Lending

Fintech Players Welcome Malaysia’s New Online Lending Guidelines

									by Vincent Fong
November 16, 2020
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The Ministry of Housing and Local Government unveiled last week a new guideline that will allow for licensed moneylenders to provide loans digitally. Zuraida Kamaruddin Minister of Housing and Local Government said that these new guidelines were released with microentrepreneurs in mind, who are typically unable to secure loans from banks.
Eight operators were granted the first batch of approval to provide online loans, they include; Axiata Digital Capital Sdn Bhd, BigPay Later, Grabfin Operations (M) Sdn Bhd, GHL Payments Sdn Bhd, Presto Credit Sdn Bhd, JCL Credit Leasing Sdn Bhd, Fortune Tree Capital Sdn Bhd, and Hoop Fintech Sdn Bhd.
Minister Zuraida Kamaruddin anticipates that with the approval of these 8 players, more licensed moneylenders will come forward to seek approval to do the same. According to the minister  currently, there are 4572 licensed moneylenders in Malaysia with the largest bulk of it coming from Sabah with roughly 1,600 operators followed by Selangor with 893.

Danny Leong, Group CEO, GHL Berhad, explained that the new guideline allows companies like his to fully digitise the process, compared to the previous guideline which required for borrowers to physically show up to sign the loan agreement at the registered premise of the lender, with CCTV recording, and face to face meeting with an attester.
Khairil Abdullah, CEO, Axiata Digital further adds that digital moneylenders can now use technologies like electronic signatures to provide access to financing to the underserved markets, he added that the actual licensing regime remains the same in that the licensed digital lender must offer the same protection of borrowers’ rights, such as interest rate limits, under the current law.
They both concur that the move to introduce this new guideline will significantly speed up the market’s ability to address the lending needs of the underserved. Khairil believes that this will have a two-fold effect, by making licensed moneylenders more accessible, he predicts that the demand for illegal and extortionate lending will also decrease.
Commenting on how this will affect Axiata Digital’s lending business, Khairil said
“This is a very welcome development and forward-looking move by the Ministry that will enable Aspirasi to scale its service offerings under its existing licence.
Mohd Khairil Abdullah
As we are a digital company, this enables us to unlock the value of our moneylenders licence that we have held since 2019. In addition to our existing products, Aspirasi’s customers will now have the option to borrow under the regulated regime offered by the Moneylenders Act 1951 and the new Guideline.
At Aspirasi, assisting underserved MSMEs to fulfil their business goals is at the core of our business. We believe that with the right support and by embracing technology, they can make financial progress personally, professionally and in service of others, and become a part of the digital economy.”
Danny Leong

Similarly, Danny Leong commented,
“This would help GHL to grow our micro-lending business much faster and at a lower cost. This reduction in cost could then be transferred to borrowers through lower interest rates as well as smaller lending amounts, hence serving the SME, MSME and the B40 segments.”

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Payments

PayNet Signs on Revenue to Develop Secure Payment Tokenisation

									by Fintech News Malaysia
November 16, 2020
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Payment solutions provider Revenue has secured a contract for the provisioning of the MyDebit tokenisation platform (TSP) for Payments Network Malaysia (PayNet).
To formalise the deal, the company’s subsidiary Revenue Secure had signed an agreement with PayNet for the contract. Under the agreement, Revenue Secure will develop and implement the TSP for PayNet.
PayNet is the national payments network and central infrastructure for Malaysia’s financial markets. Bank Negara Malaysia (BNM) is PayNet’s single largest shareholder with 11 Malaysian banks as joint shareholders.

Datuk Eddie Ng Chee Siong, the Managing Director and Group Chief Executive Officer of Revenue said upon completion, the platform will be integrated and used by more than 30 banks throughout Malaysia.
To date, there are approximately 45 million MyDebit cards in market circulation in Malaysia.
Datuk Eddie Ng Chee Siong
“This indeed is another major milestone for REVENUE as we are building a crucial component in payment ecosystem for PayNet to be used in Malaysia, whereby all MyDebit (i.e. ATM card) cardholders can use it securely for online payments”
he added.
Tokenisation plays an important role in securing online and electronic commerce transactions which are processed by PayNet’s MyDebit switch.
Sensitive account information such as a debit card’s 16-digit primary account number (PAN), is replaced with a unique substitute identifier known as a token PAN, for a purchase transaction. This protects sensitive information from theft and fraud, ensuring a secure checkout for cardholders.
Apart from added security, tokenisation also provides cardholders the convenience to store their favourite debit card in the merchant’s mobile app or website, that could be easily retrieved for future use without the hassle of entering card information repeatedly. This could encourage shoppers to use MyDebit or ATM cards when making payments online and also increases conversion rate for online merchants.
The use of tokens, the process of substituting a sensitive data element with a non sensitive equivalent, is also an integral strategy for financial institutions to enhance payment security in order to combat online fraud.

Featured Image: Datuk Eddie Ng Chee Siong, Managing Director and Group CEO of REVENUE

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Huawei Pay Now Available in Malaysia

Payments

Huawei Pay Now Available in Malaysia

									by Fintech News Malaysia
November 18, 2020
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Huawei announced that its mobile payment service, Huawei Pay, is now available to its Malaysian users. The same service was launched in Thailand in June 2020
This launch was in partnership with UnionPay International and Industrial and Commercial Bank of China (ICBC).
It was first introduced in August 2016 in China as a mobile payment service rooted in Huawei Wallet, as part of the Huawei Mobile Services (HMS).

Huawei Pay is one of the key services under the Huawei Wallet application that supports the Near Field Communication (NFC) payments in retail stores.
Users can enable Huawei Pay by adding their ICBC UnionPay credit cards to Huawei wallet app and make transactions by tapping their smartphones to the payment terminal.
Instead of having the need to unlock their phone, application or even connect to the internet, users can opt to make in-store payments by holding their smartphone close to the payment reader. Once the fingerprint is authenticated, the payment is done.
Huawei Pay users are able to make payments at over 20 million terminals with the UnionPay QuickPass logo across 51 countries and regions around the world. To date, reportedly more than 30 Huawei smartphones have the Huawei Pay feature.

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Crowdfunding

MoneySave Completes P2P Crowdfunding in 95 Seconds for Malaysian Online Grocer

									by Sponsored Post
November 19, 2020
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MoneySave, a local peer to peer (P2P) crowdfunding platform, announced that they have achieved what they claim to be the fastest Malaysian P2P crowdfunding for Potboy, a homegrown online groceries platform. The record was achieved in 95 seconds, starting from the time the investment note was hosted online to a 100% subscription.
Vincent Soh
“It only took 15 investors to fully subscribe the RM180,640.00 investment note offered by Potboy on MoneySave’s P2P crowdfunding platform on 3rd November 2020. This is a testament of the speed and power of crowdfunding on our platform.
Our investors are very proud to crowdfunding a rising star in the digital grocery space such as Potboy and look forward to crowdfunding 40,000 SMEs the next 5 years”,
said Vincent Soh, CEO of MoneySave.
The Securities Commission Malaysia (SC) announced at its virtual SCxSC fintech conference in October 2020 that more than 2,500 Micro, Small and Medium Enterprises (MSMEs) have raised more than RM1 billion through the regulated crowdfunding markets of the Malaysian capital market.

For SMEs, MoneySave would be an alternative source of finance compared to SME loans, factoring, equity fundraising in Bursa Malaysia, private equity, and venture capital.
For investors, MoneySave’s investment notes are targeted to yield between 6%-12% p.a. for short tenures of 1 to 4 months to assist the SMEs with their short-term working capital. They consider themselves an alternative investment compared to fixed deposits with banks, bonds or sukuks, mutual funds, unit trusts, private equities, and stock investments in Bursa Malaysia.
Eddie Chew
“Potboy Group is delighted to be crowdfunded by MoneySave and possibly setting a world record at the same time. We are humbled by the support and trust given by MoneySave’s investors and look forward to becoming Malaysia’s leading online grocer”,
said Potboy’s CEO, Eddie Chew.
““It only took 15 investors to fully subscribe the RM180,640.00 investment note offered by Potboy on MoneySave’s P2P crowdfunding platform on 3rd November 2020. This note was highly sought after as it returns 12.25% p.a. and would be repaid in 2 monthly instalments to the investors. This is a testament to the speed and power of crowdfunding on our platform.” Soh added.
Moving forward from their successful campaign with PotBoy, MoneySave is targeting to crowdfund the suppliers and contractors of Malaysian ministries, agencies and government-linked companies (GLCs) as well as companies such as Telekom Malaysia, Tenaga Nasional, Sime Darby, Maybank, Petronas, Axiata, Maxis, Public Bank and other top 100 Bursa companies.
Moneysave said that it is aspiring to be the top P2P Crowdfunding Platform in Malaysia and Asia specialising in the supply chain financing of trade invoices where issuers or Small Medium Enterprises (SMEs) come to Moneysave’s platform to seek financing by selling their trade invoices, trade receivables or trade payables at a margin of up to 85% of the invoice value. For example, an invoice value of RM100k can be funded up to RM85k. The tenure of funding is short term between 30-180 days only.
MoneySave plans to expand its business to Indonesia and other ASEAN countries in the next 3 years and has submitted to the Securities Commission of Malaysia to be a shariah-compliant P2P crowdfunding platform by December 2020.

