Jan 31
Hong Seng Aims To Empower A Digital Nation
Through the acquisition of leading ID assurance group in the digital industry
KUALA LUMPUR, 31 January 2023 — Hong Seng Consolidated Berhad (“Hong Seng” or “the Group”) today announced that the Group aims to empower Malaysia into a digital nation through the acquisition of 51% equity interest in Innov8tif Holdings Sdn Bhd (“Innov8tif Holdings”) which currently owns Innov8tif Solutions Sdn Bhd (“Innov8tif Solutions”) and Xendity Sdn Bhd (“Xendity”) (“collectively referred as Innovative Holdings Group”) for a total consideration of RM30.855 million.
Innov8tif Holdings Group is principally involved in the digital onboarding and identity verification (“IDV”) related services and businesses specialising in IDV technology to support e-KYC and anti-fraud processes, customer onboarding process automation, and mobile biometric authentication solutions with presence in Malaysia, Singapore, Indonesia, Thailand, Philippines and Cambodia. Key customer segments served by Innov8tif Holdings Group are telecommunication, banking, financial services, insurance, investment firms, and government.
“It is a synergistic move to bring both Innov8tif Solutions Group and Xendity together. Previously, each had its own operations and customer base servicing different industries in a parallel manner. However, Innovative Holdings has now combined and enhanced the capabilities, resources and experience of both companies which will boost the research and developments (“R&D”) of the service offerings with the support from our strategic partners.
Ultimately, the advancement in R&D will enable Innov8tif Holdings to roll out a universal digital suite or e-Nation suite to be known as Digital Nationwide Access (“DNA”) solutions which is capable of empowering a digitalised Malaysia just like any other developed countries. DNA solutions which are applicable across industries will facilitate a seamless digital ID conversion and verification by linking public and private sectors together towards a digitalised nation. With DNA in place, all validation processes across agencies and departments such as Jabatan Pendaftaran Negara (“JPN”), Jabatan Imigresen Malaysia (“IMI”), Bank Negara, digital banks, Suruhanjaya Syarikat Malaysia (“SSM”) and other services will be eased since it will be all streamlined. This is in line with the MyDIGITAL initiative that reflects the government’s aspiration to transform Malaysia into a high-income nation that is focused on digitalisation and is a regional pioneer in digital economy,” highlighted Lester Chin, Executive Director of Hong Seng.
The recent MyDigital Progress Report 2021 highlighted that Malaysia is on course to achieve a digital economy contribution to gross domestic product (GDP) of at least 25.5 percent by 2025. The report added that the digital market in Malaysia grew by 47% to US$21 billion (RM87.8 billion) from US$14 billion (RM58.5 billion) previously, driven by the growth in e-commerce in 2021.
Meanwhile, the global IDV market was valued at USD 8.41 billion in 2021 and is expected to reach USD 26.34 billion by 2029, registering a CAGR of 15.34% during the forecast period of 2022–2029 according to a report by Data Bridge Market Research. Besides that, the United Nations also recognise the power and promise of digital identity, which is why it has set a goal of universal legal identity by 2030. The prospect of equity on a global level is astounding, and the latest estimates project that 6.5 billion people will be using digital IDs by 2026.
Lester also highlighted an example wherein DNA empowers foreign investments where we can leverage electronic services to ease remittance which enables the FDI business setups by digitally performing all preliminary processes in their home country through the eKYC technology such as opening a bank account, incorporating a company under SSM, applying for expatriates’ passes or workers and etc. As the nation’s digital enabler, Hong Seng hopes to help our country recover and attract more foreign investments by easing processes.
At the recent World Economic Forum (WEF) in Davos, Switzerland, our Minister of International Trade and Industry, YB Senator Tengku Datuk Seri Utama Zafrul bin Tengku Abdul Aziz outlined an agenda to position Malaysia as a strategic country and a quality investment destination with the credibility to also act as a gateway to Southeast Asia.
Following the government’s aim in making Malaysia to be Southeast Asia’s investment hub, Lester added that Hong Seng has had consultation sessions with the relevant government departments on the implementation of a universal digital suite and the feedback so far has been positive. Therefore, the Group will present its full-fledged proposal to the Malaysian Government once it has synergised the businesses of Innov8tif Holdings and Xendity. After roll out, DNA can also be easily replicated in other countries and jurisdictions through partnerships in current overseas jurisdictions Innov8tif and Xendity are already in.
“In view of the prospects and positive outlook of the digital IDV sector driven by the pandemic and the correlated increase in online transactions and digital lifestyles resulting in the booming demand of IDV in a wide range of industries towards digitalisation, Hong Seng believes that the venture into the digital industry is timely and it is expected contribute positively to the business prospects of the Hong Seng by incorporating a fresh income stream from a promising sector,” he said.
“In view of the prospects and positive outlook of the digital IDV sector driven by the pandemic and the correlated increase in online transactions and digital lifestyles resulting in the booming demand of IDV in a wide range of industries towards digitalisation, Hong Seng believes that the venture into the digital industry is timely and it is expected contribute positively to the business prospects of the Hong Seng by incorporating a fresh income stream from a promising sector,” he said.
