The country is laying a strong foundation for the fintechs to flourish.
Fintechs are much in demand in Malaysia as the country has seen large scale adoption of technology, there is a high level of internet penetration, use of mobiles has grown phenomenally and the banking system has matured. The country is also seen as a fertile ground for the growth of fintech startups because of the strong entrepreneurial ecosystem and it is no surprise that the financial services sector is the largest funding source for the fintechs.
Studies have indicated that the transaction value of the fintech market in Malaysia is expected to touch $13 billion mark by 2020. Fintechs are influencing practically everything that has transformed into digital - payments, investments, finance and insurance to be specific.
CENTRAL BANK’S ROLE
Malaysia’s central bank, Bank Negara Malaysia, has its vision of a cashless Malaysia. And it has been encouraging efforts in this direction and naturally there is promotion for fintechs, who are working in this area. The payments services sector has seen significant changes and there are several non-bank entities with their state of the art technology platforms operating in the country. Even the insurance sector is seeing some developments taking place in the form of insuretech. Several foreign fintechs are present in the country through partnership with local firms and many of these firms are assisting the banks and other financial services institutions to modernize their technology platforms. The country’s top bank MayBank has partnered with Samsung and AliPay to launch MayBank Sandbox, which offers developers from anywhere a banking API to make use of existing banking functions.
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