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Blockchain/Bitcoin

Luno Claims Crypto Exchange Top Spot in Malaysia with RM 827 Million in Transactions

									by Fintech News Malaysia
November 24, 2020
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Luno, the first Securities Commission-approved digital asset exchange in Malaysia, announced today that the company has processed over RM 827 million worth of transactions in Malaysia since its relaunch in 2019.
Claiming it is the largest digital asset exchange in Malaysia, Aaron Tang, Country Manager, Luno revealed that they have more than 180,000 users and over 90% of the local regulated digital asset exchange market share. The data excludes trading volume from unregulated crypto exchanges which are also relatively popular among Malaysian crypto investors.
He said that Luno stores more than RM 165 million on behalf of its customers across four approved cryptocurrencies — Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) and Litecoin (LTC).

Aaron Tang
Aaron Tang further added,
“It is very encouraging to receive such a great reception from Malaysian customers. Investments in cryptocurrency have been increasing steadily in Malaysia with many investors looking to cryptocurrencies as a good store of value or a start to their investing journey. On Luno, 68% of users buy cryptocurrencies for investment purposes as they look for alternative investment vehicles to diversify their portfolios.”

He also noted that it was interesting to see that majority of activities on its platform comes from customers who are aged between 30 – 49 years old, contrary the belief of some who thinks that crypto investors are primarily Gen-Zs and young millennials.
In September 2020, Luno was acquired by New York-based Digital Currency Group (DCG). With the backing of DCG, the company hopes to fulfill its vision of upgrading the world to a better financial system. Among other updates on Luno are new trading signals in partnership with a blockchain intelligence company IntoTheBlock, an improved trading view on the desktop application and the recently introduced stop-limit and market orders. In addition, Luno has expanded its cryptocurrency offerings in Malaysia from BTC and ETH (during its relaunch) to adding XRP and LTC.
Aaron also revealed that Luno is looking to roll out a digital assets savings feature, which is currently undergoing regulatory review.

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Payments

TransferWise Malaysia Enables Money Transfer to China Through Alipay

									by Fintech News Malaysia
November 24, 2020
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TransferWise announced today the expansion of their international money transfer service for customers in Malaysia who can now receive remittances from Indonesia and send MYR to Alipay users in China. The newly launched service in Indonesia is in partnership with local remittance company Instamoney.
In September, TransferWise made it cheaper for customers to send money to MYR or any of these other nine Asian currencies — INR, THB, IDR, CNY, PKR, VND, KRW, LKR, or — BDT. For some currency routes, they said the price drop can be as high as 30%.
The company has also gone live on DuitNow, allowing customers to receive their international payments in less than 2 minutes. Customers are now also able make instant pay-ins to fund their transfers, as a result of their integration with the Financial Process Exchange (FPX).

Lim Paik Wan
TransferWise Malaysia Country Manager, Ms. Lim Paik Wan, said:
“With more Malaysians leading increasingly global lives, our mission in Malaysia is to make it even faster and cheaper for customers to send or receive money from all over the world, and we aspire to make the process more convenient. We are excited to be bringing these new enhancements to our service here for our customers in Malaysia, particularly our wider network coverage enabling them to receive remittances from Indonesia and send money to China.”

Featured image credit: Transferwise

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Blockchain/Bitcoin

Huobi is Not Authorised to Offer Crypto Exchange Services in Malaysia Outside of Labuan

									by Vincent Fong
November 30, 2020
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Huobi recently announced that as a “localized digital asset exchange for the Malaysian market” they have launched their service to provide Malaysians a “safe and regulated way to trade cryptocurrencies” after securing a license from “Malaysian authorities”.
They further added that securing this license allows them to “provide spot and derivatives trading services in Malaysia”.
The vaguely phrased sentence which some believe to be deliberate, seems to have drawn some confusion among the crypto community.

The statement made is not technically accurate, while they are allowed to operate within the jurisdictions of Labuan, the company will require additional approval from the Securities Commission (SC) Malaysia to carry out regulated activities such as offering crypto exchange services to Malaysians outside of Labuan.
The statement seems to have even confused some financial media who misreported that they have secured the necessary approval from the SC.
Huobi is not regulated in the same sense that operators like Luno, Sinegy and Tokenize are where they are recognised by the SC as a Digital Asset Exchange (DAX) operator. While the 3 operators are allowed to offer services to all Malaysians, Huobi does not have the same regulatory clearance to do so.
We’ve reached out to the SC to clarify this issue, a representative said to Fintech News Malaysia,
“The Securities Commission Malaysia (SC) would like to clarify that Huobi is licensed by the Labuan Offshore Financial Services Authority (LFSA) and not by the SC. Entities licensed by the LFSA are not permitted to carry out these regulated activities onshore in Malaysia, i.e. outside Labuan without being licensed, registered or approved by the SC.”
While it is not illegal for Malaysians to trade with Huobi Labuan the same way that it is not illegal for them to trade with other unregulated exchanges, investors will not be accorded the same protection under the Malaysian law.
In similar news, the SC had previously added Binance to their list of “unauthorised entities”.

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Blockchain/Bitcoin

Bursa Malaysia and Hashstacs Complete Pilot for Blockchain Bond Platform

									by Fintech News Malaysia
December 3, 2020
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Blockchain development company Hashstacs (STACS), announced that it has completed the blockchain proof-of-concept (POC) with Malaysia’s national stock exchange, Bursa Malaysia, to facilitate the growth of the bond marketplace at the Labuan Financial Exchange (LFX).
The POC was executed and tested together with Bursa Malaysia, alongside the Labuan Financial Services Authority (LFSA), Securities Commission of Malaysia (SC), China Construction Bank Corporation Labuan Branch (CCB Labuan), CIMB Investment Bank (CIMB) and Maybank.
Together with CCB Labuan, CIMB and Maybank, the POC simulated several bond issuances which were all issued and managed on the STACS Blockchain.

The POC focused on building awareness of technology potentials and exploration of new service offerings. Using the Trident Blockchain-based platform developed by STACS, bond templates were mirrored onto smart contracts for rapid deployment, while operational workflows were streamlined to increase efficiency and flexibility in settlement cycles.
Bursa Malaysia had revealed plans for the blockchain-powered bonds marketplace with STACS dubbed “Project Harbour” in July this year.
According to STACS, the creation of a blockchain powered infrastructure will provide a single source of information that is kept in a shared distributed database between Bursa Malaysia and participating banks. This provides a registry of ownership and reducing counterparty risks and reconciliation costs.
Mr Benjamin Soh, Managing Director of STACS said,
“Given our experience in capital markets technology, we are delighted to work with Bursa Malaysia, a national stock exchange with innovation at its core, demonstrating its commitment and leadership to the advancement of new technology through this partnership.

Together, we were able to bring together the collective effort of multiple industry practitioners, forward thinking regulators and technologically advanced partners to explore utilities for the industry.”
Datuk Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia said,
Datuk Muhamad Umar Swift
“We are happy with the completion of the initial stage of the POC. The partnership with STACS, industry participants and regulators demonstrated that block chain technology can deliver increased efficiencies, transparency and trust that can benefit the bond market. These are key values that ensure we remain responsible for our efforts to develop a vibrant and attractive marketplace”.
Through the project, various opportunities were sighted, such as the creation of an industry platform to offer an end-to-end platform for issuance, trading, settlement and depository of bonds, so as to fulfill the needs of the industry.
With the first milestone completed, future phases look towards further collaboration, co-development, and implementation of new technology to expand the Malaysian capital markets.

Featured image edited from Wikimedia Commons

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Insurtech
Personal Finance Mgt (PFM)

360F and FI Life Launches Personalised Advisory for Insurance and Investment Plans

									by Fintech News Malaysia
December 9, 2020
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Singapore-based fintech company 360F and Fi Life, a Kuala Lumpur-based insurtech, have collaborated to introduce the new 360-NeedsProfiler to the Malaysian market.
This online tool allows users to self-discover their financial needs based on Malaysian demographic and mortality data and 360F’s personalised prediction algorithms which enables data-driven and scalable advisory.
Choosing suitable protection and investment products can seem daunting to many consumers. Product comparisons are difficult, especially when protection elements are combined with investment ones.

By answering nine non-intrusive online questions, they said users will receive a succinct customised report that quantifies in percentage terms what are the most important protection needs of the user, whether be it life, critical illness or disability protection. Another available option is the wealth accumulation needs of the user.
Consumers can seek out separate protection and investment plans that address their needs with the 360-NeedsProfiler.

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Regtech/Regulation

eKYC Startup WISE AI Receives Funding From Sunway’s Venture Firm Sun SEA Capital

									by Fintech News Malaysia
December 9, 2020
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WISE AI, a startup providing eKYC and digital identity solutions, has raised an undisclosed amount of funding from Sun SEA Capital, a venture capital backed by Sunway Group. This news follows Bank Negara Malaysia’s approval of the eKYC framework in June 2020.
Without stating names, the startup claims to have secured a sizeable amount of reputable clients ranging from a subsidiary of BNM, core banking system providers, state governments, credit rating agencies and fintechs.
“Through Sun SEA Capital’s investment, WISE AI is able to explore collaboration opportunities leveraging Sunway’s vast ecosystem across 13 business divisions as well as Sunway City Kuala Lumpur as a living laboratory to potentially test, validate and implement new ideas and services as a launchpad for future growth.”
said Raymond Hor, Director of Sun SEA Capital.  In a media statement, they said that the investment proves timely as Sunway prepares for their digital bank license application.

WISE AI Co-Founder David Lim said,
David Lim
“Anyone, even those in rural and sub-urban areas, can open a bank account within minutes of applying. This totally changes the impact of financial inclusion for the unbanked population in particular”.
“Our greatest competitive advantage is that we own this full fledged eKYC technology. This gives us the flexibility to localise and customise our offerings for partners in each country cost-efficiently. WISE AI, a Southeast Asian startup, has a strong understanding of the various cultures and regulations across the region.”

