Digital Transformation

Banks and Insurance Companies: Go Digital or Go Home

									by Fintech News Malaysia
May 16, 2018
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Earlier last month, I had the pleasure of joining TM ONE’S BFSI Open Day as a panelist. Joining me was veterans from the TM ONE team and we discussed in depth the state of play for digital transformation in the banking and insurance sector.
L-R: Mahmoud Dasser, Chief Marketing & Partnership Officer, TM ONE Carol Wang, General Manager BFSI, TM ONE, Vincent Fong, Chief Editor, Fintech News Malaysia, Thaib Mustafa, Head, TM Applied Business
Digital Is No Longer a Matter of Why but How
The immediate consensus that the panelists reached is that we are far beyond the point of why banks and insurance companies should go digital but rather a more relevant question would be how. As it stands, statistics from the Department of Statistics in Malaysia shows that out of Malaysia’s over 30 million population, 16 Million of which are below the age of 35.
Which effectively means more than half of Malaysia’s population are digital natives. Thaib also chimed in by saying that 75% of the workforce are currently millennials. Beyond the typical narrative of the millennials’ love affair with all things digital, if we were to subscribe to the Diffusion of Innovation Model, we’re likely at the stage where the even the laggards have to some extent embraced the digital lifestyle.

Image Credit: Wikipedia
The narrative that digital lifestyle is no longer just for the young is further supported by data from the Malaysian Communications and Multimedia Commission which indicates smartphone penetration in Malaysia is at 70% and broadband penetration is at 84.5%.
Evolution or Extinction

Mahmoud expressed that no one is spared from disruption and that even in the telecommunication sector they are being disrupted themselves, he added while banks are being disrupted by fintech, the telecommunication space is being disrupted by the likes of Facebook and Whatsapp who do not have disadvantages of legacy systems. Mahmoud believes that having faced similar challenges as bank and insurance companies do, makes them a strong partner for the BFSI’s digital journey.
“TM invested on key digital enablers  such as data center, high speed connectivity, security and analytics to allow BFSI focus on their core business and new fintech innovations while outsourcing digital enablers to TM ONE.” Mahmoud added.
Digital First Mindset
The BFSI sector can no longer treat digital strategies as an afterthought, but rather embrace it as a core part of their strategy, this is perhaps best illustrated by digital only banks that are on the rise in both the Western world and in China as well.
Even in Korea we’ve witnessed phenomenal numbers during the launch of Kakao Bank by the messaging app Kakao Talk, which secured 820,000 customers in 4 days, to date they now roughly serve 5 million customers. Back home, the likes of CIMB are also adopting the strategy of digital only banks in emerging markets like Philippines and Vietnam.
The panelists also unanimously agreed that in going digital, the process has to be end to end, there is a certain amount of inconsistency when banks proclaim to be digitally focused when customers still have to visit the branch to open an account. This is where technologies like e-KYC will play huge role once BNM releases and industry wide framework following their e-KYC framework for Money Service Businesses.
Collaboration is The Way Forward, TM ONE Seeks Possible Partnership with Fintech

Carol emphasized that collaboration will be the way to move forward, she pointed at that despite the earlier hype of fintech eating the bank’s lunch, she and many other industry observers have instead seen many of them collaborating instead of competing
In that spirit, Carol also hinted at the possibility of TM ONE setting up a programme for them to collaborate and bundle their offerings to the BFSI sector. Given TM ONE’s existing clientele, this could prove advantageous for fintech startups with innovative solutions but with challenges penetrating the sector.

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Funding Societies Launches FS Bolt

Lending

Funding Societies Launches FS Bolt

									by Fintech News Malaysia
May 18, 2018
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Funding Societies, largest peer-to-peer (P2P) financing platform in Malaysia, has announced the launch of FS Bolt: a mobile microfinancing solution in the country that provides fast and collateral-free working capital financing for small and medium-sized enterprises (SMEs), with approval from Securities Commission Malaysia (SC).
FS Bolt offers up to RM50,000 in SME financing for companies incorporated in Malaysia, focusing on the micro SME segment. The app is available on both iOS and Android devices. The solution was previously launched in Singapore in 2017

FS Bolt boasts an application process that takes a mere two minutes to complete. Its automated credit assessment enables decision time in 24 hours. The process from approval to disbursement similarly only takes 24 hours – making FS Bolt among the fastest source of working capital financing in Malaysia. Besides an emphasis on speed, FS Bolt also focuses on flexibility for its users, whereby SMEs would not be charged interest on early repayments and hence lowering their interest cost.
Alternative finance providers such as P2P financing helps to address the challenges faced by unserved and underserved SMEs. For example, these SMEs typically lack credit history, collateral, and comprehensive financial documents required by traditional institutions when applying for financing. FS Bolt considers the various aspects of SME needs by incorporating automation and highly intelligent systems to include non-traditional datasets into the firm’s credit assessment processes, rather than focusing only on collateral requirements and conventional finance reports.
Wong Kah Meng, CEO,Funding Societies Malaysia
“We are very excited to launch our microfinancing product here at home in Malaysia. It has always been our mission to drive financial inclusion and improve the livelihoods of SMEs by helping them grow their businesses through greater access to financing. We have identified the micro SME segment to be the most underserved segment in Malaysia when it comes to access to financing as they are typically perceived to be too risky or too costly to serve by traditional institutions. Through our mobile application, micro SMEs would be able to easily and quickly apply for collateral-free financing through streamlined documentation requirements and processes,” said Mr. Wong Kah Meng, CEO of Funding Societies Malaysia.
Funding Societies also offers longer-term SME financing and invoice financing services with quantums of up to RM500,000. As Funding Societies’ most recent innovation, FS Bolt expands the company’s offerings and shows its continued commitment to serve Malaysia’s SME sector by improving access to financing.

