Eighteen banking institutions have confirmed their participation in Phase 2 of the sandbox for the phased integration of MyDigital ID into Malaysia’s financial sector. This was revealed in the Ministry of Finance’s (MOF) parliamentary response to Aminolhuda Hassan (PH–Sri Gading) regarding the readiness of banks and financial service providers for the integration. It did not specifically name which banks are involved, however.
The ongoing programme focuses on testing MyDigital ID’s e-verification capabilities, which will be used to verify users’ identities when opening new accounts and carrying out secure, real-time banking transactions. MOF said the phased approach is necessary to ensure banks and financial service providers meet strict security, data protection, and audit requirements before full implementation.
The initiative is being implemented by the government through MyDigital ID Sdn Bhd and Bank Negara Malaysia (BNM), with an emphasis on security-by-design, privacy-preserving measures, and auditable governance. “The government, through BNM, must ensure all banks and financial service providers achieve a high level of readiness and security before the full integration of MyDigital ID can be implemented,” the ministry said.
According to MOF, 10 of the 18 participating banks are currently undergoing system integration, while two institutions have already completed the process. It also noted that 15 banking institutions took part in Phase 1, which concluded in June 2025. Of these, six successfully completed integration, while eight conducted electronic know-your-customer (e-KYC) testing as part of the evaluation process.
The Phase 2 sandbox is expected to conclude in March 2026. After which, the government will assess the outcomes before deciding on the timeline and scope for a wider implementation across the financial sector.
What Comes After?
Once banks have completed integration and met regulatory requirements, they may begin offering MyDigital ID as an option for customer verification, starting with selected services such as account opening and identity authentication for digital transactions. Adoption is expected to remain phased, with individual banks determining when and how to enable the feature based on their operational readiness.
For customers, MyDigital ID could streamline processes that currently rely on manual identity checks or repeated document submissions. This may translate into faster digital onboarding, reduced reliance on physical documents, and more consistent identity verification across participating banks. Existing verification methods are likely to remain available during the transition period.
(Source: The Edge Malaysia)
