Partner Gaurav Kwatra sits down with GXBank chief executive officer Pei Si Lai to discuss the launching of the digital bank, the continued drive to serve underserved Malaysians, and the bank's future aspirations.

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INFocus provides exclusive insights and trends from experts and leaders across the Asia Pacific region, exploring the forces, opportunities, and challenges shaping its future.

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Pei Si Lai

We are here to change the way Malaysians bank in Malaysia. How do we actually bring innovation and challenge the status quo in the financial industry today? 

Gaurav Kwatra

Hi, my name is Gaurav. I'm a partner in Oliver Wyman's Banking practice in Singapore. Today I have the pleasure to be with Pei Si Lai, the CEO of GXBank, Malaysia. It's an absolute pleasure to be with you Pei Si, as always. 

Pei Si

Thank you.  Thank you, Gaurav, for having me. 

Gaurav 

Pei Si, just to start out, before anything, two weeks in, more than a 100k customers — how does it feel? 

Pei Si

We are truly humbled with the warm reception that our customers have given us so far. As a team, having worked on this for the last 18 months, it truly validates all the hard work that we put into this whole endeavor. Having been able to meet the milestones that we've just met, right? We launched the bank, and we got a hundred thousand customers and more. It's also given us, I think, renewed rigor as well as energy to start then looking at the next milestone and the milestones actually after that. 

Gaurav

Any new insights, any learnings from the last two weeks? You obviously went in with a plan with the customers. How's the reaction been, what have you learned so far? 

Pei Si

As we started to actually build a bank, what we really did was, we've done tons of surveys, done some focus group just to really actually figure out what are the different problem spaces that customers had. And when we spoke to Malaysians, what they are really telling us is that we really have problems saving. We want to save, but we also want to spend. We don't know when to start saving, we don't know when to stop spending. 

Taking these data points, we then design our product, our deposit product, to encourage savings. To give the opportunity for customers to make savings actually a lot easier and a lot more fun. In this regard, we started building Pockets, and in one account we have got many Pockets that customers could save into, and these Pockets could be for anything. 

In the last couple of weeks, what was really truly exhilarating, we saw how customers responded to us is 50% of them are saving into Pockets. Second, when we had this big scale of customers coming in all at one time, it's been very important for us to make sure that the bank is stable, the app is stable, the system is stable, and the processes stick. 

And the last couple of weeks as we actually launched the bank, it has given us the confidence on how we are designing the infrastructure of the bank, how we are designing the operating model, and how supporting customers works and how it can scale. 

Gaurav

That's awesome, that's awesome. I think the ability to deliver on customer needs and focus on that while running a business as complex as a bank is truly a big challenge and it's amazing that you're being able to pull that off. So that's quite amazing. 

But I also know you are not going to stop here. You want to continue to innovate, you want to continue to serve your customers more and more. What can they expect in the coming few months? 

Pei Si

First, the bank itself is a universal bank. We are here to actually serve the underserved and we have the ability to serve in many, many different types of products. So that's actually the first. Second is, we are a startup. We started really on a blank piece of paper. We really built everything from scratch. 

As we then think about 2024 as a start, the first thing we need to do is take the existing product that we've already built today and iterate it as customers' feedback comes to ensure that the product that we build will truly be valuable to the customers that we want to serve. 

Second is, because we are a bank, and any banker knows this, we have to operate actually on both sides of the balance sheet. We've got our deposit product that we have already gone out to the retail customers. We will start building the assets, which is retail lending, and that's a very exciting space because for the underserved segment that we target to serve, financial access and access to lending is one of the biggest pain points. 

Gaurav

So just imagine, fast forward this clock by five years, where would GXBank be in five years where you’ll say, “I think we did what we set out to do”. What's going to make you happy then? 

Pei Si

Okay, that's an interesting timeframe. The fact is, under the Malaysia digital bank licensing framework, all five digital banks have up to five years to graduate from the foundational period, that means that the banks are ready, to be independent, and is mature enough to compete with the rest of the banks in the financial industry. To earn that right means that you not only have to earn that right with the regulator, you have to earn that right with the customer because you have to be large enough, and you got to earn that right commercially as well, because you are on the path to profitability and be commercially viable. 

The first thing I'd like to see, as we talk about five years later, is we have already graduated. We are a fully-fledged bank. Second, GXBank is actually set up with two big mandates. The first mandate is to change the way that the Malaysians bank in Malaysia. To a large extent, what that means is, as a player in the financial industry, it's really about how do we bring innovation and challenge the status quo in the financial industry today. 

At the point of five years later, I'd like to also say we have led in some of the most innovative areas in the financial industry in Malaysia. [We become] one of those guys that you go to to look out for, right? When there's anything new and innovative, ah, it’s because of them, right? And they have made that change, not only for ourselves, but they have led the industry in that. 

The second big mandate is truly around serving the underserved, serving those who today do not necessarily have full financial access to the financial industry in Malaysia. At that point we'll like to be at a space where we can say that the average Malaysian is served by banks. Today only 45% are actually fully served, 55% are underserved. And at that point in time, if we could actually have more Malaysians say “I've been served by banks in Malaysia, particularly actually GXBank” — I think that would be a wonderful actual achievement. 

Gaurav

I think those are all really wonderful goals. Serving the underserved, disrupting the market with innovation, and becoming a full-fledged bank. With the amazing team that you have, the amazing customer centricity, and the energy that you've shown so far, we have a lot of confidence that you'll achieve all those goals. 

Congratulations so far and good luck for the future, Pei Si. 

Pei Si

Thank you. 

