Fintech in Malaysia - What the Experts Say
Fintech was a barely understood sector in Malaysia before mid-2015. Since then, Malaysia has confirmed the growth of fintech by encouraging and gathering major market players under regulatory umbrellas
Fintech is starting to be an integral component of financial institutions, as well as for consumers worldwide. The term fintech has become an important and commonly used idea in Malaysia, referring to organisations that provide or encourage monetary services through technological development.
In fact, fintech was a barely understood sector in Malaysia before mid-2015. Since then, Malaysia has confirmed the growth of fintech by encouraging and gathering
- Business people
- Public organisations
under the guise of FinTech adoption throughout financial activities.
Securities Commission Malaysia, in a historic move, affirmed the instigation of Equity Crowd Funding Platforms in 2016 and FundedByMe (Alix Global), Ata Plus, Crowdonomic, Eureeca, pitchIN, and Crowdplus were the companies that gained approval from the Commission.
Where the Future is Heading
Alvin Gan, executive director of KPMG Management Consulting in Malaysia has said, “The introduction of robotic process automation (RPA) and chatbots, for example, had enabled greater productivity hence allowing financial institutions to address more complex customer needs.
“Many also recognise that is AI becoming a pivotal technology behind fintech innovation, presenting massive opportunities to be the first mover in causing a shift in customer expectations by being able to know what their customers need, even before they know it themselves"
The head of strategic digital alliances at Maybank, Jasmine Ng stated that the trends of advancement in technology, fintechs and Banking institutions are bringing about greater demand to furnish to embryonic segments of the Malaysian market.
A Malaysian internet penetration rate of seventy nine percent remains the highest in South East Asia, as noted by the Asian Banking & Finance Retail Banking Forum in Kuala Lumpur. It indicates the attractiveness of the digital market in the country that can be capitalised on by both local and foreign digital giants.
In fact, Joanne Tan, digital Innovation Lead at Allianz Bank, foresees the potential market of fintech in Malaysia; it’ll be more exciting as financial institutions are engaging and adopting actively. Says Joanne, “Some of the financial institutions have already begun redefining business strategies in order to flourish in the digital revolution. Financial institutions are developing a keen affinity to acquiring and adopting new technologies and capabilities.”
Significantly, financial institutions are improving kinship over acquiring and adopting advanced and potential technologies in order to deliver products and services to mitigate ever-changing demands of consumers.
However, Kristine Ng, CEO of Fundaztic, has said that, “Fintech in Malaysia is perhaps now a toddler. We are growing real fast and as ‘terrible twos’ are, we need to ensure that we continue to grow with proper controls and discipline”. She also has said that she thinks with the right support from policy makers and regulators through control and discipline, fintech will able to maintain the fast growth and adoption rates in Malaysia.
As it is observed that Fintech has already been taken on in a large portion of businesses, especially in financial institutions. It elucidates that fintech is established; developed and with potential, which are all noted as important factors in the expansion of emerging markets.
There are many new fintech companies being formed and extending into different markets. The Central Bank of Malaysia has introduced new regulations and licenses for fintech which indicate the establishment of solid foundations and the beginnings of sustainable markets in Malaysia.
The future of the Malaysia market is looking bright. With the recent announcement of three licenses for Digital Asset Exchanges (DAX) by the Securities Commission there is a clear marker that the regulator are ready to support sensible steps to develop fintech.