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Payments

Grab and Maybank Ties Up to Drive GrabPay

									by Fintech News Malaysia
May 22, 2018
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South East Asia’s ride hailing giant, Grab and Malaysia’s largest bank Maybank, has announced their partnership to drive the acceptance and usage of GrabPay in Malaysia. This partnership also involves collaborative efforts to drive merchant acquisition.
Maybank’s Malaysia customers will soon be able to use the GrabPay mobile wallet to conduct both payments at Maybank’s key merchants, and to top-up their mobile wallet directly from their Maybank2u accounts
Grab secured its e-money licence from Bank Negara Malaysia in December last year, and it is reported that they will be launching a beta version of GrabPay in Malaysia in the coming weeks. Beyond just mobile wallets Grab has also previous announced its grand fintech ambitions which is primarily geared towards financial inclusion and insurance.

Prior its partnership with Grab, Maybank has also gone into a partnership agreement with AliPay in early 2017.

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Digital Transformation
WealthTech

Behind The Scenes: Rakuten Trade, Malaysia’s Fintech Company of the Year

									by Fintech News Malaysia
May 30, 2018
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Fresh off the back of winning the Fintech Company of the Year award earlier in 2018 and celebrating their one year anniversary, we spoke to Kaoru Arai, Managing Director, Rakuten Trade to get a better sense of why they became Fintech Company of the Year and their value proposition.
Who is Rakuten Trade?

Established in May 2017, Rakuten Trade is Malaysia’s only fully digital equity brokerage, the company was formed as a result of a joint venture between Rakuten and Kenanga Investment Bank. A partnership which signalled increased collaboration between incumbents and fintech companies in Malaysia.

Rakuten Trade is a regulated entity which holds a restricted Capital Markets Services License issued by Securities Commision Malaysia. Which essentially means they are permitted to deal with securities and provide investment advise in Malaysia. In their first year of operation, Rakuten has secured 12,000 customers.
Why Malaysia?

In the earlier days, Arai mentioned that the Rakuten Group was scouting for potential ASEAN countries like Indonesia, Vietnam, Thailand and Singapore for Rakuten Trade to call home before finally deciding on Malaysia early last year.
One of the key factors to the decision was the conduciveness of the regulatory environment, Arai was quick to sing praises about Securities Commision Malaysia’s progressive approach towards innovation and he pointed out that  Malaysia had the most advanced regulatory environment for eKYC, which was essential to a Rakuten Trade’s mantra of being fully digital.
On top of that, he mentioned that the timing was also impeccable as Securities Commision Malaysia was actively looking at utilising fintech to democratise access to investment product. That’s when the Rakuten team were also in discussions with Kenanga who was also actively look into embracing fintech into their overall strategy.
Arai said that Kenanga was an ideal partner as they have expertise with the local market and regulation which enables Rakuten Trade to focus on their digital capabilities.
Being a Fully Digital Equities Broker

Their claim to fame is that is often being touted, is being Malaysia’s only fully digital only brokerage. The entire process of signing up for a new account to actively trading can be completed within two hours. Typically a process like this can take up to two weeks for approval. One interesting fact that Arai pointed out was the fact that this process is even faster than the one they have back in Japan.
While the trend of digital brokerage is still relatively nascent in Malaysia, in Japan 90% of the retail investment market are captured by digital platforms like Rakuten. Arai believes that similar trends will land on Malaysian shores soon.
“In Rakuten Securities we define a fully digital brokerage as one without any sales person or branch, a completely seamless online process, which allows us to offer aggressively better rates for our clients” said Arai.
His statement is also backed by the fact that they have one of the lowest brokerage fees in the market which starts as low as RM 7 and goes up to a maximum of RM 100. He emphasized that because Rakuten Trade was built from the ground up, they are not hindered by legacy issues or organisational politics, which allows for them to be more agile and design the business around their customers.
Democratising Investments for the Masses

The low brokerage fee enables the masses to be actively investing, a segment that often overlooked by the incumbent player. Rakuten Trade’s focus into the mass market is made evident by their numbers, where 40% of the traders that joined their platform are first time traders.
Unsurprisingly, being a digital platform 80% Rakuten Trade’s user base consists of those who are below the age of 40. Cognizant of the fact that many of their users are first time traders, Arai stressed on the importance of simplicity.
His team actively ensures that they avoid using too much jargons in the daily reports and investment advice that they send to their clients.
Loyalty Ecosystem

In August 2017, the company launched their rewards ecoystem which was 1st of its kind in Malaysia that encompasses 3 leading loyalty solution providers namely; Bonus Link, Air Asia Big Loyalty, and B Infinite.
When users take a specific action like trading, referring friends and transferring shares users will be rewarded with RTrade Points which they can then convert their points to any of the 3 providers.
“We are sponsors for the Barcelona Football Club.. If, Barcelona wins the game, you can get double the points” said Arai
“..and they usually win,” he quipped
Future Plans
In 2020, Rakuten Trade aims to capture 20% of the retail market share, beaming with pride Arai said he was confident that these numbers can be achieved.
He also hinted at the possibility of looking at adding in the option overseas portfolio for the clients, he mentioned that this option will be evaluated after their are satisfied with the domestic growth. However he emphasized that there is no definite timeline for this and that it would also largely depend on regulatory approval.
When asked about how Rakuten plans to respond to the possible threat of robo-advisor in light of Securities Commission Malaysia’s Digital Investment Manager framework, Arai feels that it will not be a threat to their business and that it will likely serve as funnel to their platform for customers who are looking for a more active trading strategy.
He also did not rule out the possibility of rolling out their own robo-advisory platform if there’s demand from the market. He added that it is perfectly within their capability to do so since their affiliate company Rakuten Institute of Technology has been spending considerable resources in developing their deep learning capabilities and algorithms in Japan.