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Insurtech

AIA Begins Regional Tie Up with ZA Tech in Malaysia

									by Fintech News Malaysia
December 9, 2020
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AIA Group has announced a regional strategic digital technology partnership with ZA Tech, a tech venture founded by Chinese digital insurer ZhongAn. The initial focus will be Malaysia, where AIA General Bhd announced a new digital insurance plan sold through Shopee, an online shopping platform in South East Asia.
This partnership will see AIA leveraging ZA Tech’s expertise and their “Graphene System” to enable AIA to develop and distribute scenario-based digital products with greater speed. ZA Tech’ said that it will help AIA integrate with its digital partners to instantly issue coverage for individual customer segments based on their lifestyle activities.
After launching in Malaysia, AIA and ZA  Tech plan to extend the partnership across other AIA markets and will include digital life and health insurance.

Mark Saunders
Mark Saunders, AIA Group Chief Strategy and Corporate Development Officer, said,
“Our agreement with ZA Tech is a significant step forward in enhancing our ability to connect with our existing and new partners, enabling us to build compelling new digital solutions faster, and create innovative ways of attracting new customers.
“This offers tremendous potential for AIA to build long-term relationships with these customers and meet their evolving financial advice, protection and savings needs through our multi-channel distribution to help many more people live Healthier, Longer, Better Lives.”
Bill Song
Bill Song, CEO of ZA Tech, said

“We are delighted to partner with AIA, one of the leading insurers in the world, to address customers’ pain points through delivering scenario-based insurance products efficiently. With our experience in providing tailor-made insurtech offerings, ZA Tech is well-positioned to embark on a new partnership journey with AIA as we seek to secure a stronger foothold in Pan Asia.”

Featured image credit: edited from AIA

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Lending

CapBay Crosses the RM100 Million Mark With Its P2P Financing Platform

									by Fintech News Malaysia
December 11, 2020
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CapBay, a Malaysian P2P supply chain financing platform, has provided RM 100 million in funding across 500 investment notes on its platform since its launch 9 months ago in March 2020.
This milestone is part of CapBay Group’s strong track record of providing supply chain finance since 2017, facilitating a total of RM 800 million across 9,000 transactions covering underserved SMEs.
CapBay was part of the second batch of P2P license recipients last year, while the first batch were announced back in November 2016.

CapBay launched its P2P platform amid the COVID-19 situation with the intention of widening access to financing to the underserved SMEs.
Wong Jian Eu
“We are thrilled to achieve such a milestone especially while still plagued by the impact of COVID-19. That we have been able to do this in record time shows our ability to provide sustainable growth for both our SME clients and investors. Here in CapBay, we strive to continuously offer high quality investments for our investors.

Through robust risk management and advanced credit scoring, we ensure our investors’ interests are protected. Since the Overnight Policy Rate (OPR) cuts, we know that investors are actively looking for more high-quality investment products that are safe and low risk while generating healthy income. CapBay aims to fill this gap,”
said Wong Jian Eu, CapBay’s Head of P2P.
With recent strategic partnerships inked between top institutions and CapBay, P2P investors can now invest alongside institutional investors in a safer asset class backed by government and corporate receivables. P2P investors on CapBay have earned net returns of 10% p.a.
CapBay also recently announced a 49% stake acquisition of Kenanga Capital Islamic to set up an Islamic Fintech joint venture
Featured image: Wong Jian Eu, Head of P2P at CapBay

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Payments

Soft Space Deepens Push into Japanese Market with GMO Partnership

									by Fintech News Malaysia
January 5, 2021
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Malaysian fintech startup Soft Space has announced that it has partnered with GMO Financial Gate (GMO-FG), a Japanese payment service provider, to introduce payment solutions within the Japanese market.
With this partnership in place, Soft Space will be able to support secure and seamless Europay, Mastercard, and Visa (EMV) transactions, and allow it to introduce its suite of innovative payment solutions into various industry sectors in Japan. In the near future, Soft Space and GMO-FG aim to deploy more acceptance points.
Developed by Soft Space’s homegrown technology, these suite of payment solutions capitalise on the convenience of smart devices to perform cashless card transactions. Merchants and partners that adopt these payment solutions will reportedly be able to securely transact and lower their cost of operations.

Joel Tay
“Soft Space is grateful to be part of the initiative to advance Japan’s payment scene through our partnership with GMO-FG. Japan has been pushing cashless acceptance, particularly contactless payments, and this collaboration will enable us to expand and establish our presence across Japan and give options to a variety of sectors to adopt our payment solutions.”
said Joel Tay, the Chief Executive Officer of Soft Space.
Kentaro Sugiyama
“The current pandemic has recognised going cashless as a social responsibility, and we are pleased to work alongside Soft Space, who is a key player in the area of contactless payments. This enables us to meet our merchants’ requirements in providing them with a safe and secure cashless platform while contributing to Japan’s cashless market growth.”
said Kentaro Sugiyama, the Chief Executive Officer of GMO-FG.
In an effort to further encourage contactless payments in Japan, Soft Space has launched its Fasstap, a Tap to Phone solution which was adopted by Fujitsu Frontech, an auto-machine manufacturing company so that it can equip buses with the ability to accept card transactions on an Android based tablet.
By providing Soft Space’s solution to the auto machine manufacturing company, this initiative supports Japan’s Ministry of Land, Infrastructure, Transport and Tourism initiative where passengers can pay by simply tapping their contactless cards on a tablet equipped with Soft Space’s solution.
Prior to this, Soft Space also partnered with Japan’s JCB in efforts to push contactless payments

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Lending

P2P Lender microLEAP Receives RM3.25 Million Funding From MAA Group

									by Fintech News Malaysia
January 13, 2021
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microLEAP, Malaysian platform that offers both Islamic and Conventional Peer-to-Peer (P2P) financing, announced a successful RM3.25 million funding round, made up of RM1.25 million in equity and a RM2 million advance. The RM3.25 million will be used for advertising and promotions, hiring of more staff and tech enhancements.
microLEAP is a registered market operator and was granted approval to operate a P2P financing platform by Securities Commission Malaysia in May 20199
Additionally MAA Group has also committed to invest RM10 million in MicroLEAP’s notes. The investments will be spread across microLEAP’s Islamic investment notes up to 30% per investment note

In 2021, microLEAP looks to further expand its Islamic P2P financing services to Small and Medium Enterprises (SMEs) as well, with new products such as Islamic car dealer financing and Islamic invoice financing set to be launched early in the year.
With SMEs in Malaysia amounting to 98.5% of businesses, it is crucial to tap into the market to provide alternative funding options for them to grow their businesses.
microLEAP also aims to launch its app for Apple IOS and Google Android devices in 2021 to further ease the application processes.
Tunku Danny Nasaifuddin Mudzaffar
“microLEAP is glad and honoured to receive support from such a prestigious and highly respectable entity. Since the launch of our Islamic investment notes back in April of 2020, we have seen an increase of funds disbursed to micro-enterprises by 1,000% in just a few short months.

This injection of funds will help accelerate the growth of Malaysia’s P2P financing industry as more investors gain confidence in the business model, allowing for more micro-businesses to be positively impacted.”
stated Tunku Danny Nasaifuddin Mudzaffar, CEO of microLEAP.
Tunku Dato’ Yaacob Khyra
“Peer-to-peer (P2P) financing has been regulated in Malaysia since 2016, but Malaysia has only recently recognised its potential to help businesses and Investors. We have seen tremendous growth in this space with many P2P operators emerging.

With that said, we are glad to join hands with one of the industry’s key players, microLEAP, to lend a hand to businesses that require additional support to get off the ground, stay afloat or simply expand in this turbulent period. We are excited to see what the future holds for both parties following this collaboration,”
says Tunku Dato’ Yaacob Khyra, Executive Chairman of MAA Group.

Featured image: From L to R: Anand Kanagasingam (Group COO, MAA Group Berhad), Tunku Dato’ Yaacob Khyra (Executive Chairman, MAA Group Berhad), Tunku Danny Nasaifuddin Mudzaffar (CEO, microLEAP), Matthew Fernandez (COO, microLEAP) and Marzuki Musa (CMO, microLEAP).

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E-Wallets
WealthTech

Touch ‘n Go First E-Wallet to be Approved by SC to Offer Investment Products

									by Fintech News Malaysia
January 13, 2021
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Touch ‘n Go (TNG) Group’s subsidiary TNG Digital Sdn Bhd (TNGD), has emerged as the first e-wallet to be granted a conditional approval to operate as a Recognised Market Operator (RMO) by the Securities Commission of Malaysia (SC).
TNG said that it aims to launch its “financially inclusive investment product in the first quarter of the year, allowing our users to access basic investment services for as low as RM10”.
The conditional approval by the SC will enable the company to directly distribute capital market products, including money market unit trust funds, through the Touch ‘n Go eWallet platform, without having to be directed to third-party applications.

