Global FinTech Guide
Country Name
Online banking services
FinTechs belonging to this area offer traditional banking services in a modern way, usually through online services or mobile applications as well as ancillary services – e.g. enabling customers to manage their giro- or custody-accounts online and in real time or offering e-wallet services. Keywords in this context are also API-Banking or Banking as a Service (BaaS)/ Bank as a Platform (BaaP).


API stands for application programming interface and is offered to access data banks and to extract and insert information. API-Banking consequently means the access to data banks of banks to offer new and innovative banking applications.

Through these services FinTechs offer services with new functions, e.g. enabling customers to manage their accounts online and in real time.

BaaS – Bank as a Service/BaaP – Bank as a Platform:

The API-based Bank as a Service platform has a full banking licence, but merely serves as the back end for standalone independent FinTechs, which “use” the licence and the back end of the bank to offer new financial services, launch additional financial products or expand into additional markets.


Attitude of the country towards online-banking services

Both regulators and the public are very receptive of the innovative changes within online banking services.

Legal affairs

Obligations and requirements to provide online-banking services described above

Generally, only licensed financial institutions (“FI”) which have obtained prior approval from BNM may offer online-banking services as described above. However, in practice FinTechs can bypass this restriction by partnering with FIs and hosting their services through the digital channels of the FI.

Alternatively, FinTechs may apply to participate in the Fintech Regulatory Sandbox (“Regulatory Sandbox”) by BNM. The Regulatory Sandbox is targeted at innovative solutions which are either wholly or partially incompatible with the existing regulatory framework administered by BNM. Approved participants of the Regulatory Sandbox will be given a 12-month period (or such other approved extension) to test its product, service, or solution in the Regulatory Sandbox with such regulatory flexibilities, as may be granted by BNM. Upon completion of the testing, BNM will decide whether to allow the product, service or solution be introduced in the market on a wider scale; or to prohibit the deployment of the product, service, or solution in the market

Additional comments regarding the legal situation for online-banking services or what FinTech’s must be aware of in this business area

BNM has issued a Policy Document on Licensing Framework for Digital Banks on 31 December 2020, and have recently granted digital bank licenses to 5 consortiums. Digital banks are expected to offer banking products and services to the underserved market wholly or almost wholly through digital or electronic means.

Economic conditions

Market size for online-banking services and biggest companies in this business area

We find that the market for online-banking services would be as big as the whole banking industry. It is understood that all major banks in Malaysia are actively looking to collaborate with FinTechs that can offer innovative solutions.

Additional comments regarding the economic situation for online-banking services or what FinTech’s must be aware of in this business area




© 2022, Lee Hishammuddin Allen & Gledhill. All rights reserved by Lee Hishammuddin Allen & Gledhill as author and the owner of the copyright in this chapter. Lee Hishammuddin Allen & Gledhill has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this guide.

The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.


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