We’re almost halfway through 2017 and what an exciting year it has been for Fintech in Malaysia, there’s been rapid developments in this space over the course of these past 6 months. We thought it’d be appropriate to highlight some of the key developments in Malaysia during this exciting period of time. If you’d like to view the key happenings in 2016, feel free to check out our previous article
Fintech Malaysia -Regulatory/ Governmental Support
Recently, Bank Negara Malaysia launched a website where fintech firms can view all the relevant regulations, gain more understanding on the sandbox and also submit their fintech ideas as well.
On top of social media channels Bank Negara has also been seen actively participating in University Road shows, informal panel discussions and quarterly regulatory bootcamp to help fintech firms better understand the regulatory landscape in Malaysia.
En Aznan, the Chairman of the Fintech Enablement Group of Bank Negara Malaysia will also be speaking at the 9th BankTech Asia Conference which will be happening from the 5th – 6th July 2017.
In 2016 Securities Commission Malaysia in a landmark move approved a series of Equity Crowd Funding platform, the companies approved were FundedByMe (Alix Global), Ata Plus, Crowdonomic, Eureeca, pitchIN and Crowdplus. Alongside with that Securities Commission Malaysia also approved 6 Peer to Peer Financing Operators namely B2B FinPAL, Kapital, FundedByMe Malaysia, ManagePay Services, Modalku Ventures and Peoplender, which makes it the first in ASEAN countries to do so, putting it ahead of its more popular neighbour, Singapore.
In keeping with it’s progressive regulatory approach, in May 2017 Securities Commission Malaysia introduced the Digital Investment Management framework, setting out licensing and conduct requirements for the offering of automated discretionary portfolio management services to investors. Better known as Robo Advisory, this framework will enable access to a suite of wealth management product beyond the affluent and mass affluent market.
MDEC is the lead agency in driving the digital economy in Malaysia. As a government linked entity, its role is to build a vibrant digital economy and ensure that Malaysia plays a leading part in the global digital revolution. Fintech is amongst its identified core focus.
In March 2017, MDEC announced that they will be launching the FinTech Space, though details about the FinTech Space is still not widely available, industry sources say that its intention is to be an ecosystem and a launchpad for the fintech community. It is also reported that MDEC facilitated a $20 million investment from Life.Sreda with the aim of $50 million by the end of the year.
On a separate occasion, MDEC also launched the Malaysia Tech Entrepreneur Programme (MTEP) ,although not specifically geared at fintech, the start-up founders in the fintech space can no doubt benefit from this program. Under MTEP, entrepreneurs are entitled to the following benefits
- Corporate tax exemptions for the tech startups
- 1 to 5 years passes under the Malaysia Tech Entrepreneurs Programme for individuals who want to set up or expand their businesses into Malaysia
- Access to funding
- Coaching and mentorship
- Low cost of doing business
- High-speed broadband
- Stable business-friendly environment
- Freedom of ownership for foreign companies for investors
Fintech Malaysia- Which Banks Are Actively Working with Fintech?
We ran a survey across 70 financial institutions in ASEAN, with a big sample size coming from Malaysia and below are our findings:
Based on the survey the numbers certainly looks encouraging, let’s take a deep dive into what the respective banks have been doing in 2017. (For a run down in 2016, where we’ve covered which banks in Malaysia that are working with fintech partners namely, Maybank, RHB , CIMB and Ambank please read our previous article.
2017 featured a new contender throwing its hat into the ring, Hong Leong Bank officially kickstarted its HLB Launchpad in March 2017 and just recently closed for application. Under this programme Hong Leong Bank will select 5 startups based on the following core areas:
- Simplifying Banking Today
- Digitising Customer Journeys & Experience
- Re-Imagining Banking for tomorrow
The 5 start ups will then undergo a 3 months mentorship programme by the banks senior management and will also be entitled to a RM 25,000 allowance per startup. If the startup is able to meet Cradle’s criteria they may be considered for an equity investment up to RM 1,000,000.
Maybank continued with its 3rd edition of Maybank Fintech, in comparison to last year’s programme where it had specific solution areas this year’s Maybank Fintech seems to be broader in focus. The key criteria in 2017 is to look at “Go-to-market” partnership where both parties can leverage on each other to tap into an opportunity. It is interesting to note that this year they’ve also opened it up to Non-Fintech technology companies.
In addition to the Maybank Fintech programme they have also launched Maybank Sandbox, which they claim is the first regional collaborative sandbox. In this sandbox Maybank will provide, dummy banking data provisioned in a secure sandbox for analytics and simulation, real banking APIs and development tools to enable 3rd party collaboration.
Notable fintech partnerships forged by Maybank outside of these initiatives include Samsung Pay in late 2016 and the MOU between Maybank and Alipay signed in March to enable Alipay’s mobile wallet in Malaysia.
When news broke that CIMB Bank will be hiring Olivier Crespin to head its newly set-up standalone unit dubbed CIMB Fintech, it sent a shockwave amongst the fintech community, with many caught by surprised. Olivier was best known for for launching DigiBank, DBS’s mobile only bank in regions like India and Indonesia. According to the group, the CIMB Fintech is intended to be agile and the vision is for it to execute ideas that will redefine CIMB’s products and services. Olivier is scheduled to join CIMB in June, pending regulatory approval from Bank Negara Malaysia, I suspect we won’t hear much until then, but the next few months would certainly be interesting to observe to see if CIMB will shake things up in the market.
Similar with Maybank, CIMB has also forged partnership with SamsungPay and Alipay for the same purpose.
2017 is the year where we see even the historically more conservative players like Public Bank entering the fray of fintech. In March, Public Bank entered into partnership with iSentric to jointly develop and introduce a mobile payment solution to the Malaysian market. There are also partnership discussions ongoing with other fintech players within the space that’s not publicly announced. I suspect in late 2017 and early 2018 we’ll definitely see more announcements by Public Bank.
In early 2017, Ambank appointed Raja Teh Maimunah as the CEO of AmInvestment Bank, as mentioned in the earlier article, Raja Teh Maimunah has been knowned to be actively presenting keynotes within the fintech circuit and making public statements in regards to the importance of embracing fintech. Though at the time of writing, there’s been no significant activity from Ambank with regards to fintech.
Fintech Malaysia: What Are The Opportunities?
FinMatch is a dedicated fintech session happening during the 9th BankTech Asia Conference. This session is designed to connect fintech start-ups with banks, VCs and regulators through a series of fireside chats. It’ll be an intimate closed-door session where leading banks and VCs will share what they’re looking for and regulators will share their views.
To register for this session click here https://www.banktechasia.com/finmatch-2017/. Tickets are going for 100 USD per participant.
Powered by Matchi, we’re launching the Fin5ive challenge and we’ll be scanning the globe for the top 5 fintech innovations in the market. Winners of this challenge will be given time to demo to an audience of 200 bankers at our 9th BankTech Asia Conference and will be given space to showcase their innovation at our exhibition for free. This will be a good opportunity to connect with some of the banks mentioned above and more.
Update: (The competition is now closed for application join us in 2018!)
About the Author
Vincent Fong is the General Manager of Knowledge Group and a self-proclaimed pundit of banking technology and fintech