How Financial Technology Companies (Fintech) can Complement Bank Services, Products

By Imee Charlee C. DelavinReporter Business World Philippines

FINANCIAL TECHNOLOGY (FinTech) firms are seen to complement the products and services offered by banks, providing growth areas for lenders to expand market reach and tap the unbanked sector.


FinTech companies were earlier seen to play an increasingly important role in the financial services industry — gaining substantial scale from accessing large unbanked sectors — with the emergence of tech-savvy classes providing the growth areas.

Malik Khan Kotadia, Global Banking Group senior vice president, said FinTechs will allow lenders to adapt to the changing financial environment at a much faster pace noting how banks have been adapting “but the change is very slow and very incremental.”“Things have changed around us … banking environment has been changing too. We see banks moving, but moving slow. With the growth in mobile penetration, FinTech becomes an enabler [for the banks] to help expand and attract other markets, tapping into other segments that banks would otherwise have difficulty [going after],” Mr. Kotadia said in a presentation at the BankTechAsia 2016 Manila series on retail banking technologies in Makati on Tuesday.

In the Philippines, he noted FinTech companies and banks could work hand in hand through partnerships and collaborations where “it makes sense.”Smartphone penetration in the country stood at 34% and is growing fast with a push towards mass market adoption of mobile internet.Studies conducted by the global public-private group Better Than Cash Alliance said that Filipinos make about 2.5 billion payment transactions per month worth $74 billion, but only 1% of these is transacted electronically and 99% of the transactions are paid either in cash or checks.

247_7756Mark B. Perez, retail banking head for Metropolitan Bank & Trust Co. (Metrobank) shared the same view, saying FinTechs are “allies rather than threats” to the banks.“I generally think there are a lot of opportunities for FinTechs and banks to work together. While there are spaces where the FinTech companies seem to be better than banks, at the very core of the banking systems are the banks, so banks have the capability to drive the use of [FinTech],” Mr. Perez said.“FinTech provides us with something to learn from. You have to look at it like partnerships — e-commerce is to retail stores and FinTech is to banks … eventually there will be stand alone banks, banks with FinTech components and FinTech firms alone. Its the natural progression of technology. That’s the way to go.”

Debt watcher Fitch Rating had said FinTech firms could potentially change the banking status quo and possibly disrupt the financial sector, with risks where banks and regulators have limited experience in managing new technologies.

Nonetheless, FinTech remains a “nascent sector” despite rapid growth in large markets with peer-to-peer (P2P) lending, online payment systems and digital wallets focused on retail consumers.

“The rise of FinTech could raise risks to traditional banks which fail to transform over the long term. The rapid adoption of disruptive tech could raise security and operational vulnerabilities for banks if systems and resources to manage the new technologies are not enhanced … New technologies could also alter banks’ business and operating models in the long term by eroding a previously lucrative business line or reliable funding source, and thus indirectly affect credit profiles as well,” it added.

WED_9491Lito M. Villanueva, Voyager vice president and head of Fintech, Digital Inclusion and Alliances, said during the same event that “FinTech is not about disrupting banks.”
“It is about enabling partners to promote cost and service efficiencies, engaging regulators on emerging digital landscape and empowering consumers via frictionless experience leveraging on the ubiquity of mobile,” Mr. Villanueva said.In particular, he noted that FinTech acts as enabler — in emerging markets like the Philippines — with banks still at the core of operations.“Banks, just like all big institutions, needs to adapt to and ride the digital tsunami, lest they become irrelevant. Digital partnerships will pave the way for reducing capex (capital expenditures) and achieving ever greater cost efficiencies,” he added.Mr. Villanueva noted that digitization can enhance the banking system’s return on assets by 0.3% to 0.4% which can translate into potential reduction of interest rates for borrowers by 1-1.5%.Smartphones, he noted, will start driving bank growth as it becomes the primary banking channel by 2017. In his presentation, the Voyager executive said 37% of cities and municipalities are without any banking presence; and it takes an average of 21 minutes to reach the nearest financial access point. The 16,316 automated teller machines (ATM) around the country also brings the ratio of ATM to people at 2:10,000 nationwide.
WED_9636For his part, Randolph Montessa, Land Bank of the Philippines first vice president and head of the card and e-banking group, said technology is the greatest enabler that will allow banks to service the unbanked sectors of the society and promote financial inclusion.“Banks should leverage on technology to enable full financial inclusion,” he said.

BSP Governor Amando M. Tetangco, Jr., earlier said shifting to an electronics-based payment system should help promote financial stability and inclusion in the country.

This article was also featured on print

How Philippines’ banking will look like in 2020

By Elyssa Christine Lopez |Entrepreneur Philippines | May 25, 2016


GOING DIGITAL.  BSP Core Information Technology Specialist Group Bank Officer V Anna Racines said the proposed NRPS framework would hopefully eradicate consumers’ initial hesitation to use digital banking. Photo by Elyssa Lopez / Entrepreneur Philippines

With the onslaught of Bitcoin and online shopping, banking and financial institutions are forced to keep up as the consumers’ habits rapidly change with the times.Bangko Sentral ng Pilipinas (BSP) is not turning a blind eye on these realities, in fact, they aspire that 20% of payments in the country will be done digitally by 2020.“A World Bank study actually showed that economies with great volume of electronic payments tend to have higher level of per capita income,” BSP Core Information Technology Specialist Group Bank Officer V Anna Racines said in her talk at the 8th BankTech Asia on Tuesday, May 24.

