27:17consumers from your heart amazing amazing thank you so much there was a koshio kc the ceo of gx
27:23bank also hilda hamza the deputy ceo and also ceo of gx bank discussing nation building in the
27:29digital age a topic that sits at the intersection of finance and also inclusivity and technology at
27:35the same time so thank you so much again for two of you for coming all the way to our studio
27:40discussing on this topic and you can find this whole discussion on all of our social media platforms
27:45and that includes astro awani.com thank you so much for watching
27:57you
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