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Banking
Digital Transformation

Digital, Data, Disruption: CIMB Pledges RM 75 Million to Its 3D Academy

									by Fintech News Malaysia
May 30, 2018
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36,000 workforce to be trained
A combined total of estimated 2 million staff learning hours
Aims to equip staff with digital competencies like UI/UX design, data science, and entrepreneurial thinking

CIMB Group has pledged RM 75 million over the next three years to the CIMB 3D Academy which stands for digital, data and disruption. According to a statement by the bank the CIMB 3D Academy is aimed at helping CIMB embrace the Fourth Industrial Revolution (4IR) to propel its digital ambitions via a Group-wide people development initiative.
The Group aims to equip its 36,000-strong workforce – across all levels and categories – with digital knowledge and skills appropriate to their jobs, by end-2019, through an estimated two million staff learning hours.

The 3D Academy’s objectives are three-pronged: to enhance the digital quotient in all job roles; to enable the Group’s digital transformation; and to build an agile, innovative, tech-savvy workforce across the board. To this end, its competency framework will be anchored on various
pillars including digital world awareness; agile & entrepreneurial thinking; and data science & analytics / data-driven decision making.
Tengku Dato’ Sri Zafrul Aziz, Group CEO, CIMB
Tengku Dato’ Sri Zafrul Aziz, Group CEO, CIMB Group said, “As a leading ASEAN universal bank, CIMB has always prioritised our most valuable asset, our people. With the 4IR fast eclipsing existing digital revolution, we want to make CIMB the most powerful incubator possible for the development of talent, to propel the Group’s next growth phase. In tandem with the digitisation of our core with a data-first principle, the CIMB 3D Academy is a crucial component to help us develop a workforce with the right skillset to help achieve our digital ambitions.
Through the Academy, our staff will be trained for agility, adaptability, creativity and an open mind to, among others, think like an entrepreneur and disrupt conventional thinking, in order to identify and reap opportunities to improve the Group’s value proposition for our 13 million customers and stakeholders across ASEAN.”
The Academy will spearhead digital training with the goal of enhancing the Group’s business powered by improvements in competency, mindsets and relationships within the workforce. A core group of roles to be developed include emerging ones such as agile leader, agile coach,scrum master, scrum product owner, and tech geek. Other digital-centric roles include data scientist, data engineer, data analysts, design thinker, UI/UX designer, as well as digital marketer.
The 3D modules, which will be conducted primarily through a digital and interactive platform, will be developed both in-house and by external curriculum developers.

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Regtech/Regulation

Malaysian Fintech Startups are Well-Positioned for Regional Expansion

									by Fintech News Malaysia
June 1, 2018
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Amidst rising interest in fintech, startups in this vertical have been dished a rude awakening to abide by tightening guidelines and protocols set by regulatory institutions. Disregarding stricter protocols, such as e-Know Your Customers (e-KYC), could be detrimental to all startups looking to compete in the fintech arena. To bridge the knowledge gap, the Financial Technology Enabler Group (FTEG), established by Bank Negara Malaysia (BNM), has organised quarterly regulatory bootcamps to educate industry players on evolving customer identification and verification procedures.
The recent regulatory bootcamp curated by DOJO KL coworking space focused on Guidance to e-KYC in Malaysia. Supported by the Malaysian Digital Economy Corporation (MDEC), the panel featured representatives from BNM and Securities Commission, a data scientist, as well as founders from Jirnexu and MoneyMatch – both approved participants of BNM’s regulatory sandbox.
Nascent Industry and Stringent Regulations a Litmus Test
Hann Liew, cofounder of Jirnexu, recounts the challenge of digitally onboarding bank and insurance agencies in the past, at a time when there were limited technology and processes to enable new applications. At the same time, Jirnexu had to match digital onboarding and e-KYC requirements in Malaysia with the existing rules posed by BNM for offline face-to-face verification, as the competition in the aggregator space heats up, it pushed them to build XpressApply from scratch. This full-stack proprietary tech platform powers Jirnexu’s financial product comparison websites, RinggitPlus (Malaysia) and KreditGoGo (Indonesia).

Having recently closed US$ 11 million for their Series B funding round, Hann credits the robustness of Malaysia’s national identification system as the motivating factor behind Jirnexu’s product scale-up. “Our challenge is to go as far as possible to match the precision of the current Customer Due Diligence standard set by BNM and get as close to the success rate of biometric identity confirmation.”
Bank Negara Sandbox Has Helped Nimble Startups
Over a year ago, BNM unveiled their regulatory sandbox to support innovative financial solutions. Approved startups are given 12-months to testbed their ideas and solutions but is 12-months too short a period to accomplish anything?
Quite the opposite was experienced by Adrian Yap, co-founder and CEO of MoneyMatch. He believes that fintech startups stood a better chance, “What we have as startups, relative to banks, is the agility and flexibility to react and innovate much faster from a technological and developmental standpoint.”
As one of the pioneer participants of the regulatory sandbox, MoneyMatch – a full digital cross-border remittance service provider – was given the freedom to run and test their services with BNMs full support which led to the birth of the current e-KYC legislation. However, Adrian cautions against taking unfair advantage of the sandbox, “To enter the BNM sandbox your business model must not fall within the confines of a traditional business model. It is not a loophole but a testbed for new financial solutions.”