But the road to digital adaption will not be smooth ride, as a study of Better than Cash Alliance in 2015 revealed that out of all payment transactions done in the Philippines, only 1% are considered digital.


National Retail Payment System

So BSP proposed the National Retail Payment System (NRPS) framework to the industry that will, hopefully, convene financial institutions, banks, and other government agencies to embrace the digital solutions available and craft innovations for better services to the public. “The NRPS framework are high-level principles that would be followed by the financial institutions who wish to participate. This would hopefully enable interoperability between them with the assurance of safety and affordability for consumers,” Racines said.

Under the initiative, the electronic credit transfer scheme may be possible, which will enable any individual or business with an account in any financial institution to transfer funds and/or make payments to any other account within the framework. Once it pushes through, the retail payment system will hopefully clear consumers’ initial hesitation to keep their money in digital form for security purposes or impending inconvenience as its use is still limited.

BSP has been conducting studies since 2013 but only laid out the framework in December last year. Racines is positive the initiative will move forward even with the changing administration as President-elect Rodrigo Duterte also echoes what the central bank aspires for: a transparent and better banking service.

“I think President-elect Duterte will be supportive of this plan because he has previously stated he aims for transparency and what we’re doing are in accordance to his policies,” Racines told on the sidelines of the event. The passing into law of the formation of the Department of Information and Communications Technology is also good news for the central bank as this meant better government support of their initiatives.

Racines said they are still in talks with other government agencies like the Commission on Audit (COA) and Department of Finance (DOF) as they review on the present regulations and policies that could be impeding the NRPS to push through.“Although we already have the e-commerce law, there are still some policies that need to be reviewed. Like the COA mandates a physical receipt for some transactions,” Racines said.

TRAILBLAZING. FIN:TQ President and CEO Lito Villanueva said smartphones will be the leading banking chnnael by 2017 as more financial institutions adapt financial technologies. Photo by Elyssa Lopez / Entrepreneur Philippines

Emerging Filipino fintech

For the private sector, this has long been part of their plan even before the government took notice.In the first quarter report of PLDT Inc., the company highlighted their financial technologies’ triumphs, albeit small in scale today, and emphasized how the sector could be one of its revenue drivers in the future as part of their 3-year digitalization.

“Unlike what most believe, FinTech is an enabler not a disruptor for financial institutions. It will provide the gap for institutions to become competitive,” FIN:TQ President and CEO Lito Villanueva said in his talk at the 8th BankTech Asia. FinTech or financial technology is an economic industry composed of companies that use technology to make financial services more efficient.

Contrary to the public notion that FinTech is exclusive to millennials, Villanueva said a study showed 45% who use the technology are from Gen X. In fact, one of the emerging businesses in the sector is digital lending, which can still reach new markets especially in far flung, rural areas.

“In the Philippines, 21% of those who applied [for loans] came from third to sixth class municipalities or areas without brick and mortar banks. So banks, instead of building new branches, can actually just build better digital platforms to reach customers,” Villanueva added. The FIN:TQ executive said by 2017, smartphones will be the primary channel of banking, as most transactions would be done in a click.

“We have to make sure the solutions we will push to consumers are systemic, catalytic, transformational, and trailblazing for banks to stay relevant,” Villanueva said.


Which 3 Malaysian Banks are Working with Fintech Companies?

These days if you are within the financial services industry ecosystem, the biggest challenge of your day is to have an entire day go by without hearing the term

“Fintech is going to eat banks for lunch” – Everybody

(Though it’s highly recommended that you do not eat banks for lunch as it is neither nutritious nor delicious)

While I agree that fintech is really reshaping the financial landscape and will bring forth wonderful innovations in the years to come, I am curious if banks (or dinosaurs, as the industry so fondly refers to them as) will be pushed to the brink of extinction, like actual dinosaurs. It’s true, a large chunk of the bank’s profits are at risk but are banks taking a nice long afternoon nap while fintech slowly munches on their lunch?

Let’s explore some examples of Malaysian banks actively working with Fintech

cimb bank 2

CIMB bank is Malaysia’s second largest bank with 7.5 million customers in Malaysia alone. The group employs over 40,000 employees across the ASEAN region.In May 2015, CIMB launched their incubation programme known as Innochallenge. It is aimed at the ideation and creation of new fintech solutions. In this programme both CIMB and the Multimedia Development Corporation (MDeC) actively mentored the fintech startups.

They have picked 4 winners from that pool of fintech startups and they are developing the bank’s digital and mobile banking solutions. Logically, CIMB will also be hosting the 2016 session and it will focus on the following areas

  • Loyalty & Rewards
  • Identity, Security & Document Management using blockchain
  • Remittances
  • Mobile Payments
  • P2P
  • Digital Wallets

“One of the main reasons why we are tying up with Startupbootcamp FinTech is because CIMB has always been focused on technology.”

-CIMB group chief executive officer Zafrul Aziz.

