As digital dependence becomes a post-pandemic imperative, nations pursuing socio-economic recovery and growth will increasingly leverage on the digital economy to derive gains in efficiency, agility, productivity, security and enhanced service quality.

The Digital Economy Report 2019 by the United Nations Conference on Trade and Development (UNCTAD) reveals that the size of the digital economy, depending on the definition, is estimated at around 4.5% to 15.5% of the global GDP (gross domestic product). According to the Department of Statistics, Malaysia’s digital economy is expected to contribute 20% to the economy by 2020 with e-commerce alone expected to exceed RM110 billion by this year, equivalent to 40% of the nation’s digital economy. 

At the same time, as the digital economy accelerates and 4IR (Fourth Industrial Revolution) technologies like artificial intelligence, robotics and the Internet of Things (IoT) proliferate and catalyse shifts in consumption, lifestyles and work spaces, there is a heightened need to ensure that all segments of society are able to participate and reap the benefits of this digital shift.

In a move to diversify and capture emerging digital opportunities, Axiata Group Berhad began its transformation over five years ago from a pure play mobile services company into a digitally focused business with interests in Digital Telco, Digital Businesses and Infrastructure. 

As part of this pivot, Axiata Digital arm was established in 2014 as Axiata’s digital services arm tasked with developing services and tools that could serve as building blocks for a future-ready society while enabling innovative companies to scale the global market.  

Digital financial services became a natural area of focus given its ability to narrow the financial inclusion gap amongst the underserved by providing easy access to a variety of fintech solutions.  Overall, a total investment of US$200 million was allocated for Axiata’s digital and internet ventures, including US$50 million channelled towards the fintech business with Axiata Digital. 

Over the years, Axiata Digital further extended its financial services pillar, starting with the introduction of the Boost e-wallet, which centred on consumer payments and Aspirasi, a digital financing services provider offering micro-financing and micro-insurance solutions to MSMEs (Micro, small and medium enterprises).

The launch of Boost in 2017 allowed Axiata to revolutionise the way consumers transact in an increasingly digital and mobile world with an ambition to become Malaysia’s preferred lifestyle e-wallet and lead the industry in user transaction volume and value as well as continuously changing user behaviour towards digital adoption. Boost not only brought cashless convenience to consumers’ fingertips by allowing them to pay for purchases via their mobile phone but it also made digital transactions a safe, fuss-free and rewarding experience. 

Boost has been innovating to stay ahead of the curve since the very beginning. In 2018 and 2019, Boost launched a series of e-wallet industry firsts such as cashback and user rewards, free money transfers, utility bill payments with partners such as Telekom Malaysia, Astro and Syabas, PTPTN, local council and insurance providers. It also rolled-out payment for on-street and gated parking, order roadside assistance and car maintenance services, booking and buying public transport rides on KLIA Ekspress, KTM intercity, EzCab, CatchThatBus and Firefly as well as cashless e-donations, integration with other payment partners like UnionPay QR and Samsung Pay, and Micro-financing and Micro-insurance for merchants.

Combining lifestyle needs and cutting-edge digital technology, Boost saw a fourfold growth of its active users’ weekly spend as of June 2020 since 2018. To date, 7.6 million Boost users now pay at over 185,000 merchant touchpoints nationwide.

Ever-evolving, Boost also helped consumers adapt to the challenges posed by the Movement Control Order (MCO), which began in March. Reacting swiftly, the platform introduced the #BoostGotYou campaign, which helped users fulfil some of their basic needs like managing utility bills and purchasing prepaid top-ups.

Boost also supported the frontliners and their families with Tabung COVID-19 and the 30 Hari 30 Amalan campaign during Ramadan. In total, over RM1 million was raised through e-donations during the period. Micro-loans and micro-insurance facilities were also offered to businesses for additional financial protection during these trying times.

To ensure it remains an indispensable tool for everyday life for today’s consumers, new solutions such as the in-app Zakat Fitrah and Zakat Harta payment facility for several states were introduced. To help the MSMEs community, Boost is also driving a Digitizing Merchant Programme which works well to supplement the PENJANA objective in uplifting the economy. 

Boost will also be helping merchants digitize and seamlessly move their operation from offline-to-online (O2O) by setting up an e-commerce catalogue integrated with Boost Business Payment Link, a contactless payment solution which serves as a simple way for merchants to collect payments by sending a URL payment link directly to their customers via email, SMS or WhatsApp. This provides merchants with the opportunity to innovate their existing business model and was especially useful throughout the MCO period when customers were becoming more accustomed to ordering online. 