Bank Negara e-KYC Accepts Facial Recognition
Before the development of the updated e-KYC policies in November 2017, Money Service Businesses (MSB), including remittance businesses, required face-to-face verification during first-time transactions to comply with CDD standards. Since then, BNM has green-lit the implementation of non face-to-face verification by remittance businesses applying e-KYC processes.
The control standards of non-face-to-face, identification and facial verification must be set against independent and credible sources such as, The National Registration Department (JPN) and the Immigration Department database. During MoneyMatch’s 12-month tenure in the sandbox, the company has evolved from conducting multiple video conferences to manually verify potential clients, to adopting an Artificial Intelligence (AI) powered third-party facial recognition application.

Startups Face a Trade-off Between Cost and Security

(From left): Azrina Azmel AGM, Securities Commission, Zarifa Izan ,Deputy Director, Bank Negara Malaysia, Author, Jack Chan Co-Founder, Dojo KL, Adrian Yap Co Founder, MoneyMatch, Hann Liew Co-Founder Jirnexu and Faris Hassan, Data Scientist
Despite increasing developments in high-end ID verification technology, fintech startups still find applying and adhering to e-KYC protocols challenging. The price-tag of incorporating superior verification solutions easily deters the average startup who are either up to their necks with funding issues or budget constraints. On the other hand, security concerns present a similar setback. Data scientist Faris Hassan adds, “With facial recognition technology being targeted towards more well-established companies, startups looking to invest in subpar applications will have to compromise on data security.”
After all, one of the use cases of e-KYC is to prevent identity and credit fraud through the digital channel, a commonplace recurrence plaguing local financial businesses. Fintech startups have to tackle this issue head on, a sentiment shared by Liew who says, “Building a robust digital ID verification system is a challenge equally faced by all fintech startups in Malaysia.” He further explains that although XpressApply itself is not part of the Sandbox, the technologies and processes sitting behind it fulfils most of the identity and security requirements provided within BNMs existing regulatory frameworks.
While it is normal for startups to perceive compliance as a setback, it plays an integral and unavoidable role in the fintech industry when executed appropriately. Not only will client drop-off rates reduce, it could significantly bolster the credibility of a fintech startup. Similar to the Yerkes-Dodson Law governing the relationship between stress and performance, i.e. optimal stress gives birth to optimal performance, case in point fintech startup stressors originate from constantly required compliance. Malaysia has exhibited signs that it is primed for fintech startups to kick-start a digital reform, or in this case to remove the mundane task of filling out forms.
This is a guest post by Jack Chan

Jack Chan is the Cofounder of DOJO KL, a dynamic coworking space in Kuala Lumpur. Tech In Asia’s KL Chapter Lead. Ex-Numbers guy in an Investment Bank, now he is more excited on how Tech & Businesses Impact Lives.

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Lending

Maybank Ranks Highest in Auto Financing Customer Satisfaction

									by Fintech News Malaysia
June 6, 2018
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A recent study conducted by research firm J.D Power shows that Maybank ranks highest with an overall satisfaction score of 77.3%. CIMB Bank is a close second with a score of 77% followed by Hong Leong Bank 75.6% who ranks third in the study.
Since the study was fielded in March and April 2018, it might not reflect potential improved customer satisfaction from the recent launch of CIMB’s InstaApproval, which approves auto loans almost instantaneously.
The 2018 Malaysia Auto Consumer Finance Study is based on responses from 2,504 new-car buyers who financed a vehicle in the past 12 months.

The study measures customer satisfaction with the products and services provided by their auto finance provider. The study measures overall satisfaction in six key factors: interaction (33%); onboarding (22%); billing & payment (17%); finance deal (10%); origination (10%); and finance advisor (8%).
Customers Prefer Digital Channels
Although most customers still apply for their auto finance by filling out paperwork, these customers are less satisfied than those applying onlin , according to the J.D Power
Two-thirds of customers who apply online have their applications approved within two business days compared with 42% of customers applying with traditional paperwork. The approval time for applications is one of the main drivers of satisfaction. Overall satisfaction is higher among customers who receive an auto finance approval within two business days than those waiting for three or more business days

Anthony Chiam
“..It is interesting that there are currently only a few providers offering online auto finance applications. Moving the process onto a digital platform can go a long way in meeting the needs of customers and improving their overall experience, particularly as 82% say they prefer a paperless application process for their next auto finance product.” said Anthony Chiam, Service Industry Practice Leader at J.D. Power.
The study also finds that satisfaction is higher among customers purchasing Islamic auto finance products (25%) than among those purchasing conventional auto finance products. Satisfaction among customers purchasing Islamic auto finance has increased since last year.
Following are additional key findings of the 2018 study:

Interest rates are key when selecting auto finance provider: More than one-fourth of customers say the main reason for selecting their finance provider’s auto finance deal is because of the interest/ profit rate. This has increased by 5 percentage points from last year (21% vs. 26%, respectively).
Financing directly vs. dealer financing: Of the 32% of new-vehicle buyers who finance their purchase directly through a finance company, satisfaction is higher than among those going through a dealer to arrange financing
Opportunity to deepen relationship with the customer: Among customers opting for an auto finance provider that is different than their primary bank, 17% of those who are delighted with their auto finance experience say they “definitely would” switch their primary banking relationship to their finance provider.