On top of their Innochallenge, CIMB bank worked with Startupbootcamp in 2015 to mentor the fintech startups in Singapore. The main purpose of this partnership is to scout for, and evaluate, new technology and ideas for the future. It’s curious as to why CIMB chose Singapore instead of its home base- Malaysia, but upon further inspection you’ll find that it is likely because Startupbootcamp announced an exclusive partnership with RHB Bank (which we’ll talk more about shortly)


RHB Bank


RHB Bank is the 4th largest bank in Malaysia with a network of 210 branches in Malaysia and 19 across 9 asian countries. As mentioned in the earlier part of the article, RHB is the exclusive partner for Startupbootcamp within Malaysia’s fintech space. Their announcement of partnership came one month earlier than CIMB

RHB aims to bring digital innovations to the banking market in Malaysia through this partnership. In this partnership RHB will evaluate, fund, mentor and also organise hackathons in Kuala Lumpur. The group will also be spending 20% of their capex this year to execute new digital strategies.

“Our customers can expect to see the integration of seamless and innovative digital solutions from some of the best global and regional fintech companies.”

-Khairussaleh Ramli, RHB group Managing Director



Last but not least, Maybank is the largest bank in Malaysia servicing over 22 million customers.

In 2015 Maybank organised the Maybank Fintech 2015 in partnership with local VC firm L337 Ventures and over 100 technology companies from 10 countries took part in the event. In 2016 Maybank will target at least 200 companies to take part in the initiative.

Maybank sees MaybankFintech as a tremendous opportunity for Maybank to harness the startups ecosystem regionally, to acquire the best innovation ideas in financial technology.

Their focus for this year will be in the area of;

  • Mobile Banking
  • Payments
  • Lending
  • Distributed Database (Blockchain)
  • Asset Management
  • Humanising Financial Services (Financial Inclusion)
  • Security
  • IOT
  • Islamic Finance
  • Big Data


“Our Maybank Fintech programme is a unique platform for aspiring innovators to showcase their ideas. We want to be a central member of the Fintech community in the region, to help grow and support entrepreneurs, by providing them with an avenue to connect directly with the financial industry.”

– Micheal Foong, Group Chief Strategy Officer, Maybank

Several years back many of us in the industry were debating whether banks will fight these disruptive companies head on with better technology or steer towards collaborating with them. Recent news seem to indicate that banks are leaning towards working with them.

So what do you think fintech is eating the banks for lunch or is the bank buying lunch for fintech?

Let me know in the comments below

Quick Plug: Interested to find out more the fintech scene in Malaysia? Join us for our 8th BankTech Asia Conference & Exhibition in November 2016


About the Author

Vincent Fong is the General Manager of Knowledge Group and a self-proclaimed pundit of banking technology and fintech

The Emergence of Fintech: Where Does Malaysia Stand?


Fintech is a space that we’ve been operating in for the past eight years and a space we have observed for an even longer time. It is truly an exciting space to be in at this day and age. Years ago, subjects related to fintech and banking technology were highly esoteric.

Speak to anyone outside the industry about the subject and you’ll be met with blank stares. However that is not the case today. Fintech has become such a topic of interest and this is driven largely due to demands from consumers for faster, cheaper and more efficient banking services. A quick look at google trends tells a very poignant story on how fintech is quickly becoming a big part of many people’s lives from providing banking access to marginalized societies, to creating more efficient payment ecosystems for commerce.


Google Trends 1

Google Trends

To me is the best thing that can happen to the industry. Having consumers who are savvier and more demanding of better services will serve as the biggest drivers to the evolution of the industry for years to come. In this article, i’ll explore the fintech space within the context of Malaysia from the perspectives of regulators, banks and fintech companies.


BNM building

Though Tan Sri Zeti Akhtar Aziz has been largely silent on the subject of fintech, her succesor Dato’ Muhammad Bin Ibrahim who was appointed in April 2016 has been extremely vocal and proactive in the space of fintech.

In his maiden speech, Dato’ Muhammad Bin Ibrahim in the month of May at GIFF 5.0 said “Fintech is challenging the status quo of the financial industry. New business models will emerge. Delivery channels will challenge existing norms. Transaction costs will be reduced. Rather than looking at the fintech revolution as unwelcoming, financial institutions ought to embrace it as an opportunity”.

In that very same speech he also mentioned that 10% to 40% of overall banking revenues could be at risk by 2025 due to financial technology or fintech innovations. Having recognized the potential and risks of the sector, Dato’ Muhammad Bin Ibrahim is quick to act and in less than a month of being appointed as the Governor he announced that a regulatory framework for fintech will be ready by July 2016. The reason for the timeframe, he mentioned is so that banking institutions will have time to comment on it.

In the month of June, Bank Negara Malaysia established the Financial Technology Enabler Group (FTEG) which is a cross functional group that will serve as the focal contact point on fintech related queries, which includes matters related to regulation and the adoption of fintech by the FSI sector. This group will be headed by Aznan Abdul Aziz who is currently the director of Bank Negara Malaysia’s Financial Sector Development Department.

As for the month of July, Bank Negara Malaysia has issues a discussion paper on the regulatory framework, while I do have contention with several points within the framework, this is definitely a healthy direction from our regulators. Perhaps, we’ll share our views on that in the next article.