This proposition is made possible through TNG’s collaboration with Principal Asset Management (Principal), a Malaysian fund management company. This partnership combines platform development, technology and data expertise of Touch ‘n Go eWallet with Principal’s expertise in investment strategy and fund management.
This is in line with SC’s announcement in May last year that it will facilitate the online distribution of capital market products such as unit trusts, through e-wallet or e-payment service providers.
Effendy Shahul Hamid
“This truly is a landmark development and an industry first. Our teams have been working tirelessly together with regulators and partners to get to this stage. The RMO status will allow us to bring a string of innovative digital offerings to our users.
said Effendy Shahul Hamid, Group Chief Executive Officer, TNG Group.
“We feel that this offering will add significant value to our large payments and transportation user base and continue our evolution into financial services. We aim to make this an extremely seamless and frictionless offer to Touch ‘n Go eWallet users. With the approvals behind us, we will now focus on ensuring the user-experience is best-in-class as we move towards a launch,”

Featured image: Effendy Shahul Hamid, Group Chief Executive Officer, TNG Group

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Insurtech

GHL Ties up With Loanstreet to Offer Online Road Tax and Insurance Renewal

									by Fintech News Malaysia
January 18, 2021
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Payments firm GHL has expanded its service offerings to include road tax and vehicle insurance renewal service with a recent tie up with Loanstreet, a Malaysian financial market place. On the heels of the launch of GROW by GHL, offering a myriad of both financial and non-financial products, GHL Systems adds more value-added services in addition to payment acceptances.
In addition to the Road Transport Department (JPJ) and other service providers offering vehicle road tax and insurance renewals, consumers can now also renew online via GHL’s GROW platform and Loanstreet.
The company said that this service enables end-to-end road tax and insurance delivery services right to consumer’s doorstep for a quick and hassle-free process.

The insurance package is customisable for any additional coverage add-ons ranging from windscreen, natural disasters (flood) to liability claim from passengers. Consumers will reportedly be able to compare the multiple options available in the market on a single page before making their choice.
Sean S. Hesh, Group CEO of GHL Systems Berhad said,
Sean S. Hesh
“We are delighted to keep on diversifying our offerings above and beyond payment acceptance services. Online road tax and insurance renewal gives consumers choices and options and forms part of our strategy to expand our value added services (VAS) offerings to our merchant base as well as to the public at large.”

Robin Ang, Director of Finology (Holding company of Loanstreet) further added.
Robin Ang
“Loanstreet was the first website in Malaysia where people could renew motorbike road tax and insurance fully online. We’ve been steadily adding on new products and insurers since then.

Today, we are proud to support GHL’s vision to expand their offerings to the public and enable this for GHL’s user base.”
Due to the COVID-19 pandemic and Movement Control Order (MCO), the JPJ and post office’s capacity to handle physical renewals are impacted due to tighter standard operating procedures (SOP) on social distancing.
This move allows for renewals to be done without the risk of physical exposure.

Featured image credit: edited from Unsplash

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Changing the World With Bank of Things

Digital Transformation
Sponsored

Changing the World With Bank of Things

									by Fintech News Malaysia
January 27, 2021
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Digital transformation is now everywhere, as every industry is actively adopting advanced information and communications technology (ICT) while changing business practices. The digital economy is extending its presence with speed, ease of access, as well as the power penetration that continuously change the behaviors of consumers and enterprises.
Such changes complicate the relations between supply and demand, making the market more segmented, diversified, whereas services and products are more personalized. That means organizations must reallocate their resources, and most importantly, rebuild their technological infrastructure to facilitate the pressing needs of agility and scalability.
Bank Service Ecosystem, Huawei’s Next Generation Financial Infrastructure Bank of Things White Paper
From IoT to BoT
“Internet of Things”, or “IoT”, has been a buzz phrase, reflecting the integration of technologies in artificial intelligence (AI), mobility, 5G, big data and so on. Essentially, it is a network where things are interconnected, which makes tracking, location, identification, monitoring, as well as management, much more correlated.
But “IoT”, intuitively, is seen to be involved in the tangibles, and financial services industry does not seem to have any direct association with it. Moreover, usually considered conservative, financial institutions like banks may not easily engage in the wave where technologies are the initiatives, given the complexity of governance and compliance that the gatekeepers are not opening the doors quickly.
Still, many banks are looking for various combinations of technology to reshape their operating models as the digital economy is extending its presence and here we have “Bank of Things”, or “BoT”.
Early on, BoT was conceived as the material infrastructure that facilitates the billions of data transfers that take place every day. It could facilitate data collection and sharing for insurance companies, instant contactless payments, or provide a framework for retail banks to collect information on customers. However, BoT could go way beyond that.
At HUAWEI CONNECT 2020 in September, Huawei and Shanghai Pudong Development Bank, jointly released the Bank of Things White Paper, redefining the financial service model, building on the concept of IoT and the related technologies.
Connecting humans and things
BoT is defined as “a business form in which ‘things’ become one of the core production materials of future banks and a component of the next-generation financial infrastructure with pan financial service capabilities,” which “things” refer to physical entities that directly engage in financial activities. Giving thanks to AI, “things” become more intelligent, where they will be able to make decisions autonomously, and likely to engage with humans via different social activities. Therefore, these “intelligent things” are expected to sense with its capability of environment awareness; they can express, think and memorize via information interaction, processing and storage. Ultimately they can identify with the capability of ownership proving. It won’t be at all surprising where “things” can independently own bank accounts and become direct banking service receivers, that are the customers.
Business models covering various scenarios
Despite the transformation that banks can serve “things” in general, customers still have their utmost importance of the financial service industry. The sector looks to tailor-make products and services for customers under specific scenarios and it is exceptionally useful in building such scenario centric business models.
With BoT, commercial banks, for instance, can proactively provide services to customers by identifying scenarios and analyzing their requirements using the massive data available. Customers will then receive faster services with customized advice before they realize their needs.
This is a critical for personalized services, especially when BoT is more than just about people but also “intelligent things”. Through this, banks can interact with customers, detect their experience and know their requirements by embedding services into production and real-life scenarios. Customers can then see their demands better addressed with more precise services.
Financial services available anytime, anywhere
With the decreasing reliance on humans, the Bank of Things allows comprehensive services round the clock and unrestricted on locations. For example, a bank can easily approve your loan application at 2 a.m. when you are at the other end of the globe, as long as you have your smart device with you to keep you connected.
Other services like renewing licenses or receiving funds can be done anytime. That means “business hours” will become meaningless, as the world can continuously operate with the support of AI, connectivity and other innovative technologies.
Amid these transactions, BoT can also detect real-time customer behavior in specific scenarios using various devices. Human beings may not be as involved in the service chain. Still, they are ultimately enjoying the advancement of services anytime, anywhere, thanks to the integrated pan-financial services supported by the likes of big data and associated analysis.
Enhanced risk management model on an enhanced data credit system
Risk management is sometimes overlooked in the course of digital transformation. AI is more frequently applied in assessing customers’ credit background, for instance, among banks for loan or mortgage. Some leverage the technology to come up with different loan products for the benefits of both ends.
By utilizing technologies including big data, cloud computing, mobile network, and of course IoT, BoT can run a risk management toolbox using objective data – the combination of subject credit, transaction credit and entity credit. As things are intelligently connected, the toolbox can quickly start with customers’ necessary information and go through the process by carefully contain risks along each stage of data analysis. The new risk management model may enrich credit data sources, improves data credibility, and allows more natural and legal persons to enjoy financial rights, facilitating financial inclusion.
Bot goes beyond future
The concept of Bank of Things demonstrates a new financial infrastructure that is futuristic and visionary, yet enormously pragmatic in the era of a digital and intelligent society. While the Internet of Things reshapes economy by changing the interactions between supply and demand, BoT takes the transformation to yet another level by giving “intelligent things” the financial capabilities. Customers can also be served with a broader range of products and services without the limitation of time and location. For banks, this turns pan-financial service capabilities into one of the core parameters of competitiveness.
Shanghai Pudong Development Bank and Huawei have shared more insights in the White Paper. In additions of how this BoT concept can extend service targets beyond people to “intelligent things”, as well as the business scenarios and the enhanced risk management model based on an objective credit system, the White Paper also details on BoT business forms, the related architecture, and the scenario design in the digital economy. There are more about possible technical challenges, the expectations for pan-financial services and a new digital credit system.
Along with the lender, Huawei set up a lab for innovation in 2018, and the results have been fruitful. In 2020, Huawei signed a deal with the bank to explore more option such as improving user experience, leveraging digital technologies, and driving the innovation of industries like retail, communications, transportation, and healthcare, and ultimately creating a thriving digital economy.
Shanghai Pudong Development Bank was incorporated on January 9, 1993, with the approval of the People’s Bank of China on August 28, 1992. It is a national joint-stock commercial bank headquartered in Shanghai. Shanghai Pudong Development Bank has built up a nationwide commercial bank operation and service network consisting of 41 branches employees. To find out more about Bank of Things and what Huawei does to drive this change, please visit here.

Featured image: edited from freepik

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Lending
Payments

Buy Now Pay Later Platform Split Has Processed RM 10 Million in Transactions

									by Fintech News Malaysia
January 21, 2021
0 comments

Split, a Malaysian Buy Now Pay Later (BNPL) platform, announced that it has processed RM 10 million in transactions for Malaysian businesses nationwide within months
The platform enables merchants to offer up to 3 interest-free installments to their customers who can use any debit or credit card from any local bank.
In their media statement, they added that over 250 Malaysian brands including Dyson, Switch, Lorna Jane and Gamer’s Hideout benefited from the increased traffic, higher sales conversions, and incremental revenue.

This news comes off the back of South East Asia’s growing interest in the Buy Now Pay Later space, with major players like Grab, Mastercard, Razer, and more.
The Split platform is backed by Silicon Valley-based 500 Startups and global talent investor Entrepreneur First.
Dylan Tan
“We want to disrupt the traditional credit card model by offering consumers an alternative that is accessible, interest-free and does not charge them penalties for having an outstanding balance. Malaysians will find that our model is very consumer-friendly and that’s entirely by design.

Split isn’t tied to specific banks. With one connection to us, merchants can immediately offer our BNPL instalments to consumers from all local banks. Ultimately, we aim to broaden the reach of our merchants, connecting them to as many shoppers as possible and vice versa,”
said Dylan Tan, Co-Founder of Split.