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Digital Transformation
Insurtech

RHB Insurance Mobile App Enables Customers to Purchase Policy in 3 Minutes

									by Fintech News Malaysia
June 7, 2018
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RHB Insurance Berhad (“RHB Insurance”) launches “RHB Insurance Mobile App”, which enables its customers to purchase motor insurance policy and road tax with just a single end-to-end mobile enabled application.
RHB Insurance Mobile App, allows users  to complete the purchase of their motor insurance policy in three 3 minutes, among the fastest in the financial industry.
Through this app customers are  able to obtain a quotation for their motor insurance policy,  opt to renew road tax, comprehensive insurance coverage for their vehicles and as well as access round-the-clock auto assistance at the touch of their smartphone screens.

Kong Shu Yin, MD, RHB Insurance,
“We are confident the RHB Insurance Mobile App will be a catalyst in transforming the way customers purchase and monitor their insurance as well as roadtax renewal with just a single app. This effort is in line with our digital transformation programme focusing on delivering value-added interactions, which will empower our customers,” said Kong Shu Yin, Managing Director, RHB Insurance Berhad.
“We have built our mobile app on a digital ecosystem that will allow our customers, our agents and other business partners to interact with one another in a seamless way. Our target is to generate 10% of our gross written premium from the digital channel in 3 to 5 years,” he added.
For the fourth quarter ended 31 December 2017, Motor Insurance remained the business’ largest contributor delivering 33% of total gross premiums. RHB Insurance provides general insurance for retail and corporate customers. It is the 10th largest insurer in Malaysia with 4.3% market share for Gross Direct Premium and ranks Top 10 insurers for fire and Top 5 insurers for medical and health coverage. RHB targets to be among the top 5 insurance providers in the market by 2022.

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Lending

FICO Powers Credit Guarantee Corporation’s (CGC) SME Lending

									by Vincent Fong
June 25, 2018
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Malaysia’s Credit Guarantee Corporation (CGC), a government and commercial enterprise joint venture, has used FICO’s decision management technology to improve its ability to judge the creditworthiness of small businesses so it can provide them with loans.
This direct lending is an expansion of CGC’s usual role of providing loan guarantees to businesses, many of which lack the collateral and track record to obtain regular financing. Since its deployment of FICO® Blaze Advisor® decision rules management system and custom analytic models in August 2016, CGC has reduced non-performing loans to just 3 percent of the loan book and has had only one default.

For its achievements, CGC has won the 2017 FICO Decisions Award for Decision Management Innovation.
The introduction of the decision management solution was necessary to ensure a more accurate prediction of customers risk and pricing, to improve the turnaround time and reduce defaults. Previously most of the business rules or loan eligibility criteria were checked manually by CGC for each of its micro, small and medium business applicants, which made for a slow and non-standardized process. However, with the launch of the new direct lending products these business rules and loans would grow in number and require rapid and reliable processing.

“The decision management automation provided by FICO has been a leap forward for our business,”
said Perbagaran a/l K. Kuppusamy, Chief Risk Officer at CGC.
“Previously we were requesting bureau and demographic data, receiving it in a physical format and then aggregating it so that our risk team could assess the data based on bureau rules and determine eligibility for particular schemes.
With FICO Blaze Advisor and FICO analytics, this time-consuming and tedious process has been cut from weeks to two or three days, and we have a more accurate risk assessment of each customer.”
FICO developed multiple segmented analytic models which analysed 1000’s of variables specifically for CGC’s portfolio to achieve a better way of assessing risk.
Integration was built between the CGC origination system, the credit bureau and an anti-money laundering solution to automate eligibility criteria as well as score the applicants’ risk. In addition, CGC customers’ behavior patterns were taken into account to judge and rate the existing customers. This formed the behavior models determined by the customer’s track record, period of engagement with CGC and other criteria.
Daniel Mayo
“The complexity of the solution Credit Guarantee Corporation built and deployed made it stand out among this year’s FICO Decisions Awards contestants,”
said Daniel Mayo, chief analyst for financial services technology at Ovum, one of this year’s FICO Decisions Awards judges.
“CGC’s ability to play a developmental role in supporting the country’s economic development agenda can only be enhanced by this project.”

Dattu Kompella
“Empowering an organization such as CGC to be as entrepreneurial as its customers has been truly satisfying,”
said Dattu Kompella, managing director in Asia for FICO.
“CGC’s achievement in its decision management clearly shows how automation can deliver a transformative change among businesses – streamlining processes, saving time, and improving overall efficiency.”

Featured image via fico.com

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Banking
Lending

OCBC Partners up with P2P Lender Fundaztic to Enhance Financing Access for SMES

									by Fintech News Malaysia
June 26, 2018
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OCBC Bank and Fundaztic, P2P lending platform licensed by the Securities Commission have entered into a collaborative agreement to enhance access to financing for micro, small and new businesses which forms the largest base of SMEs in the country currently facing difficulty to obtain funding for business growth.
The effort will see OCBC Bank referring to Fundaztic, viable SMEs needing business financing but does not fulfil the current risk appetite of the bank such as having insufficient track records as required. This follows a similar move by UOB Bank in partnering with Funding Societies earlier this month
According to OCBC Bank Chief Executive Officer Dato’ Ong Eng Bin, the Bank has long supported the SME community and this effort represented another way of partnering meaningfully with viable business that might not easily qualify for standard bank loans.

