Freshly flush with millions in fundraising, Joe McGuire is now preparing to take the next steps on his path to launching the world’s first standalone central bank-licensed Islamic challenger bank.
In September, McGuire’s fintech start-up, MyMy, was on the receiving end of a 10 million ringgit ($2.45 million) seed injection from Koperasi Tentera, an association of armed forces veterans and one of Malaysia’s leading credit co-operatives. This money will be used to pave the way for McGuire’s ultimate goal.
“It’s our ambition to be the first digital Islamic bank in the world. Really, it’s going to be a matter of time before that happens,” he told Salaam Gateway over coffee in Kuala Lumpur, where MyMy is based. “We’ve now got a great investor which I think will help us along that journey. But there’s still a very long way to go.”
With services like Germany’s Insha already available, many may believe MyMy is late in its plans to be the first Islamic digital bank. But as a digital offshoot of Istanbul-headquartered Albaraka Türk Participation Bank that does not have its own standalone full banking licence, Insha cannot claim the crown in this category.
A more likely contender for first place as a standalone central bank-licensed Islamic digital bank might be IBA of Australia, which hopes to receive a banking licence from the Australian Prudential Regulation Authority next year. But with plans to open a physical branch in Sydney, it could not claim to be a fully digital bank.
Before any first virtual bank takes root in Malaysia, it needs one of the probably five digital banking licences that will be issued by the central bank, Bank Negara Malaysia, next year. As many as 50 institutions and consortiums, both local and from around the world, are currently awaiting the release of the licence application process before they can place their bids.
MyMy is using this time, and its recent funding, to make hay in the pursuit of an e-money license from Bank Negara to operate an e-wallet. On the back of this, MyMy will apply for a full virtual banking licence when the doors open in 2021.
“This e-money license will allows us to iterate in the market by getting our product to consumers and finding out what works and what doesn’t work on our journey to becoming a digital bank,” said McGuire, who co-founded MyMy in 2018 with Kishore Samuel, who has occupied senior positions in banking, government-liked companies and investments in Malaysia.
McGuire has enjoyed a fast-paced career in finance that took him from trading and consulting to being Commonwealth Bank’s youngest state manager in his native Australia. The 32-year-old chief executive subsequently moved into the role of global head of sales and partnerships at a start-up, Airwallex, that quickly evolved into being Melbourne’s first fintech unicorn.
On MyMy’s management team is its chairperson Tunku Ahmad Burhanuddin Tunku Adnan, a former executive director of CIMB Bank and currently a director of Bank Rakyat. The finance grandee has formed a committee of Shariah specialists to develop MyMy’s Islamic banking strategy.
“We have a Shariah advisory board that consists of industry experts from both academia and business that will guide us not only on structure, strategy and practices, but also on the product suite that we will eventually roll out,” Tunku Ahmad Burhanuddin told Salaam Gateway.
Subject to receiving a digital banking licence, the virtual bank will initially offer products that “suit the demographics of our customers and partners”, and eventually comprise a full suite of Shariah-compliant products.
“The roll-out will be staggered, though we envisage this will be done fairly quickly in the initial stages,” he added.
Little else has been revealed about MyMy’s Shariah approach, and the start-up is wary about disclosing too many details before the central bank has examined its licence application.
“Until we get our licences, Bank Negara is really averse of us talking about what our products are going to look like,” said McGuire. “But it’s an incredible opportunity for us to do something different.”
Source Salaam Gateway