As Malaysians, we have the tendency of comparing how we are faring with our neighbours down south. Let’s explore how we’re doing in comparison with Singapore. The country has one whole year of a head start, having appointed Sopnendu Mohanty as the Chief Fintech Officer under the Monetary Authority of Singapore. There are several interesting developments that are coming out of Singapore that can be considered by Malaysian regulators:

  1. Regulatory Sandbox
  • MAS has proposed for a regulatory sandbox. The regulatory sandbox approach is where innovations can be placed in a “sandbox” and offered to a small test group of customers or trialed over a 6 months period to limit the consequences of failure, in doing so ensuring the stability of the financial system and at the same time enabling innovation.
  1. Bilateral Partnerships
    • Singapore has signed an agreement with Australia to boost fintech trade. In this agreement fintech firms from both countries will be able to establish initial discussions in each other’s market faster and receive advice on required licenses, helping to reduce regulatory uncertainty and potentially, time to market.
    • In the same month Singapore has also inked a similar deal with the Korean Government.
  1. Open API’s ( Application Programming Interface)
    • The Monetary Authority of Singapore as a sign of leadership has mapped out a plan to make its data available through Open API’s. Following that initiative, OCBC bank became the first bank in the region to launch an Open API initiative. At the time of the announcement, OCBC Bank’s developer portal, Connect2OCBC, will be providing free access to four open-source APIs: The branch locator, ATM locator, smart card advisor and foreign exchange APIs. The implications of an Open API is far reaching and will massively foster collaborations between fintech and banks.


While it may seem that the regulators in Singapore are several steps ahead of Malaysia in the fintech space, I for one am quite hopeful. Under the stewardship of Dato Muhammad Bin Ibrahim, Bank Negara Malaysia has been a lot more progressive when it comes to matters related to fintech. In the short few months that he has been Governor we are seeing at least one announcement per month related to the development of the sector.

These are exciting times indeed, what direction will Bank Negara Malaysia take? Will they appoint Aznan as a Chief Fintech Officer like Monetary Authority of Singapore did with Sopnendu? Will we also move towards open API’s? Will Bank Negara Malaysia host a Fintech Festival like Indonesia and Singapore?



In the earlier part of the article we have quoted Dato’ Muhammad bin Ibrahim saying that 10%-40% of banking revenue could be at risk by 2025. With that much at stake, how are the banks responding to this new threat? We’ve highlighted the activities by the banks in our previous article, in this we feel it’d be appropriate to highlight them again and add in some updates to provide some cotext

Are they actively gearing up for the battle to come, are they embracing fintech into their ecosystem or are they disregarding fintech as a hype?

Let’s explore.


Being the largest bank in Malaysia, it is no surprise that Maybank is amongst the first few banks embracing fintech. Historically Maybank has always been quick to adopt new technology as evidenced by the fact that several years back Maybank was one of the first to implement online banking.

In 2015 Maybank organised the Maybank Fintech 2015 in partnership with local VC firm L337 Ventures and over 100 technology companies from 10 countries took part in the event. In 2016 Maybank will target at least 200 companies to take part in the initiative.

Maybank sees Maybank Fintech as a tremendous opportunity for themselves to harness the startups ecosystem regionally, to acquire the best innovation ideas in financial technology.

Their focus for this year will be in the areas of:

  • Mobile BankingMaybank
  • Payments
  • Lending
  • Distributed Database (Blockchain)
  • Asset Management
  • Humanising Financial Services (Financial Inclusion)
  • Security
  • IOT
  • Islamic Finance
  • Big Data

“Our Maybank Fintech programme is a unique platform for aspiring innovators to showcase their ideas. We want to be a central member of the Fintech community in the region, to help grow and support entrepreneurs, by providing them with an avenue to connect directly with the financial industry.”

– Micheal Foong, Group Chief Strategy Officer, Maybank


cimb bank 2With 7.5 million customers in Malaysia alone and over 40,000 employees across the ASEAN region, CIMB bank is Malaysia’s second largest bank. CIMB launched their incubation programme known as Innochallenge in May 2015. The goal is the ideation and creation of new fintech solutions. In this programme, both CIMB and the Malaysia Digital Economy Corporation (MDeC) actively mentored the fintech startups.

They have picked 4 winners from that pool of fintech startups and they are currently developing the bank’s digital and mobile banking solutions. Logically, CIMB will also be hosting the 2016 session and it will focus on the following areas:

  • Loyalty & Rewards
  • Identity, Security & Document Management using blockchain
  • Remittances
  • Mobile Payments
  • P2P
  • Digital Wallets

CIMB bank worked with Startupbootcamp in 2015 to mentor the fintech startups in Singapore on top of their Innochallenge. This partnership’s main reason is to scout for, and evaluate, new technology and ideas for the future.

“One of the main reasons why we are tying up with Startupbootcamp FinTech is because CIMB has always been focused on technology.” -CIMB Group Chief Executive Officer, Zafrul Aziz.


With a network of 210 branches in Malaysia and 19 across nine Asian countries, RHB Bank is the 4th largest bank in Malaysia.

Through this partnership, RHB aims to bring digital innovations to the banking market in Malaysia. Here, RHB will evaluate, fund, mentor and also organise hackathons in Kuala Lumpur. Other than just working with fintech, the group will also be spending 20% of their capex this year to execute new digital strategies.

“Our customers can expect to see the integration of seamless and innovative digital solutions from some of the best global and regional fintech companies.” -Khairussaleh Ramli, RHB Group Managing Director


AmBank_Malaysia_featAmbank is among the top-tier banks in Malaysia, employing over 12,000 employees with a network of 175 branches. Ambank is the latest bank in Malaysia to throw their hat in the ring. The Group CEO Datuk Sulaiman Mohd Tahir was quoted saying that the inclusion of fintech towards better mobile banking, cash management and understanding customer behaviour is now becoming very important to the bank.