Dato’ Ong Eng Bin,CEO, OCBC Bank
“With the emergence of peer-to-peer financing platforms, opportunities that were previously unheard of are now available. However, there continues to be a gap between those in need and those in a position to meet the need. We are delighted to play our part in bridging this gap through our partnership with Peoplender (Fundaztic),” he said.

Since its launch Fundaztic has successfully disbursed closed to RM15 million in funding to more than 170 SMEs of which, more than 50% are businesses that are 3 years or lesser in operations.
Kristine Ng, CEO, Fundaztic
“As an online platform in a new industry that is barely one year old, the ability to reach out to all viable SMEs is limited.This is why the collaboration with OCBC is promising as the bank have a much wider reach in terms of their branch network across the country as well as their human resources.
This collaborative effort will definitely be a win in terms of enhancing access to financing for SMEs and strengthen the lending ecosystem which will, in turn, boost the economy” said Kristine Ng, CEO of Fundaztic
Once OCBC has passed the details of the SMEs to Fundaztic, the SMEs shall be further contacted by Fundaztic’s team to guide them on the application process which is fully online.  Therefore, SMEs across the country would be able to gain the opportunity to raise funding via this new, alternative platform anytime, anywhere across any devices.

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Malaysia
WealthTech

Robo Advisors Are Coming To Malaysia, Here’s Why You Should Care

									by Fintech News Malaysia
July 2, 2018
1 comment

I’ll admit, I was a tad disappointed when I first learned that robo advisors aren’t some form of Jarvis or a virtual Alfred. That being said, actual robo advisors are still quite an interesting type of technology—no really, I’m serious here.
Robo advisors are a form of artificial intelligence, but their value proposition lies in their ability to automatically pick out stock investments based on the kind of investment portfolio you’d like to have.
Cutting Out The Middleman
This is meant to serve as an alternative, or even a supplement to human-run investment portfolios. Through these robo advisors, consumers can more directly interact with their investments, and put in less effort to boot.

If you’re an average joe who wants to start playing with stocks, you may have no earthly idea where to begin. Robo advisors are one way to jump into the game, as using them can be cheaper than dealing with brokers.
In fact, you can use robo advisors to do micro investments instead of shelling out the big bucks immediately.
Anyone Can Get On It
The key appeal: you won’t have to babysit your investments all the time. The algorithm should ideally calculate the probabilities and the market conditions for you. This way, you can just put money into a self-guided online system, and watch it steward and grow your money for you.
Your own time spent on your robo-investments are low, as the algorithm should help you to allocate your money into different investment assets. There is no need for meetings with brokers or reading through difficult to understand annual reports.
Basically, it’s the passive income dream that is often promoted on scammy Facebook pages or WhatsApp chains, but made real.
For the price and convenience though, you’ll be trading away a more personalised portfolio specifically catered for your lifestyle and preferred investments. You’ll also have to look at separate avenues for cash flow management and retirement planning, which a human financial advisor might be better equipped help you with.
The Natural Rise Of Robo Advisors In Malaysia
The smaller price tag and reduced entry barrier have raised the popularity of robo advisors in the market—and Malaysia is no different. Or at least, we might start seeing robo advisors courting our ringgit soon.
Fintech News has it on good authority that there some robo advisors from Singapore looking to tap into the Malaysian market. These are some of the potential suspects that may become more familiar to us in the future.
There are even talks of a local player that might be launching into the market soon.
The Securities Commission Already Has An Eye On It
There are no local players that have taken the scene by storm yet, but even since November 2017, the Securities Commission has already thought of a regulatory framework for robo advisors.
Tan Sri Ranjit Singh, Chairman of the Securities Commission of Malaysia announced that the first licenses for what is named the Digital Investment Framework Management. They were looking at issuing these licenses sometime mid-2018, which is pretty much now.
The goal is to protect investors by requiring specific conduct from any players interested in operating locally.
Some of the requirements include having a “competent person within the company” who actually understands the risks and rules of the algorithm used, and written policies that ensure the algorithm is tested every so often.

“One of the core needs of millennial investors is the need for regular savings, even in small amounts, to be channeled towards investing for the future” said Tan Sri Ranjit Singh.
As a millennial myself, I am as stated, guilty of not having a substantial amount of savings. Luckily though, a 2017 report published by The Star reveals that more young investors are jumping into the stock trading market.
Bursa Malaysia revealed that there was a 36% jump in the number of Central Depository System (CDS) account holders who are 25 years old and below, for one thing.
So our investment future may lie in the hands of robots, but as is normal with any type of investment, it’s important to remember that you shouldn’t invest any money you can’t afford to lose.
Other than that, think of this as another avenue for starting your millennial investment journey.
Image Credit: This video published by Will Smith on YouTube.

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Insurtech

4 Reasons Why Insurtech Matters for Malaysians

									by Fintech News Malaysia
July 3, 2018
0 comments

Insurtech, is one of the latest buzzwords that has entered into the fintech lexicon. For those unfamiliar with the field, one might reasonably question whether it genuinely adds value to society or it’s just another buzzword whose sole purpose is to help startups raise funds and to help highly paid consultants to sound fancy during their conference presentations.
While insurtech in Malaysia is still nascent, there is much value it can add to the Malaysian society. Here are a few ways:
Making Information More Accessible
Insurtech can make insurance a lot more accessible by enabling customers, for instance, to educate themselves. Insurance policies are largely framed in complex terminology, creating a language barrier which can cut a consumer off from buying a product simply because they may not understand what they are buying. This is especially true for first time insurance buyers who may find the entire process and swathes of jargon to be highly intimidating.