Featured image credit: Edited from Unsplash

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Payments

DuitNow QR Malaysia’s Universal Payment QR Now Widely Available

									by Fintech News Malaysia
January 27, 2021
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In a media statement issued by PayNet, the company announced that DuitNow QR is now widely available and multiple QRs on storefronts will soon be a thing of the past. They said that DuitNow QR is now offered by 26 participants with 15 banks and e-wallets to be added progressively over the next 6 months
DuitNow QR is established under Bank Negara Malaysia’s Interoperable Credit Transfer Framework (ICTF) and PayNet was mandated to implement the interoperable common QR standard for Malaysia.
Consumers can make payments by scanning the DuitNow QR code on their smartphone with payment going straight from the consumer’s bank or eWallet account directly into the merchant’s bank account. Payment is instant and real-time notification is also sent to both parties. DuitNow QR does not require customers and merchants to be customers of the same bank or eWallet. For merchants, reduced paperwork for reconciliation would enable them to unlock greater efficiencies and time savings.

Peter Schiesser
“In our efforts to promote cashless payments and encourage the use of digital payment methods that are more convenient, efficient and also hygienic, expanding the DuitNow QR ecosystem has been a high priority in our agenda. After the soft launch of DuitNow QR in 2018, PayNet has been onboarding banks and eWallet providers to enable their customers to pay using the mobile app of their choice,”
said Mr Peter Schiesser, Group Chief Executive Officer of PayNet.
“One QR code offers a better payment experience for both merchants and customers. Merchants benefit from improved efficiency as they just need to sign up with one acquirer (bank or eWallet) to accept all QR payments, thus avoiding multiple onboarding processes, displaying multiple QR codes over the counter and performing multiple reconciliations of separate QR statements. One QR code also simplifies payment for their customers. With higher adoption of QR payments, we would encourage merchants to contact one of the DuitNow QR acquirers (bank or eWallet) to get onboard soon,”
added Mr Schiesser.

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Payments

TransferWise Survey: 50% of Malaysians Cite High Costs of Remittances as a Challenge

									by Fintech News Malaysia
January 27, 2021
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A survey conducted by TransferWise, an online money transfer service, has shed light on how the COVID-19 pandemic has affected the remittance habits of those living in Malaysia.
The survey found that a whopping 50% of Malaysians find the high cost associated with remittances to be a challenge, which led to almost half of the respondents (48%) reducing the amount sent and more than one-third (35%) completely giving up on sending a remittance altogether.
These findings are the result of a survey that was conducted with 1,000 Malaysians who are largely within the 25-44 age group.

The speed of transfers is a key consideration for many Malaysian consumers, with 61% of those surveyed saying it was an important factor when choosing an online remittance service.
With more than one-third (32%) of the respondents opted to set up their remittance order in person at a bank while 54% of the survey respondents found not being able to visit a physical branch during the past 12 months a challenge due to the Movement Control Order (MCO) measure being implemented.
The long time needed to set up their remittance order was also an issue for 51% of them.
37% of Malaysians said that cost and trust was an important factor when choosing a remittance provider with four in 10 noticing an increase in the cost of sending remittances over the past year and half of them citing high costs as a challenge.
This had resulted in lesser amounts of remittances being sent by 48% of the survey respondents.

TransferWise Malaysia Country Manager, Lim Paik Wan said,
Lim Paik Wan

“The findings of the survey tell us that due to the pandemic and current Movement Control Order measures, the need for cheaper, faster, and more convenient remittance services have never been more necessary for Malaysians. Many surveyed said that not having access to a physical bank counter and the high costs of remittances were a challenge during the past 12 months.”

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WealthTech

Versa Launches an Alternative to Fixed Deposits in Partnership with Affin Hwang

									by Fintech News Malaysia
January 29, 2021
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Versa, a digital cash management platform, has announced the launch of their digital platform in partnership with Affin Hwang Asset Management.
Accessible as a mobile application, Versa said that its users can acquire returns that are similar to other low-risk deposit options with the flexibility of a savings account.
Versa is a recognised e-service platform with approval from the Securities Commission Malaysia (SC). This was made possible when the Securities Commission announced last year that they will amend the regulation allow for e-payment and e-wallet providers to sell capital market products. Currently there are two entities approved by SC as an e-service platform they are namely Versa and TNG Digital.

Versa said that its user-friendly interface and seamless onboarding process allows users to create an account within minutes. Versa provides a multitude of professionally-developed features that ensure the convenience and flexibility to manage funds digitally.
The Versa platform is connected to every bank in Malaysia through the online payment solution FPX, where users who would like to sign up for a personal account can easily transfer a deposit from an external savings account to sign up with Versa.
Versa users can also benefit from the platform’s null lock-in period and return rates that are similar to the rates of other fixed deposits in the market allowing users to make full use of their idle cash.
In prioritising cash flow and liquidity, Versa account holders have the autonomy to withdraw their funds at any moment without incurring any penalties.
Additionally, Versa’s model excludes any sales, transfer and exit fees.
The Versa platform has officially launched on the 29 January 2021 and the mobile application is now available on the App Store and Google Play.
Teoh Wei-Xiang
“We are currently in an economic climate where average Malaysians, especially the younger generations, are paying more attention to their financial circumstances. Hence, we are grateful to have the full support of Affin Hwang Asset Management in launching Versa during these trying times.

Moving forward, we hope that Versa’s digital cash management platform can alleviate their financial worries, and introduce better and more practical investment alternatives over traditional ones such as fixed deposits and trading,”
said Teoh Wei-Xiang, Chief Executive Officer, Versa.
Teng Chee Wai
“Digitisation is a journey that Affin Hwang Asset Management will continue to embark on as we look to continuously innovate and serve our clients better. Against a low interest rate environment, the search for yield will continue to be a recurring theme for investors.

Our partnership with Versa will provide a solution for investors to diversify their investments and maximise the potential of their cash reserves in their portfolio,”
said Teng Chee Wai, Managing Director, Affin Hwang Asset Management.

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Digital Transformation
Financial Inclusion
Sponsored

Intelligently Manage Money with Mobility

									by Fintech News Malaysia
February 7, 2021
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Technology has been changing behaviour of people. Many are showing significance reliance on the Internet – mobile network in particular – more than ever. At the same time, technological innovations are led by such behavioural changes. Indeed, successful innovations need more than just insights. They are reflecting how people use technology, and thus change their habits.
Finance services industry is also evolving the way they are doing business, as many customers are turning online for their daily activities such as buying stocks, paying bills, or managing their savings and investments, etc. But more often than not, there is an increasing number of transactions are going peer-to-peer.
While these changes indicate the digital transformation along the existing fiscal regime, it also helps drive financial inclusiveness. World Bank has suggested that about 1.7 billion adults are without an account at a financial institution around the world.
“Because account ownership is nearly universal in high-income economies, virtually all unbanked adults live in developing economies,” the World Bank says. It is echoed by a Mastercard’s report published last year, showing that 15 countries account for over 60% of the global unbanked population, where 607 million people have a mobile phone, but do not yet have a bank account.
Boosting Financial Inclusiveness for the “Unbanked”
In the absence of proper banking services, people would usually go to some informal providers, including local lenders or unlicensed remittance services. While these services may allow these people – many are from low-income family – to enjoy some kind of financial services, they are exposed to serious risks without any proper legal production.
However, their easy access to mobile connection paves the way to the benefits of financial inclusion for them. As they go digital with their smart devices, these people can start building their financial foundation with the proper support of technology – that’s the mobile money.
Mobile money is not rocket science. As technology never stops to advance and improve user experience, this industry continues to boom. According to GSMA’s State of the Industry Report on
Mobile Money 2019, the mobile money industry had over a billion registered users, with close to US$2 billion in daily transactions.
“Economies are becoming increasingly dependent on digital technology, bringing to light the central role of mobile money in harnessing digital finance for sustainable development,” Mats Granryd, GSMA Director General, writes in the report. “Mobile money is accelerating progress towards the Sustainable Development Goals and is contributing to the economic empowerment of individuals and communities including marginalised groups and businesses.”
Ghana Embraces Digital Transformation in Banking Sector
Ghana is one of the forerunners among emerging countries to embrace mobile money strategies. Following the guidance of the World Bank, the government has revised its own financial market regulations in a bid to be financially inclusive for its citizens.
Since then, the mobile money service industry in Ghana has developed rapidly, as many mobile network operators have joined the financial sector with their own special capacity.
The banking sector has very much been disrupted by the change in the landscape, where lenders not only face challenges from their peers, but also have to compete with carriers.
This is how people’s behaviour drives changes in conventional organisations, as banks must need to be innovative in the financial services to stay in the business.
Ghana Commercial Bank headquarter
Ghana Commercial Bank (GCB) took up the challenges as early as 2018, where the lender kicked off its mobile money strategy.
Serving over six decades with more than 1.5 million monthly active banks accounts and some 180 brick-and-mortar branches, GCB believes that mobile money is inherently a banking service. It simply isn’t a concern for any carriers, in spite of how advanced their technology is.
GCB’s missions were simple. With mobile money strategy, the bank looked to expand its market share, changing Ghana’s people lifestyle cost-effective services, better banking experience and addition financial amenities. It also aimed to uplift the whole networks of Point-of-Service and Automatic Teller Machines.
Huawei Mobile Money Solutions Make Global Presence
Huawei’s solutions fit perfectly with GCB’s vision on the development of overall mobile money industry landscape. The tech giant provided GCB with G-Money, an updated mobile money platform which has since helped the lender build a new banking ecosystem, and now serves as the foundation of the bank’s digital transformation.
Upon an open banking framework, the solution has formed a new service ecosystem and linked further innovations of the business model. Its open cloud and micro-service architectures supports elastic scaling and continuous optimisation of service processes.