Moving forward, Boost continued to innovate with new features to help both merchants and users. A larger wallet size with a higher limit of RM4,999 for Premium users as well as the Partner Wallet and BoostUP rewards programme which rewards users with instant cashback and exciting prizes.

Beyond payments, Boost is also extending its service offerings to include wider-reaching digital financial services. Just recently, together with sister company, Aspirasi, Boost introduced a low-cost micro-insurance solution for only RM1.50 for a 7-day insurance coverage with COVID-19 assist. 

Needless to say, a large part of Boost’s plans will be underpinned by continuous education as well as raising awareness on the benefits of going cashless. Fortunately, the Malaysian government is also very much in support of propelling a digital economy forward and creating a cashless society, as evidenced by Boost being selected by the Government as a partner in the rolling out of three of the PENJANA programmes – ePENJANA RM50 e-wallet stimulus, MSME digitalisation and Shop Malaysia Online.

In conjunction with the Shop Malaysia Online campaign, Boost is incentivizing users to spend and support local online businesses as part of a collective effort to rebuild and reboot the domestic economy with more savings, cashbacks and Boost Coins. Throughout Shop Malaysia Online campaign, customers will be able to enjoy up to RM100 in rewards. This campaign will also ride on Boost’s larger #KasiTambah campaign which brings a number of benefits to users.

Identifying that poor access to financing as a factor that hampers MSME growth in the country, Axiata launched digital financing services provider Aspirasi in 2019. Offering proper financial and protection support through micro-financing and micro-insurance solutions, Aspirasi simplifies access to finance via a fully digital process. 

All it takes is a quick three-minute fully online process, with limited collaterals for MSMEs to digitise themselves. Upon approval, the funds are deposited into their account within 48 hours. Aspirasi not only helps reduce the barriers for MSMEs to enter the digital economy but it also empowers them to grow their business, especially during the COVID-19 pandemic.

Recognising the impact caused by the health crisis, financing support was extended through the Axiata COVID-19 Assistance Program, and Aspirasi supports the program via Aspirasi Assist with Shariah-compliant micro-financing starting from RM1,000 up to RM20,000 with favourable terms. Aspirasi Assist disburses from an RM150 million fund with support from the Ministry of Finance. The programme also provides micro-insurance coverage as an add-on to help cover business owners in emergency situations with income, accidental death and financial assistance for COVID-19. 

Initially, the programme was offered to merchants within the Axiata ecosystem such as Boost, Celcom and Aspirasi merchants and its partners. However, to mitigate the impact of the virus on MSMEs in Malaysia, Aspirasi Assist was extended to businesses outside of the Axiata network as well, beginning on the first day of Ramadan. Since Aspirasi Assist’s roll-out, close to 5,000 MSMEs have been granted upwards of RM18 million in micro-financing to help support their business aspirations during this challenging period.

On the micro-insurance side, Aspirasi offers affordable and bite-sized products underwritten by Great Eastern as part of its aim to narrow the protection gap in the country. Aspirasi works closely with sister companies Boost and Celcom to offer insurance coverage at a low price point. With Boost, Malaysians can purchase various micro-insurance products catered to their lifestyle from as low as RM6.25 via the app, and Celcom users can exclusively receive Aspirasi C-Protect, personal accident coverage at only RM1 a month. 

Looking towards the future, Aspirasi aims to further enhance its offerings with a full suite of digital financial services solutions for businesses, merchants, partners and consumers. This includes extending the product roadmap for MSMEs with additional solutions including remittance and wealth management solutions as well as multiple micro-insurance products.

As the economy is coaxed towards recovery in the new normal of contactless service and increased digitalisation, many will gravitate towards e-wallets as a preferred way to transact. Other forms of DFS, such as micro-financing and micro-insurance are likely to be sought by underserved segments of society struggling to stabilise against the effects of the pandemic-triggered economic fallout, but wanting to transact with trusted service providers.

Moves taken by Axiata Digital to build and enhance DFS offerings such as Boost and Aspirasi has today led to a sweet spot, enabling the creation of a robust DFS ecosystem to better serve the evolving needs of consumers and communities as the digital culture becomes pervasive.

That said, even as it meets with current demands, Axiata Digital will continue to leverage emerging technologies to develop distinct financial and insurance innovations in the future as part of its drive towards promoting digital and financial inclusion across all segments of society.