Datuk Sulaiman also mentioned that their approach towards fintech will be through the banks current partner and shareholder ANZ. The plan to embrace fintech is reported to be ready in six months.

While it is encouraging to see banks taking an active step with accelerator programmes, there has been no major announcement related to tangible results or solutions coming out of these exercises. One can only speculate that perhaps these banks are waiting for the regulatory framework to be released in July 2016 or that the products are simply not market ready.

It is interesting to also note that out of the five top banks in Malaysia only Public Bank and Hong Leong Bank has not made any major announcements about their fintech play. Though, Raja Teh Maimunah who is the CEO of Hong Leong Islamic and the COO of Digital Innovation and Transactional Banking has been seen actively presenting keynotes within the fintech circuit. Therefore, it is not unlikely that the bank would be influenced by her vision of fintech and make an announcement in the months to come.

Whereas Public Bank’s playbook still remains unknown, the industry is skeptical if there will be any major moves from the bank, which is understandable as Public Bank has always been the more conservative player when it comes to technology despite being the most profitable bank in Malaysia.

At the time of writing, only four banks have made announcements of the fintech play. The next few months will be an interesting one to observe to see who else will join the fray.

Fintech Players

Accordingly Statista, the transaction value of fintech for 2016 stands at 6265.2 Million USD. While the market size is still relatively small compared to markets from different parts of the world, there are several promising players emerging from the local market. Having done an extensive research on the startups, I have narrowed it down to 3 companies and interviewed them to get some perspectives.


Neuroware is one of the few if not the only fintech player who operates within the blockchain space in Malaysia and perhaps also the first company to provide public blockchain API’s and developer toolkits in Asia. Their team has been actively speaking at conferences and conducting briefings to regulators, governmental agencies and banks, to help them understand the blockchain technology. At their most recent speaking engagement at BankTech Asia Manila, their speech captured the imagination of the bankers on the possibilities blockchain technology. Another interesting thing about Neuroware is the fact that they are the only Malaysian company to graduate out of the infamous “500 startups” in Mountain View.

When asked what sets them apart, Ruben Tan the CTO of Neuroware answered,


Ruben Tan, in action at BankTech Asia Manila

“We’re a company dedicated to blockchain-agnostic solutions. This means our products are designed from ground up to work with different blockchains, and our goal is to make sure new blockchains can easily integrate into our products to provide functionality. This is our “religion” so to say, as we don’t openly endorse any single blockchain as the backbone for our solutions.”

Why we selected them: Blockchain is heralded as one of the most important innovations in the financial sector and beyond, as of January 2016 there are more than 60 banks leading financial institutions that have made statements confirming that they are actively working on blockchain projects.

Riding on this wave, we believe that Neuroware is in a strategic position to take advantage of this in Asia. What we are really excited about is to see what innovative solutions that will emerge from their blockchain API.



Source: The Star

Softspace is amongst one of the earlier Malaysian players in the fintech space, their solution is simple yet elegant. They operate in the MPOS space which enables SME retailers to accept card payments. What is notable about Softspace is the fact that they are the 1st in APAC and 2nd in the world to receive an EMV certification for their MPOS solution.

When asked why he felt their solution is important, Chew Soon; the Founder of Softspace shared an emotional story about what inspired him to start Softspace.

“The reason why I started this company was because of my dad, he runs a motorcycle spare parts distribution business”.

He then continued with a hint of sadness in his voice “There was one night where I went home for dinner, I saw this very sad look on my dad’s face, and I can’t remember the last time I saw him this sad. My father told me that there was this sales man that worked with him for seven years and he had not showed up for the last 4-5 days and he has collected close to a RM 100,000”. Had there been a solution that enabled his father to accept electronic payments, this situation could have been avoided.

“That’s when I realized there’s something we can do” said, Chen Soon.

Why we selected them: While RM 100,000 may not be a significant sum of money for larger organisations, for an SME like Chew Soon’s father the effects can be devastating. Beyond avoiding unfortunate stories like what happened to Chew Soon’s father, an MPOS solutions can also do wonders to increase the sales generated by the SME’s, by providing more payment options for their customers.

On the other side of the divide, this solution helps banks to reach a previously untapped market with a cost effective solution. Softspace also has the impressive track record of working with 19 banks across the region. Despite the success Softspace is eyeing to expand their services beyond MPOS, they have laid out plans to venture into HCE and P2P lending.



Source: Katsana

At first glance, the name sounds rather Japanese but the name Katsana really means “Kat Sana” which is a colloquial way of saying “It’s right there” in Malay. In essence, Katsana’s solution is a GPS solution that tracks the behavior of the drivers.

Having the ability to track driver behavior can help insurance companies set their premiums based on a more accurate risk profile of their policy holders. With Katsana’s solution, insurance companies will be able to analyse the driver’s tendency to speed, brake suddenly, take sharp corners dangerously and based on that data, the insurance firm can then tailor the policy to the drivers behavior.

One of the major challenges according to the founder, Fuhaqa is adoption from the consumer who are understandably concerned about privacy. When Fuhaqa was asked how his startup plans to overcome this challenge he said with a cheeky grin “Well, parents are really the group we’ll be marketing to, as parents will always want to keep their children safe and Katsana enables parents to be able to better understand the driving behavior of their children”.