The gap is bridged in part by insurtech providers who provide platforms for consumers to access information. Aggregators like Ringgitplus and GoBear, for instance, presents the information for customers to compare in manner that’s more layman friendly.
They also enable consumers to contrast policy schemes, according to factors such as coverage terms and payments plans. Because most of the numbers are broken down for customers, this effectively also breaks down the information barriers.
Lowering Price Barriers
According to the Department of Statistics of Malaysia, the average Malaysian earns RM2,880 per month, and with income being at a relatively low level, Malaysians find it to be increasingly difficult have enough income set aside to be able to purchase insurance.
Which is why it made sense that a survey conducted in 2017 by iMoney and The Edge, found that around 70% of survey respondents desired more affordable insurance premiums.
However, the traditional heavily agent distribution model of insurance in Malaysia, disincentivises insurance agents to sell insurance packages that are too low in price points, as it results in lower commissions.
Insurtech companies that are focused on digital distribution like PolicyStreet by design are a good fit for mass distribution of insurance products that are more affordable. This model when executed correctly will likely increase the ratio of Malaysians covered by insurance.
However this game is not exclusive to startups, we have observed that insurance companies are beginning to shift some of their distribution to be more digitally focused, in addition to that we’ve also observed more partnerships emerging between traditional insurance players and insurtech companies and even telcos. Sun Life’s collaboration with U Mobile, for instance, is one example of a partnership which has the effect of offering a purely mobile health insurance product for an affordable sum.
Unbundling Insurance Products
Micro insurances that are offered contextually are becoming more popular abroad, as consumers our protection needs are sometimes very specific and does not necessarily fit within the comprehensive policies offered by insurance companies.
Again due to the pricing model of these insurance products, they are not necessarily well suited for the traditional distribution. Companies like Neosurance are attempting to suggest the right policies at the right time using push notifications. For example, a consumer who is travelling abroad will receive a notification asking if they would like be insured for their travels.
In doing so in the example mentioned and beyond, this effectively ensures that consumers receive wider range of coverage to protect them against financial uncertainties. It is also interesting to note that Neosurance was part of the Supercharger 2017 cohort in KL and is now attempting to introduce this concept in Malaysia as well.
Shaping Healthier Behaviours
Future consumer behaviour is likely to be shaped by the current direction insurtech is already taking in promoting healthier lifestyles.
Better driving habits, or  instance, are encouraged through AXA’s use of telematics in its ongoing FlexiDrive product, which rewards auto insurance holders with a 20% discount on premiums should they be considered safe drivers. Allianz Malaysia, along with Etiqa Insurance and Etiqa Takaful have also signed a memorandum of understanding with telematics company Katsana to develop Katsana’s telematics app, DriveMark. Ultimately the aim is for drivers to be incentivised enough by the rewards to keep within certain safety benchmarks.
Incentives to promote better wellbeing are also being offered by insurance providers through their products. One example is AIA’s Vitality plan, which allow customers to earn app-based points from fulfilling a checklist of healthy activities. This earns them discounts on a variety of products and services offered through AIA’s partners. The higher the points they earn, the better the rewards.
Through all these insurtech initiatives, Bank Negara might closer to its goal of a 75% insurance penetration rate among Malaysians by 2020. Insurtech, after all, helps to achieve Bank Negara’s slated objectives of gradual removal of operating costs, diversification of distribution channels and strengthening of the insurance market practices. This can only benefit customers more in the long-term.
Featured Image Via: Freepik

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Digital Transformation

TM ONE in Pursuit of Fintech Partnerships

									by Fintech News Malaysia
July 23, 2018
0 comments

TM ONE, the business solutions arm of Telekom Malaysia Berhad (TM) has announced their commitment in collaborating with the fintech sector in a closed-door session they hosted in collaboration with MDEC held recently at DOJO KL.
This announcement follows the hints that was made during their BFSI open day that TM ONE is potentially looking at partnerships with fintech companies.
Who They Are Looking For
During the session, Carol Wang, General Manager, Banking, Financial Services and Insurance, TM ONE stated that they have identified 10 key fintech used cases under the Banking and Insurance vertical that TM ONE is keen on establishing partnership with, as illustrated below.

She also pointed out that while they have identified these 10 core areas for the fintech companies to begin with, they are also open to look at other potential partnerships areas with the fintech companies to jointly address additional domains and specific customer needs.
 Why Should Fintech Companies Work with TMONE
Mahmoud Dasser, Vice President for Marketing, TM ONE expressed that fintech companies can greatly benefit from TM ONE’s strong existing relationship with the banking and financial services as well as other vertical industries such as real estate, retail and logistics where fintech is changing the game.
There are many reasons why Fintech should consider collaborating with TM ONE and join hands in bringing innovative and secure solutions to market at scale.
As a digital enabler, TM ONE can provide a powerful access to market with its Customer Relationship Management (CRM), marketing and distribution capabilities, as well as many Fintech Infrastructure enablers such as Mobile Services, Data Centers, Cloud, Security and IoT services.
He added that fintech companies are welcomed to jointly build customised innovative solutions or bundle their solutions along with TM ONE to deliver stronger offerings catering specifically to the financial institutions in Malaysia.