By commercialising the G-Money mobile money platform. GCB has gained 60,000 new customers in a single month — ten times its previous month’s figure. By April 2020, there were more than 700,000 mobile money users, marking a major success for the bank and the sector.
In fact, mobile money is no longer a product for just a few selected markets. Instead, it has become a global phenomenon, witnessing astonishing growth particularly in emerging markets and extending its reach to a wider range of customers.
As of 2019, mobile money has had 290 services across 95 countries, with 372 million active accounts. Many governments and financial institutions consider that as the path to financial inclusion in most low-income countries.
For more information, please visit: here

Featured image credit:Business photo created by creativeart – www.freepik.com

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Blockchain/Bitcoin

Kenanga Dips Its Toe in Crypto With Tokenize Xchange Stake Acquisition

									by Fintech News Malaysia
February 8, 2021
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Kenanga Investment Bank Berhad (KIB) via its wholly-owned private equity arm, Kenanga Private Equity Sdn Bhd, has entered into a conditional agreement to acquire 19% equity interest in Tokenize Technology (M) Sdn Bhd, a digital asset exchange that allows trading of cryptocurrencies.
Operating under the brand Tokenize Xchange, it is one of the three licensed digital asset exchanges (DAX) by the Securities Commission of Malaysia (SC).
KIB said that it has been “building a digital ecosystem to offer our customers a wide spectrum of financial products and services, including digital assets” and is “pleased to be given the opportunity to invest in one of the three licensed digital asset exchanges in Malaysia”.

Tokenize Xchange was initially launched in Singapore by founder Hong Qi Yu in 2018 and reportedly has a customer base of over 100,000.
Hong had later on set up Tokenize Malaysia to focus on the Malaysian market. In June 2019, Tokenize Malaysia was awarded a Recognized Market Operator (RMO) license to operate by SC and its platform, Tokenize Xchange, went live in April 2020.
Datuk Chay Wai Leong
“While we are keen on crypto as an asset class, we are aware of the volatility and the proliferation of unregulated players in the market. We applaud the Securities Commission as one of the first in Asia to introduce regulations in this area. Our interest in digital assets goes beyond Bitcoin and other commonly traded cryptocurrencies.

We believe that the technology behind digital assets is very powerful and the emergence of digital assets in the future is inevitable. We are hopeful that fund raising through the tokenisation of businesses and assets will be a significant part of the capital markets in the future for Malaysia.”
said Datuk Chay Wai Leong, Group Managing Director of Kenanga Investment Bank Berhad.
Hong Qi Yu
“We are very pleased to welcome onboard, Kenanga Investment Bank Berhad, one of the leading investment banks in Malaysia, as a key investor. The combined reach, expertise and resources is game-changing and will allow us to scale our presence in Malaysia.

Together we will shape the digital asset landscape and build an exciting path forward for investors in the country,”
remarked Hong Qi Yu, Chief Executive Officer, Tokenize Malaysia.
This investment in Tokenize Malaysia adds to the line-up of digital initiatives KIB has embarked on over recent years.
This includes its most recent one in February this year where it acquired i-VCAP Management Sdn Bhd, a Shariah-compliant investment management services provider primarily focused on Islamic exchange-traded funds (ETFs).
Additionally, KIB embarked on a joint-venture with Japan based Rakuten Inc to introduce an online stock trading platform in Malaysia, Rakuten Trade.
It also recently acquired a stake in Merchantrade, Malaysia’s leading e-money player and the country’s largest Money Services Business operator, following Kenanga’s recent collaboration with them to introduce Malaysia’s first stockbroker e-wallet, Kenanga Money.
Kenanga has also announced a partnership with digital supply chain financing company, Bay Group Holdings Sdn Bhd, with the rollout of a robo-advisory platform that will automate investment portfolio for clients in the pipeline this year.

Featured image: Kenanga tower

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Insurtech

Fi Life Partners AXA Affin to Offer Online Medical Insurance

									by Fintech News Malaysia
February 10, 2021
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AXA Affin General Insurance Berhad (AXA) has partnered with Fi Life, a Malaysian insurtech startup, to offer online medical insurance complete with an e-medical card.
The products offered by them are SmartCare Optimum and SmartCare Optimum Plus.
AXA said that this is the first online medical insurance in Malaysia that allows for substantial annual limits for medical claims of RM100,000 all the way up to RM2.1 million. Prior to this launch, the highest annual limit for medical insurance that can be bought online is RM250,000.

This was made possible because Fi Life incorporates AXA’s full medical underwriting process within its online application system.
With these products, customers will have to answer online questions on their medical history to get medical insurance and an e-medical card immediately.
Unlike other online medical insurance, customers with certain prior medical issues are not automatically rejected. Customers will be asked for details of their medical issue and given the opportunity to upload their doctor’s or other medical report to see if they can still obtain medical insurance. In these situations, their cases will be considered by AXA underwriters on an individual basis. If all uploaded documents are complete, AXA said that its underwriters will be able to make a decision within 5 days.
In addition to a straightforward acceptance or decline, Fi Life claims that its online underwriting system is flexible enough to give an acceptance with exclusions, or an acceptance with a premium loading.
Further, in relation specifically to the online SmartCare Optimum plans, customers are able to opt to pay for the first RM 7,500, RM 10,000, RM 15,000 or RM 20,000 of medical expenses in return for a 25% to 50% discount on premiums. These plans are suitable for customers who already have a basic medical plan through their employers but would like a higher claim limit by supplementing their employer plan with their own individual plan.
With a 41% penetration rate of medical insurance plans in Malaysia in 2019, Fi Life believes that medical insurance is essential to safeguard Malaysians against unexpected hospitalisation and surgery expenses. Such expenses from private hospitals have been increasing at a runaway rate of 17% per year.
Emmanuel Nivet, Chief Executive Officer of AXA said,
Emmanuel Nivet
“At AXA, we are committed to be a trusted partner to our customers. As one of the largest global insurers, we are constantly innovating our products and services to deliver fast, secure and simple online insurance solutions that cater to customers’ needs.

We are delighted to have Fi Life with us in building an efficient online ecosystem, and we truly believe our synergy in launching Malaysia’s 1st online medical insurance is an innovative step forward to ensure customers’ experience is made more convenient and accessible.”

Featured image credit: Edited from Unsplash

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Payments

Tranglo Makes Its Foray Into Africa and Latin America

									by Fintech News Malaysia
February 17, 2021
0 comments

Tranglo, a Malaysian cross-border payment specialist, announced 4 new payment corridors in Nigeria, Ghana, Uganda, and Brazil, marking the fintech’s first foray into Sub Saharan Africa and Latin America.
Tranglo said that it aims to play its part in lowering the cost of remittances in these regions.
According to World Bank data, Sub Saharan Africa is the costliest region to send remittances to, averaging 8.5% to send USD 200 in the third quarter of 2020, while it costs an average of 5.8% to send the same amount to Latin America.  For context, the United Nations Sustainable Development Goals calls for the reduction of transaction costs to 3% by 2030.

Nigeria, Ghana, and Uganda ranked 1st, 2nd, and 7th respectively in the list of top 10 largest remittance recipients in the region in 2020, according to World Bank estimates. Collectively, remittance inflows for the 3 countries totaled USD 25 billion, or 43% of the total value.
Tranglo’s network there includes major digital wallets, instant banking, and cash pickups.
Meanwhile, remittance inflows to Brazil were about USD 3 billion in 2020. Despite forecasts of the global decline in remittances due to the COVID-19 pandemic, Latin America was surprisingly resilient, in particular Brazil, which registered no contractions throughout the year.
With 75% of remittances in Latin America coming from the US, Tranglo had first expanded to the North American market through partnerships with market leaders and integrating their cross-border infrastructure with Tranglo’s API.
Tranglo’s network in Brazil includes direct bank transfers and cash pickups.
Supported by local and foreign partnerships, Tranglo’s proprietary single interface platform is available in over 23 countries.
Jacky Lee
Jacky Lee, CEO of Tranglo said,
“It is just the first of many to come. We are already planning to expand into countries like Mexico and Argentina next, bringing our cross-border payment solutions to even more businesses in the region and beyond.

We are also focusing on enhancing e-wallet support to stay ahead in the digital economy, so stay tuned for more exciting development this year.”

Featured image credit: Edited from Unsplash here and here

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Payments

BigPay Introduces Cash Top Up in All 7-Eleven Stores Across Malaysia

									by Fintech News Malaysia
February 17, 2021
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Digital banking aspirant BigPay announced that it is expanding its range of financial services with the launch of cash top up at all 7-Eleven stores across Malaysia.
They said that over 1.3 million of BigPay’s Malaysian users can now top up their account at any of the over 2,400 7-Eleven locations nationwide.
BigPay said that it aims to provide all consumers access to mainstream financial products usually only offered by retail banks, but at lower costs efficiently.

The company is also looking to launch a range of new products, including personal loans, insurance, and wealth management. On the personal loans front, BigPay recently secured an online money lending license from the Ministry of Housing and Local Government.
In September 2020, BigPay launched its services in Singapore as part of its continued regional expansion.
BigPay has also expressed interest in applying for a digital banking license in Malaysia and other markets and is actively evaluating the right approach.
Salim Dhanani
“Ensuring that everyone has access to digital banking services is central to our mission and allowing cash to be seamlessly transferred to a BigPay account is a big step in that direction.

7-Eleven has more locations than most banks have branches in Malaysia. This gives BigPay a unique advantage when it comes to providing financial services across the country.”
said Salim Dhanani, Co-Founder of BigPay.