Another model that can be considered for Katsana would be to distribute the solution through insurance companies to quickly scale to market.

Why we selected them: The de-tariffication of the general insurance industry will be coming up this year. Having spoken to many of the insurance players in the market, the general consensus is that the industry is a sleeping giant waiting to be awakened. The de-tariffication will encourage the sector to push through more innovations in efforts to remain competitive.

A usage based insurance for motor vehicles not only will attract a number of users, it will also allow for the insurance companies to limit their claims loss. When asked further on how Katsana aims to solve this issue, Fuhaqa said

“Averagely, on every dollar insurance companies losses roughly 71.5% on claims, we believe Katsana can solve this issue. We have two PHD holders on our team, one of which is working on predictive analytics and the other is on gamification. We believe that through the concept of gamification we can significantly reduce accidents by shaping driver behavior and as a result, lowering accident rates. Our internal studies have shown that risky behavior is reduced by 63% with our solution”.

He then continued “We have a solid track record of recovering missing vehicles, in this two and a half years that we’ve been in the market, we have recovered between RM 8 million to RM 9 Million worth of stolen or lost vehicles”.

With both those things combined, Fuhaqa believes that Katsana can reduce the claim loss in a meaningful way.


With a fintech framework in the pipeline, most major banks are working with fintech in one way or another and several promising players in the local fintech startup scene, Malaysia’s fintech space while not fully matured definitely looks hopeful.

As we speak, more and more fintech startups are emerging locally. Perhaps, soon we will have even more startups to feature in an article. What are your thoughts, do you think Malaysia will rise to be a gateway for fintech in Asia Pacific or will Malaysia lose the race to some of its competitive neighbours? Nevertheless, as a fellow consumer I am sure we will all benefit from this fintech arms race.

Quick Plug: Interested to find out more the fintech scene in Malaysia? Join us for our 8th BankTech Asia Conference & Exhibition in November 2016


About the Author

Vincent Fong is the General Manager of Knowledge Group and a self-proclaimed pundit of banking technology and fintech

Sneak Peek into Indonesia’s Fintech Regulation

Indonesia’s banking sector much like other parts of Asia is ripe for disruption from Fintech. While the banking sector has always been the cornerstone of economies, being the monolithic entities that they are, there are many gaps that can prove to be difficult to fulfil.

Regulators from around the world and Asia are very aware of that reality and Indonesia as a rapidly developing nation of opportunities is not blind to that fact. Having just finished BankTech Asia Jakarta this week, we had the pleasure of having Mr Dumoly F. Pardede who is the Deputy Commissioner of Supervision of OJK (Financial Services Authority) and Mr Tuahta A Saragih who is the Deputy Director of Enforcement, Financial Supervision Directorate to share an outline of what the Fintech regulation of Indonesia will look like at BankTech Asia Jakarta.

One of the key areas highlighted by OJK was the fact that financial distribution amongst the SME’s were severely lacking and the reality is that the banks alone are unable to solve this issue. Mr Tuahta was quoted saying that out of the 60 million Micro SME’s only 11 million of them have loan accounts in banks and they are largely concentrated within the Java Island.

financing distribution


MSME’s and SME’s are the backbone of economies and access to finance facilities is the lifeblood of these entities, the lack of distribution to them is not in line with Indonesia’s national program. He then added that this is where Fintech can really contribute to the nation.

With that in mind amongst various other factors was the reason why OJK came out with the guideline.

Dumoly quote

Mr Dumoly emphasized that while it is important to manage risks, it is also equally important to not stifle Fintech at its infancy. From what we gather during the speech, this is why the approach is being taken.

Mr Tuahta then shared  on the outline of how Fintech will be classified and the regulations that they will fall under, which provides some clarity on how Fintech companies can operate within Indonesia


It is also interesting to note that in a separate panel on Financial Inclusion Mr Pungky Wibowo who is the Head Group Development of Retail Payment System and Financial Inclusion also shared similar views that Fintech solutions can play a big role in financial inclusion, however as a regulator, he opined that they must still be on their toes to counter money laundering and terrorism financing.

Pungky Quote

All in all, our take is that, it is certainly very heartening to see the regulators encouraging the development of fintech in Indonesia. Emphasizing the regulator’s commitment in growing Fintech, both Mr Dumoly F. Pardede and Mr Tuahta A. Saragih is actively involved in organizing the Indonesia Fintech Festival, in which the guideline will formally be announced. We encourage anyone who is in Indonesia during that time to take part in this wonderful initiative from the Indonesian government.


About the Author

Vincent Fong is the General Manager of Knowledge Group and a self-proclaimed pundit of banking technology and fintech

Stepping Out From the Shadow: Corporate Banking Technologies

In this day and age, very often when we speak of innovations within the FSI and Fintech space, the norm is to have a very heavy focus on retail banking. From chatbots to wearable banking, a quick glance of what’s making headlines in this space tells a narrative of digital innovations centered around improving the customer experience within the retail space and the enterprise client is often sidelined.

However, this should not remain the case, seeing as how the majority of a bank’s profits comes from their enterprise clients. For example, if one were to look into the annual reports of some of the top banks in Malaysia, one would notice that over 50% of their profit before tax is derived from their enterprise clients.