Partner Gaurav Kwatra sits down with GXBank chief executive officer Pei Si Lai to discuss the launching of the digital bank, the continued drive to serve underserved Malaysians, and the bank's future aspirations.

INFocus Series
INFocus provides exclusive insights and trends from experts and leaders across the Asia Pacific region, exploring the forces, opportunities, and challenges shaping its future.

Go to series

Pei Si Lai

We are here to change the way Malaysians bank in Malaysia. How do we actually bring innovation and challenge the status quo in the financial industry today? 

Gaurav Kwatra

Hi, my name is Gaurav. I'm a partner in Oliver Wyman's Banking practice in Singapore. Today I have the pleasure to be with Pei Si Lai, the CEO of GXBank, Malaysia. It's an absolute pleasure to be with you Pei Si, as always. 

Pei Si

Thank you.  Thank you, Gaurav, for having me. 

Gaurav 

Pei Si, just to start out, before anything, two weeks in, more than a 100k customers — how does it feel? 

Pei Si

We are truly humbled with the warm reception that our customers have given us so far. As a team, having worked on this for the last 18 months, it truly validates all the hard work that we put into this whole endeavor. Having been able to meet the milestones that we've just met, right? We launched the bank, and we got a hundred thousand customers and more. It's also given us, I think, renewed rigor as well as energy to start then looking at the next milestone and the milestones actually after that. 

Gaurav

Any new insights, any learnings from the last two weeks? You obviously went in with a plan with the customers. How's the reaction been, what have you learned so far? 

Pei Si

As we started to actually build a bank, what we really did was, we've done tons of surveys, done some focus group just to really actually figure out what are the different problem spaces that customers had. And when we spoke to Malaysians, what they are really telling us is that we really have problems saving. We want to save, but we also want to spend. We don't know when to start saving, we don't know when to stop spending. 

Taking these data points, we then design our product, our deposit product, to encourage savings. To give the opportunity for customers to make savings actually a lot easier and a lot more fun. In this regard, we started building Pockets, and in one account we have got many Pockets that customers could save into, and these Pockets could be for anything. 

In the last couple of weeks, what was really truly exhilarating, we saw how customers responded to us is 50% of them are saving into Pockets. Second, when we had this big scale of customers coming in all at one time, it's been very important for us to make sure that the bank is stable, the app is stable, the system is stable, and the processes stick. 

And the last couple of weeks as we actually launched the bank, it has given us the confidence on how we are designing the infrastructure of the bank, how we are designing the operating model, and how supporting customers works and how it can scale. 

Gaurav

That's awesome, that's awesome. I think the ability to deliver on customer needs and focus on that while running a business as complex as a bank is truly a big challenge and it's amazing that you're being able to pull that off. So that's quite amazing. 

But I also know you are not going to stop here. You want to continue to innovate, you want to continue to serve your customers more and more. What can they expect in the coming few months? 

Pei Si

First, the bank itself is a universal bank. We are here to actually serve the underserved and we have the ability to serve in many, many different types of products. So that's actually the first. Second is, we are a startup. We started really on a blank piece of paper. We really built everything from scratch. 

As we then think about 2024 as a start, the first thing we need to do is take the existing product that we've already built today and iterate it as customers' feedback comes to ensure that the product that we build will truly be valuable to the customers that we want to serve. 

Second is, because we are a bank, and any banker knows this, we have to operate actually on both sides of the balance sheet. We've got our deposit product that we have already gone out to the retail customers. We will start building the assets, which is retail lending, and that's a very exciting space because for the underserved segment that we target to serve, financial access and access to lending is one of the biggest pain points. 

Gaurav

So just imagine, fast forward this clock by five years, where would GXBank be in five years where you’ll say, “I think we did what we set out to do”. What's going to make you happy then? 

Pei Si

Okay, that's an interesting timeframe. The fact is, under the Malaysia digital bank licensing framework, all five digital banks have up to five years to graduate from the foundational period, that means that the banks are ready, to be independent, and is mature enough to compete with the rest of the banks in the financial industry. To earn that right means that you not only have to earn that right with the regulator, you have to earn that right with the customer because you have to be large enough, and you got to earn that right commercially as well, because you are on the path to profitability and be commercially viable. 

The first thing I'd like to see, as we talk about five years later, is we have already graduated. We are a fully-fledged bank. Second, GXBank is actually set up with two big mandates. The first mandate is to change the way that the Malaysians bank in Malaysia. To a large extent, what that means is, as a player in the financial industry, it's really about how do we bring innovation and challenge the status quo in the financial industry today. 

At the point of five years later, I'd like to also say we have led in some of the most innovative areas in the financial industry in Malaysia. [We become] one of those guys that you go to to look out for, right? When there's anything new and innovative, ah, it’s because of them, right? And they have made that change, not only for ourselves, but they have led the industry in that. 

The second big mandate is truly around serving the underserved, serving those who today do not necessarily have full financial access to the financial industry in Malaysia. At that point we'll like to be at a space where we can say that the average Malaysian is served by banks. Today only 45% are actually fully served, 55% are underserved. And at that point in time, if we could actually have more Malaysians say “I've been served by banks in Malaysia, particularly actually GXBank” — I think that would be a wonderful actual achievement. 

Gaurav

I think those are all really wonderful goals. Serving the underserved, disrupting the market with innovation, and becoming a full-fledged bank. With the amazing team that you have, the amazing customer centricity, and the energy that you've shown so far, we have a lot of confidence that you'll achieve all those goals. 

Congratulations so far and good luck for the future, Pei Si. 

Pei Si

Thank you.