Featured image credit: Unsplash

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Digital Transformation
Fintech Opinion Leader

Platform: The Strongest Foundation for Faster Digital Transformation in Banking

									by Luc Hovhannessian, Managing Director, APAC, Finastra
March 1, 2021
0 comments

The last year has brought many changes, including the large and rapid shift towards digital which has also seen banks accelerate their transition to the cloud. This shift has been a good thing, as the cloud has many benefits – from lower total cost of ownership to easier access to innovation that will help banks provide superior customer experiences, not to mention the added bonus of all security and infrastructure management being managed by the cloud provider.
Perhaps most importantly, the cloud prepares banks for the future. Banks based on the cloud can more easily connect to third party platforms through open APIs, enabling them to tap the expertise fintechs and opening up a world of new opportunities. This has never been more important as banks of all sizes compete for the attention of increasingly digitally savvy customers.
How to approach transformation?
Even before the pandemic, banks were already facing fierce, increasing competition from non-bank players such as fintechs, big techs and other third parties. Add to this the acceleration towards digital caused by the pandemic, and we have an environment for banking that necessitates a solid strategy for digital transformation.

One way some large banks are opening the door to the future is by building their own platforms to facilitate Banking-as-a-Service (Baas). This approach sees banks opening up to give third parties access to data via APIs, which enables the development of innovative new products and services that they can also leverage. But the challenge for any bank in building a proprietary platform is made more complex by the need to ensure integration and interoperability with existing legacy systems, while also simultaneously creating a more flexible DevOps based architecture. This is both expensive and time consuming.
Fortunately for banks that want to avoid this level of investment, it is possible to connect to existing third-party platforms such as Finastra’s FusionFabric.cloud. Finastra’s platform for innovation frees banks from the burden of managing and running the platform themselves – allowing them to focus on what really matters: delivering a great banking experience to customers.
FusionFabric.cloud connects banks and fintechs in a way which benefits everyone. Fintechs gain access to a huge market, whilst banks are able to access and deploy innovative apps from fintechs that have been tested and, in many cases, pre-integrated with the core banking systems they are already using. This enables faster implementation, meaning banks can respond to demand and offer reliable new services more quickly.
Thanks that embrace the platform approach and open up to third party collaboration through BaaS also open the door to another exciting business model, embedded banking. Whereas traditional banking involves a customer seeking out a bank to interact with its services, embedded banking involves a non-bank player, such as a ride-sharing operator or online retailer, embedding financial services directly into their customer journey. This means a customer buying a car through an app, for instance, could apply for finance with the app, smoothing out the process by providing the necessary financial service when and where the customer needs it. This area is exciting because it offers the potential for banks to reach new audiences and achieve scale, without the investment normally required to acquire new customers.
The level of competition for customers’ attention has never been higher. Incumbent banks are now having to fend off competition from neobanks, and the industry is seeing more and more non-bank entrants taking market share in specific areas such as payments and lending. It is therefore imperative that banks adopt a platform-based approach to maximise the opportunities available to them.
To explore this topic in more detail Finastra has commissioned research with Aite Group on the Pathways to Competitive Advantage in the Era of Digital Transformation. We will also be sharing the key findings during a panel session, Accelerating through change – technology as a catalyst for open innovation, at Finastra Universe APAC on March 3 – register now to watch the session live at 12pm, or on-demand until April 2.

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WealthTech

From Fintech Fund to Crypto Exchange — What’s Next On Kenanga’s Digital Roadmap?

									by Vincent Fong
March 12, 2021
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The name Kenanga Investment Bank has been plastered across headlines recently, a shift from its previously media-shy nature.
Backed by 45 years of history, Kenanga is the largest independent investment bank in Malaysia with RM 14 billion Assets Under Management (AUM). To get a sense of Kenanga’s digital roadmap and end-game with all these recent moves, we spoke to their group managing director Datuk Chay Wai Leong.
The Journey So Far
Kenanga’s digital journey began in earnest in 2016 with the formation of a partnership with Japanese internet giant Rakuten Group that eventually led to the launch of Rakuten Trade in 2017.

The joint-venture was deemed successful as Rakuten Trade reported profitability within 3 years of operations. Their advantageous position as being the only fully digital equities broker especially during a time where the pandemic had restricted consumers’ ability to physically open an account with traditional institutions played a big role in their growth.
Since the start of the Movement Control Order by the Malaysian government, Rakuten Trade saw a growth of over tenfold in new account opening compared to the previous year. To date, they have roughly 180,000 accounts with 10,000 new accounts on average every month and they have over RM 3 billion in Assets under Administration.

This was then followed by a series of initiatives to shore up their internal digital capabilities which includes the digitalisation of their back office and the launch of its remisier portal.
2020 was the year where it became clear that Kenanga is intensifying its digital efforts, from securing an approval in principle to operate a robo-advisory platform from the Securities Commission Malaysia to launching a Visa card enabled e-wallet with Merchantrade. Datuk Chay explained that many of their investors prefer not to withdraw money from their platform because they don’t want the hassle of depositing money again when they want to buy stocks.
He revealed that there’s roughly RM 1.8 billion in trust money on both the Kenanga and Rakuten Trade platforms. The move is intended to enable their investors to more easily utilise funds from their stock trading account to perform retail transactions and remittances through this new e-wallet.
The investment bank also entered into a partnership during the same year with P2P supply chain financing platform CapBay to set up an Islamic supply chain financing joint venture.
What’s more notable to many industry observers is Kenanga’s recent acquisition of a 19% stake in Tokenize Xchange, one of the three crypto exchange platforms approved to operate in Malaysia.
“Local players seem to have shied away from the crypto space, we see a lot of potential here judging from the fast pace of development overseas especially in the US”
Datuk Chay, explained during out interview.
Most recently the group announced a joint fund with Malaysia Debt Ventures where the two parties intend to invest RM 300 million into fintech startups in Malaysia.
Their efforts in digitisation seems to have borne fruit so far as the group reported record profits for the financial year of 2020 with a net profit of RM 102.1 million, up nearly four-fold from the previous financial year.
What’s Next in Kenanga’s Digital Journey?
Datuk Chay explains that for the next phase of their journey, they are focused on establishing a leadership position within the retail market. Based on their rough estimates, they believe the Malaysian retail market to be valued at RM 2 trillion.
Part of their strategy to appeal to a wider audience in the retail market begins by enabling Rakuten Trade users to trade foreign shares in 2021. While many find Rakuten Trade to be a convenient platform, one of the main gripes that investors have is the lack of foreign stocks which limits their ability to diversify beyond their Ringgit basket.
The introduction of foreign stock trading will likely attract more new investors onto their platform and increase the trade volume of existing users as well. In 2022, Rakuten Trade will also be looking to introduce crypto trading onto their platform as well.

On the crypto-assets front, Datuk Chay laid out the investment bank’s ambitions in applying for IEO license with the regulator. He sees a lot of synergies between their current business and the IEO space.
An IEO, short for Initial Exchange Offering, is a fundraising exercise conducted by an exchange platform. Explaining the IEO business case for Kenanga, Datuk Chay said,
“We have done billions of fundraising on behalf of clients using unconventional instruments. We have monetised real estate, we have monetised stock portfolios. This is a game changer, we can tokenise all these transactions and people can trade on it.”
He further added,
“We believe that the potential for fundraising through tokenization of businesses and assets is huge. It will offer an alternative to raising funds on the stock exchange”
They are also looking at launching their robo-advisory platform called Kenanga Digital Investing in 2021 . While he did not reveal much details about the product, he seemed optimistic that it will be well received by retail investors.
Judging from the roadmap that was shared with us, it seems that Kenanga is doubling down on retail investors by offering a wide range of investment opportunities from traditionally low-risk assets like money markets to volatile assets like cryptocurrencies.

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Insurtech

Tune Protect Launches Its First Online Cashless E-Medical Card

									by Fintech News Malaysia
March 10, 2021
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Tune Protect Malaysia launched its first online cashless e-medical card, PRO-Health Medical, with growing awareness for medical protection, soaring healthcare costs and tightened wallets.
The e-medical card provides customers coverage for hospitalisation and surgical expenses including in-patient, daycare surgical procedures and outpatient treatments expenses due to illnesses and accidents.
Customers will also have access to the zero deductible feature which means that they do not have to pay upfront before receiving treatment.

The e-medical card can be used for cashless admission at more than 150 hospitals across Malaysia as well as reimbursement for alternative and chiropractic treatments post-hospitalisation.
PRO-Health Medical can be purchased by first time medical insurance customers or as a supplement to customers’ existing medical coverage.
There are four plan types with Annual Limits ranging from RM30,000 to RM150,000 to choose from according to customer’s needs. The product does not have a lifetime limit, which means that the annual limit is reinstated year-on-year.
PRO-Health Medical can be purchased online through its website or by downloading the Tune Protect App from the Apple App Store or Google Play Store.
The online medical insurance is available for Malaysians and non-Malaysians who legally reside in Malaysia, aged 18 years old to 45 years old and can be renewed up to the age of 65 years.
The first 1,000 customers who purchase PRO-Health Medical in the month of March 2021, will have access to a year-long mental wellness programme with Naluri, a digital therapeutics solution.
They will also have access to lump-sum allowance for mosquito-borne diseases, Covid-19 additional medical expenses of up to RM20,000 per diagnosis until 31 December 2021.
Tune Protect also made a charitable pledge to Yayasan Chow Kit to provide children from less privileged families with access to healthcare for every policy sold.
William Foo
William Foo, Chief Executive Officer of Tune Protect Malaysia highlighted,
“Today’s digitally savvy customers thrive on convenience and simplicity. They are health-conscious, sensible and realistic in managing their expenses. These insights spurred the features of PRO-Health Medical as a comprehensive, budget-friendly plan that is easy to understand.