The industry as a whole needs to step up their game in corporate banking technology, this is evident in a report produced by EY which indicates that in terms of degree of importance, corporate finance professionals rate technology sophistication at 65% and innovation at 63%. Another study conducted by BCG indicates that 60% of enterprise clients are willing to switch to banks capable of delivering integrated omnichannel services.

This presents both an opportunity and also a threat for the banking sector, for the banks who are willing to transform their services stand to gain an entire segment of customers whereas for those who refuse to innovate will lose clients to more progressive banks. The same study from BCG indicated that laggards can potentially lose up to 15-30% of their profits. It is important to remember that the same enterprise clients that we serve, so in their personal lives are also the same people who are exposed to the conveniences accorded by the consumer banking businesses. Banks need to be able to deliver the same omnichannel experience in corporate banking business as they do with their consumer banking business.

Take for example ING in Poland who began working with Comarch in 2007 to overhaul their corporate digital banking. Through this partnership, ING has introduced a slew new digital innovations for their enterprise clients. The platform allows for quick entry and verification by the operation department and a holisitic overview for quick approval for the decisions makers which includes account status, list of orders pending authorisation and other key banking information.

These conveniences are all made available via multiple channels which includes desktop, mobile and wearable banking enabling busy executives to make important financial decisions on the go. By providing these services, ING differentiated itself from its competitors by adding real value to their enterprise clients versus being a “dumb pipe”.

Within the time frame of 9 years after implementation, ING has witnessed more than 10 times increase of enterprise clients on their platform and over 20% of which are on the mobile platform. Being the first bank in Poland to have implemented this has also gave ING a significant first movers advantage.

Could this potentially be the new norm for digital innovation in the corporate banking arena? As enterprise clients ourselves, we certainly look forward to see more advancements in this space.

Comarch will be presenting and exhibiting at the upcoming BankTech Asia on the 5th – 6th July 2017. If you’re interested to understand more about the case study or the solution do drop by at their booth or join the conference where Maciej Salata will be presenting more on the ING case study.


About the Author

Vincent Fong is the General Manager of Knowledge Group and a self-proclaimed pundit of banking technology and fintech

Fin5ive: Global Fintech Challenge Winners

In collaboration with Matchi for the second time, we’ve recently launched the Fin5ive Challenge to source five groundbreaking fintech solutions to showcase at the 9th BankTech Asia conference and exhibition in Kuala Lumpur from 5th to 6th July 2017.

We’ve been running BankTech Asia for 9 years in Kuala Lumpur, and we are increasingly seeing banks being more open to collaborating with fintech companies and we’ve also observed fintech firms from around the world finding the Malaysian market more appealing as evidenced by an increased number of applications this year. These shifting trends are precisely the reason why we’ve collaborated with a global fintech matchmaking firm like Matchi.

Relevance to the Asian market was key to this challenge. In preparation for the BankTech Asia Fin5ive Challenge, a fintech survey which comprised 70 participating financial institutions from the Asia Pacific region was launched to identify the key pain points. The survey responses were then collated to determine focus areas which formed the entry categories for the challenge.

To ensure the market relevance of the winning solutions, we’ve also enlisted the expertise of a panel of industry experts to join the judging panel. This year’s panel includes major banks and well-known venture capitalists from the around the region: Amran Hassan, Head of Innovation at Maybank in Malaysia, Paolo Baltao, Senior Vice President at Union Bank in Philippines, Markus Gnirck, Co-Founder and Partner at tryb Capital in Singapore as well as Paul Ark, Managing Director for Corporate Venture Capital, Digital Ventures in Thailand.





We’re very thankful for the support from our partner Matchi and our panel of judges for providing market insights and identifying fintech firms that are truly innovative and relevant to the Asian market.

From the many responders that entered the challenge, only 60+ fintech firms were shortlisted and the best-of-the-best were picked for the respective categories by analysts from Matchi, BankTech Asia and the panel of judges. This year’s applications were overwhelming with applications coming from around the globe including cities such as California, Johannesburg, Sydney, Malaysia, India, Switzerland, Ireland, Singapore and Hong Kong – indicating a strong interest in Malaysia’s vibrant market.


In addition to a 10-minute lightning demo in front of 200+ participating bankers, the BankTech Asia Fin5ive winners will each be showcased in a special exhibition area throughout the conference where they are expected to be a highlight for the 500+ trade visitors attending the event.

The awards ceremony will be held on the first day of BankTech Asia which is on the 5th July 2017. The organisers confirmed that the Deputy Finance Minister I, YB Dato’ Othman bin Aziz will be handing out the awards to the winner to during the event.

We hope that through this challenge, more collaboration between bankers and disruptors can be established to lead the way to a much more robust financial services sector.


About the Author

Vincent Fong is the General Manager of Knowledge Group and a self-proclaimed pundit of banking technology and fintech

The Evolution of the Payments Landscape in South East Asia

The whole payments sector is experiencing an unprecedented rate of change, bringing considerable flux and undermining traditional models. The Asian region is not immune to these disruptive changes, over the past few months I’ve observed many interesting developments within the region.

QR Code Payments


Notably, in Thailand there is a concerted push from players like MasterCard, VISA and UnionPay in QR standardisation in support of the Bank of Thailands aspirations towards a cashless society. The standardisation is intended to be adopted across the payments value chain from the banks all the way to the merchants. While this is an initiative that is praised by many industry observers, there are also those who lie within the doubtful camp.

