Backbase, the global leader in AI-powered banking technology, has announced that Bank Muamalat has officially launched Atlas, which it claims to be Malaysia’s first Islamic digital-only bank.

The platform aligns with customers’ faith and lifestyle preferences and is powered by Backbase’s AI-driven banking technology.

This initiative reflects Bank Muamalat’s digital transformation strategy to meet the growing demand for faith-based financial solutions.

Future enhancements for Atlas include digital debit and credit cards, flexible personal financing, and a Shariah-compliant gold investment account.

Atlas features a rewards program offering exclusive lifestyle deals in partnership with various organizations.

The platform’s development was supported by Backbase’s modular technology, which allowed Bank Muamalat to modernize its banking infrastructure.

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🔗 Source: Bank Muamalat

🧠 Food for thought

1️⃣ Malaysia’s evolution from Islamic banking pioneer to digital innovation hub

The launch of ATLAS represents the latest chapter in Malaysia’s 60-year journey as an Islamic finance pioneer, not a sudden development.

Malaysia’s Islamic banking foundations date back to 1963 when it established Perbadanan Wang Simpanan Bakal-Bakal Haji to help Muslims save for Hajj, followed by the country’s first full Islamic bank in 19831.

This systematic development has positioned Malaysia as the world’s third-largest Islamic finance market behind only Saudi Arabia and Iran, with Islamic banking now constituting 25% of Malaysia’s banking sector2.

The country dominates the global sukuk (Islamic bonds) market with a 54% share and has built comprehensive institutional support, including regulatory frameworks and educational centers like INCEIF, the first university dedicated to Islamic finance2.

ATLAS leverages this established ecosystem while adapting to evolving consumer preferences, with a Deloitte survey showing 78% of consumers now prefer digital banking channels over traditional ones3.

2️⃣ Digital banks in Malaysia balance innovation with regulatory safeguards

ATLAS enters a carefully structured digital banking landscape where Bank Negara Malaysia has implemented a measured approach to digital bank licensing.

Malaysia has approved just five digital banking licenses, with each institution targeting specific market segments – ATLAS focusing on faith-aligned banking, while others like Boost Bank target underserved communities and SMEs4.

Digital banks in Malaysia operate under a foundational phase with strict regulatory limits including asset caps, ensuring operational stability before full-scale operations4.

This regulatory framework reflects Malaysia’s emphasis on financial inclusion and innovation while maintaining consumer protection and financial stability, creating a controlled environment for banks like ATLAS to innovate4.

The digital banking sector is anticipated to see significant growth, with projected net interest income reaching US$2.89 billion by 2029, demonstrating the substantial market potential despite initial regulatory guardrails5.

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