Sign-up takes less than 5 minutes and claims are hassle-free via our Tune Protect App which also hosts the e-Medical card for cashless admission.”

Featured image credit: Edited from Unsplash

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Insurtech

Malaysian Insurtech Ouch! Raises RM 1.5 Million in Seed Funding

									by Fintech News Malaysia
March 15, 2021
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Ouch!, a Malaysian-based digital insurance platform, announced that it had raised RM 1.5 million in a seed funding round from Vynn Capital and Temokin, along with a few angel investors.
With the funding, the Ouch! team will be focusing on further product and business development to prepare a stronger foundation for growth.
Ouch! added that it will be improving its platform and service for users and will be rolling out more features and upgrades to the platform across the year.

Ouch! has a simple and intuitive interface where customers can choose from 5 insurance categories; medical, life, travel, motor, and home with curated insurance options from Allianz, AXA, and Etiqa to select from.
The insurtech claims that customers can get a quote for their insurance plans within 5 minutes at any time of the day.
Ouch! has plans for an app revamp and update scheduled for early April this year. Additionally, Ouch! is also looking to raise a pre-Series A funding later in 2021.
Shazy Noorazman
“This funding will allow us to build upon our current infrastructure to roll out more features to our customers for an even more holistic experience. We should always be prepared for rainy days, and with the pandemic having devastating effects on people’s lives, I believe there is no better time to educate ourselves on the importance of insurance.

With Ouch!, insurance can be more accessible than ever before. With our platform, we hope that Malaysians will be more confident in insurance to protect their assets and their future instead of being intimidated by it,”
stated Shazy Noorazman, CEO of Ouch!.

Featured image: Ouch! team

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E-Wallets
WealthTech

Principal To Offer E-Investment Solution Through Touch ‘n Go E-Wallet

									by Fintech News Malaysia
March 15, 2021
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Principal Asset Management Berhad has announced the launch of its latest product, the Principal e-Cash Fund to make investing accessible and easy for Malaysians.
The Principal e-Cash Fund will be made available soon through a landmark strategic partnership with TNG Digital Sdn Bhd, the owner and operator of Touch ‘n Go e-wallet.
In January 2021, the Touch ‘n Go e-wallet was the first to be granted a conditional approval to operate as a Recognised Market Operator (RMO) by the Securities Commission of Malaysia (SC). The conditional approval by the SC will enable TNG Digital to directly distribute capital market products.

Principal said in a statement that it is “committed to digital transformation to build holistic solutions that can help Malaysians save enough, have enough and protect enough to achieve their long-term financial goals”.
Principal added that it will “continue to work towards unlocking the full potential of digital solutions in addressing consumers’ ever-changing needs”.
In 2019, Principal introduced selected funds through Employees Provident Fund’s (EPF) self-service online investment platform i-Invest to encourage investors to invest digitally for their retirement needs.
Munirah Khairuddin
“I am excited about our partnership with Touch ‘n Go – with technology playing an increasingly pivotal role in every aspect of life, this long term partnership is set to accelerate the development of eWallet investment solutions for Malaysians.

Addressing the needs of Malaysians irrespective of their financial background, every Malaysian can now start to invest and inculcate the habit of invest, save and spend,”
said Munirah Khairuddin, CEO of Principal Asset Management.

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WealthTech

Kenanga Granted License to Operate Robo Advisor by Securities Commission

									by Fintech News Malaysia
March 16, 2021
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Kenanga Investment Bank revealed on Monday that it had received a Digital Investment Manager license from Securities Commission Malaysia. The newly granted license allows for Kenanga to operate a robo advisor.
Currently, there are 7 other companies in Malaysia with a Digital Investment Manager license namely; Akru, BH Global Fintech, GAX MD, Raiz Malaysia, StashAway, UOB Asset Management, and Wahed Invest.
Kenanga previously received an approval in principle from the regulator in 2020, they previously revealed to Fintech News Malaysia that their robo advisory platform will be named Kenanga Digital Investing and is slated for 2021 launch.

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WealthTech

Malaysian Retail Investors Return to the Fold on the Back Digital Acceleration and COVID-19

									by Vincent Fong
March 18, 2021
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Securities Commission Malaysia (SC) revealed during their annual report press conference today, that 2020 has seen heightened participation from retail investors.
Datuk Syed Zaid Albar, Chairman of SC shared with members of the media that this was evidenced by the fact that retail investors made up 32.4% of total value traded in the stock market, which is significantly higher than the 5 year average.

While he is pleased to see higher retail participation, Datuk Syed also cautioned investors to be savvy when trading during the press conference.
“However, we have to warn that investors must be able to make informed decision when trading, investors must be cognizant of the risk and opportunities involved when investing in the market. Be cautious of social media chatrooms that try to influence investors to buy or sell certain stocks based speculations.”
He further adds.
“Please do trade on fundamentals and not be swayed by rumors or FOMO.”
Statistics from the regulator showed that 75% of these accounts belonged to investors aged above 40 and 50% of retail trading volume was contributed by investors aged between 40-60.

Meanwhile, those below 30 are the least active demographic but sees the highest percentage of trade placed electronically.
The return of retail participation is definitely a welcome one, the 1997 Asian financial crisis has caused many retail investors to shy away from investments after suffering significant financial losses from the stock market.
The rise of popularity of digital investments platforms brought on by the pandemic coupled with SC’s efforts to democratise access to wealth management products were likely the main contributors to retail investors returning to the fold. Moving forward, the regulator also revealed that one of their key focus areas in 2021 is to expand the digital outreach to the older population.
Foo Lee Mei, Chief Regulatory Officer of SC also revealed during the press conference that 2020 has seen an increase of over 700% in new account opening for robo-advisors, 1000% new accounts for crypto exchanges with 450,000 accounts across the 3 regulated platforms, and the number of investors for equity crowdfunding (ECF) and P2P financing has increased from 20,000 to 30,000 in total.
Interestingly, ECF and P2P financing outperformed Venture Capital (VC) and Private Equity (PE) as a source of fundraising for companies in Malaysia with the total amount of funds raised via the former going up by 43% in 2020.

Datuk Syed noted that the pandemic has caused many VC and PE firms to take a “wait-and-see approach” especially during the early phases of the pandemic, with many of them shifting their focus towards ensuring the business continuity of their existing portfolios.
He added that the Movement Control Order also restricted these investors’ ability to conduct due diligence on the investees. However, he is cautiously optimistic the numbers will improve as we recover from this pandemic, maintaining that VC and PE firms will continue to play an important role in bridging the funding gap in Malaysia.
He also pointed out that ECF and P2P financing has proven themselves as a method of fundraising that is resilient to the current economic turmoil. With Prime Minister Tan Sri Dato’ Haji Muhyiddin bin Haji Muhammad Yassin announcing yesterday that the limit for equity crowdfunding has been lifted from RM 10 million to RM 20 million, ECF is anticipated to play a bigger role in fundraising for Malaysian companies in 2021.

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Digital Transformation
Fintech Opinion Leader

From Relationships to Platforms – the Shift in Corporate Banking

									by Torsten Pull
March 23, 2021
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Banking has undergone a major shift in recent years thanks to the advent and advancement of digital banking technology. This shift has also been accelerated by the COVID-19 pandemic, with lending, trade finance and cash management functions all under pressure to operate and serve in a digital-first environment.
New research from Finastra has shone a light on what this means for the industry. We found that corporate banks in APAC are moving away from a model where relationship managers build relationships with corporates in order to cross-sell additional services. Instead, banks are seeking to become digitally-powered ‘platform players’ that can offer their clients real-time analysis and execution.
Although this might sound like the end of the relationship manager role, it actually means that – through access to more accurate and relevant data – they will be empowered to make faster and better decisions.

In order to meet clients’ requirements for value-added services, real-time execution, and self-service, digital transformation has been elevated to an immediate-term priority for many banks. In our research, banks told us that their core focus over the next five years will be enhancing their digital capabilities, as well as positioning themselves as platform players, in order to automate and accelerate processes for their smaller corporate customers in particular. The benefits of this shift are clear: cost efficiencies, simple platform integration, cross-selling opportunities, and better compliance processes.
While the COVID-19 pandemic has accelerated the need for digital transformation, it has also exposed a number of gaps in banks’ digital offerings. Finastra’s research found that cloud technology and digital signatures are the main digital tools that banks do not yet have access to but require to function effectively in the current situation. E-documentation and cybersecurity were found to be particularly important for lending, while artificial intelligence was the main requirement for cash management.
Finastra’s research also uncovered several barriers to successful transition – particularly regarding investment requirements, regulation and data security – which the banks will need to overcome in order to meet customer expectations.
This is likely to require large-scale changes to banks’ operations and ways of working, but most banks don’t have the skills and resources to do this themselves, so many are collaborating with third parties. In fact, 75% of banks worldwide – 83% in APAC – are already working with fintechs or will be in the next year.
For me, the benefits of this approach are clear. Banks benefit from cutting-edge tech, at a much lower cost than developing it themselves in-house, and with a faster implementation time. Fintech solutions can also be upgraded easily, which future-proofs banks and saves costs.
Finally, but importantly, by managing integration with banks’ existing systems and ensuring standardization across the business, fintechs can help banks with two of their major pain points: regulation and data security.
The COVID-19 pandemic has forced and accelerated a change in the industry around digitalisation. Now, commercial and business banks must decide what type of bank they want to be and put in place a strategy to enable this business model change.
Finastra’s research has shown clearly that banks are moving away from a pure relationship-based model and looking at how they can better leverage technology to meet their customers’ needs, moving towards becoming platform players. For this to happen successfully, banks need to have a defined digital transformation strategy in place and, just as importantly, find trusted, flexible partners that can help them on this journey.

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