The skepticism arrives on the back of Singapore’s recent lackluster pilot experiment launched in November enabling QR payments in a space that is quintessentially Singaporean; hawker stalls. Local news report within Singapore has indicated that there’s a lack of awareness from the average joe on the street.

Contrasting starkly with Singapore’s pilot experiment, QR payments within China is near ubiquitous. One could speculate that this is largely due to the fact that China leap-frogged plastic or that there’s no equivalent of applications like WeChat which was allowed to flourish under China’s controlled economic environment.


NFC Payments


Source: Vodafone Medien

While NFC payments is a far cry from a new technology, conversations about a cashless society powered by NFC has been ongoing for a while especially within the South East Asian region. For the longest time, despite the hype that surrounds NFC, it has seen very little success within the South East Asian in the past.

However recent developments have revived hopes for NFC-enabled payment systems. Bank Negara Malaysia recently mandated the change of debit cards and credit cards to be NFC enabled. Gradually, there is a visible increase in the number of merchants with NFC terminals. This trend is further driven by the emergence of mobile wallets within Asia.


Mobile Wallet


Source: Samsung

The proliferation of contactless payment systems as mentioned above has certainly done much to support the growth of mobile wallets and vice versa. It is observed that most of the initiatives in the region within the mobile wallet space are carried out by telcos, with like of Samsung throwing its hat in the ring with regional partnerships with incumbent banks like Maybank, CIMB, DBS, Standard Chartered Bank, UOB.

Whereas telco operators like G-Cash, Telkomsel are one of the dominant players within the mobile wallets space within countries like Philippines and Indonesia respectively. The banks too are not sitting idly by in recent months we’ve observed the launch of DBS Paylah, Maybank Pay, CIMB Pay, Vardhana Wallet (DFCC, Sri Lanka) and many others.

The question now remains with all these developments taken into consideration what does the future hold for the payments landscape in Asian countries? To draw inspiration on developments on other countries I ran through the Payment Systems & Supplier Report by IBS.

I would have attempted to share some of the findings here but I don’t think I’ll be able to do it any justice. So I’ve reached out to my friend Abhijit in IBS to request for discounted rates for the report and he has graciously agreed to provide 10% of discount to customers and readers of BankTech Asia.

Please visit the link below if you’re interested:


About the Author

Vincent Fong is the General Manager of Knowledge Group and a self-proclaimed pundit of banking technology and fintech

Malaysia’s Fintech Landscape: Key Developments & Opportunities in 2017

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



Fintecn Malaysia - BNM

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.

Fintech Malaysia - Securities Commission of Malaysia

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.

Fintech Malaysia- MDEC

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:

Fintech Malaysia - Bank Survey

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.

Hong Leong Bank - Fintech Malaysia

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.


Fintech Malaysia - MAYBANK

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.


Fintech Malaysia - CIMB Bank

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.


Fintech Malaysia - PUBLIC-BANK

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.


Fintech Malaysia - Ambank

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 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

iPhone 7: Implications on Financial Services

t’s no secret that since the first iPhone was launched in 2007 it has inadvertently transformed the way we go about our banking activities. Prior to the proliferation of apps, mobile banking was almost unheard of, these days if you are any bank of note you are likely to have a mobile banking app.

While many would argue that iPhone is no longer in the forefront of innovation, with over 1 billion units sold as of July 2016 it is a large user base to ignore completely. One of the main contentions of many people in this new iteration of iPhone is the removal of the audio jack and the introduction of Airpods.



While it may serve as a mere nuisance for it ordinary users, the implications for mPOS solution providers a far wider reaching. Ever since Square pushed this innovation to the market we’ve observed many local versions of Square in various countries enabling small to medium size merchants to accept credit cards and creating a society that’s more cashless.

According to research by Credence Research the mPOS market is predicted to reach 43.32 billion by 2022, with most mPOS players relying on the audio jack to read the cards, one wonders if Apple’s move to remove the jack from its iPhone will put a dent on the numbers.

While some players are still reeling in the news, players like CardFlight is quick to respond by issuing a public statement that their system will be compatible with iPhone through bluetooth.

Whereas Square has not issued any statements adapting bluetooth and instead will be relying on the adapters.


“Headphone jack adapters will work with the Square Reader,” says Leslie Jackson, a spokesperson with Square.

“We anticipate many types of headphone jack adapters will become available and will work to create the best solution for our sellers.”


While the adapter seems like a viable option, will it work awkwardly? The Apple adapter is not designed to create an anchoring to the force needed to be exerted to read a payment card.

Will the other players follow suit with bluetooth or will they rely on the adapters? Perhaps they will ignore the user base altogether?

At this juncture its really difficult to tell, with Apple’s steadily declining market share of 11.8% as of Q2 of 2016 and Android market share being more than 80% would it really be worth it for the players to re-engineer their systems to fit the new iPhone 7? This is especially since the iPhone 7 is yet be officially sold and there is no clarity on whether their will be many users switching from their earlier iPhones to iPhone 7.

However, on the flipside as an mPOS player if you do not make your system ubiquitous do you risk having the banks and merchants reconsider their relationship with you? Either way, the next few months will be an interesting one to observe.

Side note: There’s also this image circulating social media – what do you guys think, is there any meat to these claims? Let me know in the comments below



About the Author

Vincent Fong is the General Manager of Knowledge Group and a self-proclaimed pundit of banking technology and fintech