KAF Digital Bank, one of five digital banks licensed in Malaysia, officially commenced operations in December 2024 after receiving conditional approval in 2022, contingent on meeting operational readiness standards. According to its CEO, Rafiza Ghazali (Rafiza), the bank launched its PERINTIS phase in April 2025 with a small cohort of early adopters—beta users chosen from a waitlist of interested registrants—to test core functionalities and provide feedback before a full public rollout. Laying the foundation: From licence to launch “We called them ‘PERINTIS’ users because they are pioneers in experiencing and helping shape our Shariah-compliant digital banking app,” Rafiza explained. “Their role was critical in pointing out areas that were intuitive to our internal testers but confusing to new users.” This soft launch approach allowed the bank to test core components such as account creation, payments, and customer support processes with real users for the first time. Weekly feedback surveys were deployed to gauge user sentiment, uncover friction points, and prioritise fixes. “We studied their feedback every week, both qualitative and structured through surveys, and then prioritised fixes—functionality first, then nice-to-haves,” Rafiza said. A differentiated model rooted in consortium synergy Unlike its peers, KAF Digital Bank operates under a unique consortium model led by KAF Investment Bank, with four platform partners: Carsome, MoneyMatch, Jirnexu and StoreHub. Each brings a niche customer base and domain expertise. For example, Carsome’s marketplace for used cars is a natural acquisition funnel for auto loan customers, particularly gig workers underserved by traditional lenders. “These platforms understand their customers’ pain points better than anyone,” Rafiza said. “We are building embedded finance solutions that solve real-world frictions—like simplifying loan decisions when buying a used car.” She noted that while there is no exclusivity between these platforms and KAF, the digital bank’s value lies in enabling seamless financing and banking experiences that traditional players cannot easily match, especially for customers without conventional income documentation. Technology and compliance by design As one of only two Shariah-compliant digital banks in the country, KAF Digital Bank’s core system had to be ready out-of-the-box to meet Islamic finance requirements. It chose the Temenos software-as-a-service (SaaS) core banking platform hosted on Microsoft Azure—selected not just for its technical capability, but for its experience with Islamic banks in the Middle East and its modular architecture. “We did not want to spend months re-coding workflows to make them Shariah-compliant,” Rafiza explained. “Temenos came with a good understanding of Islamic banking and we worked closely with their Shariah advisory team, referencing Bank Negara’s guidelines.” The choice of a SaaS-based platform was also driven by speed and scalability. “We literally started with no staff and had two years to become operational. SaaS gave us the agility to stand up quickly without building everything from scratch,” she said. Despite speculation that KAF launched later than peers due to technical issues, Rafiza clarified that delays stemmed more from non-tech processes like compliance, risk governance and building operational readiness. She also underscored that rolling out real-time quick response (QR) payments—a crucial consumer expectation in Malaysia—required thorough testing and integration with domestic clearing platforms like PayNet, and with global partners like Visa, further lengthening timelines. From deposits to digital wealth While the bank started with savings accounts and domestic payments, these are only the beginning. Rafiza sees the deposit base as a prerequisite to offering broader services, including credit and investment products. “Before anyone can access other financial services, they need a savings account. And we need to ensure those accounts are secure and easy to use,” she noted. Looking ahead, KAF aims to offer digital takaful, micro-investment options, and financial literacy tools in collaboration with partners like Port, a local fintech. “We want to shift underserved segments from just borrowing to building wealth,” she said, pointing to concerns around retirement readiness and financial resilience among Malaysia’s lower-income population. “We saw during COVID how financially unprepared many were. We are focused not only on enabling credit, but also on growing assets and long-term financial health.” SME focus and ASEAN aspirations Small medium-sized enterprise (SME) services, particularly for microenterprises, are still in development. However, the intent is clear: to improve access for businesses that have been historically underserved by traditional banks. While the bank has not yet onboarded SME clients, Rafiza said this segment is a top priority. In parallel, the bank is keeping an eye on ASEAN’s regional payments integration, particularly cross-border initiatives backed by central banks. “We’re definitely looking at how to support intra-ASEAN payments for both retail and SME customers,” she confirmed. “But for now, our focus is to get domestic payments and experience right.” What’s next: July public launch and beyond The PERINTIS phase will culminate in a public launch currently targeted for July 2025. Rafiza remains cautious about overpromising timelines, as every product rollout must pass rigorous regulatory approvals. Still, the roadmap is in motion. The bank is already developing features beyond deposits—such as auto financing and micro-insurance—and preparing for the scale-up phase with its consortium partners as acquisition engines. “We want to show that Islamic digital banking can be both compliant and innovative,” Rafiza concluded. “For us, customer experience and financial inclusion go hand in hand.”