Beyond that, he shared that as a digital enabler for various other verticals like smart cities, real estate and retail, fintech companies partnering with TM ONE can tap into their existing ecosystem to accelerate their solution into the market.
An insurtech company offering micro-insurance can for example, tap into TM ONE’s Connected Home solution and provide contextualised insurance coverage to homeowners who are leaving for an overseas trip to purchase travel insurance and extra coverage for their homes.
Another interesting use case that Mahmoud brought was that, TM ONE through their Connected Shopper solution, can partner up with rewards based platforms or digital wallets to push their promotions in shopping malls or even in major airports in Malaysia.
The ability to reach end-users can sometimes be a challenge with the limited funding made available to fintech startups. So through partnership with TM ONE, they can obtain the right digital solution catering to their budget.
In certain cases, where needed Mahmoud also expressed an openness towards setting up a strategic partnership along with a comprehensive due diligence process in place.

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Regtech/Regulation

Securities Commission Malaysia Welcomes New Applications for ECF and P2P Lending

									by Fintech News Malaysia
July 5, 2018
1 comment

The Securities Commission Malaysia (SC) has announced that it welcomes new applications for Equity Crowdfunding (ECF) and P2P lending. This follows their previous call for more industry participation during their Annual Report press conference earlier this year.
This announcement signals Securities Commission Malaysia’s continued interest to use alternative investment platforms like Equity Crowdfunding (ECF) and P2P lending to democratise access to investments.
To date there are 6 approved operators under the Equity Crowdfunding (ECF) category and similarly 6 approved operators under the P2P lending category. Applicants have by 7 September 2018 to submit their documentation for registration.

Update: We’ve been informed by Securities Commission that there’s an additional license granted for Equity Crowdfunding to Funnel Technologies Sdn Bhd, effectively making total ECF players 7 in Malaysia. The full list can be found here

The Equity Crowdfunding (ECF) and P2P lending platforms have shown relative success having conducted 1,000 successful campaigns to raise a total of RM118 million worth of capital. This has benefited more than 300 micro, small, and medium enterprises (MSMEs) in the country thus far.
Based on a previous report done by Fintech News Malaysia, Pitchin is seen to be leading the Equity Crowdfunding (ECF) segment, while Funding Societies is seen to be leading the P2P lending category.

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Blockchain/Bitcoin
Crowdfunding

Is Khalid Samad’s Harapan Coin ICO Legitimate?

									by Fintech News Malaysia
July 10, 2018
0 comments

Both the political and the cryptocurrency spheres alike are talking about the Harapan Coin, a donation token endorsed by Khalid Abdul Samad—our current Federal Territories Minister. It was created as a fundraising coin for the Pakatan Harapan coalition to combat Barisan Nasional in the 14th General Elections.
According to Malay Mail, Khalid has expressed an interest in bringing up the Harapan Coin, originally a personal project, in an upcoming PH Presidential Council’s next meeting.
At the time of writing, the Pakatan Harapan government has not expressed any opinions or endorsement of the Harapan Coin, apart from Khalid Samad who intended to use the coin to garner donations for his Parti Amanah Negara, member of the Pakatan Harapan coalition.

After all, the government would probably not want to endorse a coin if the regulatory body has consistently had a “buyers beware” stance on cryptocurrency
Seeing that the Harapan Coin is a relatively unique presence in any market, we thought that it would be worthwhile to look into this coin that has recently garnered interest, and outline some discoveries.
Here are our findings:
Disclaimer: The Harapan Coin was initially issued to raise funds prior to the Pakatan Harapan victory at GE14, and there are no discussions on whether they will continue it or not. All information presented is about the coin’s intentions before the elections.
1. The Website
The coin came into being partly because it was otherwise difficult for those outside of Malaysia to transfer large sums into the then-opposition’s wallet. BNM would curb any suspicious transactions from coming in overseas, according to one of the core team members of Harapan Coin.
The Harapan Coin website indicates that out of the intended  US$120,000,000.00 they hoped on raising, they gained a total of USD2,548.44.
That’s less than 1% than the amount they hoped to raise.
There was interest in turning the Harapan Coin into a legitimate currency in Malaysia, but this is probably unlikely any time soon, as BNM and Securities Commission has not expressed any endorsement or legalisation of cryptocurrency be it as payments instrument or a securities token at the time of writing, and seem wary of raising ICOs in Malaysia.
Another noteworthy mention is that the Harapan Coin is paired with USD, and sold in packages. While in most cases ICOs are paired with ETH it is not uncommon for some to be tied with USD
Screenshot from the Harapan Coin website
2. The Video

Based on Khalid Samad’s statement in the video, 30% of the funds were to be given to the developer, 30% for the Parti Amanah Negara, and the rest was to be given for Pakatan Harapan.
Though in a Facebook post, the developers claim that they will not be taking their own cut of the donations raised.
Some netizens have wondered about the legitimacy of the video. The editing choices that would have made it easy for an unscrupulous scammer to put words into his mouth. As far as Fintech News Malaysia is able to verify though, the Harapan Coin is indeed endorsed by Khalid.

Dear crypto holders, if you wish to help us for this coming GE14. Please support #HarapanCoin. We know them, they are genuine.https://t.co/wykC7rmoeg
Againts Kleptocracy through Cryptocurrency!
— Khalid Samad (@KhalidSamad) April 16, 2018

3. The White Paper
Screenshot from the Harapan Coin white paper.
The first issue we found when delving into the white paper is that it takes 22 pages before you get to any concrete information about the Harapan Coin, or HRP. The white paper was seemingly too concerned with explaining the Malaysian political history in detail, and outlining a beginner-friendly guide on decentralisation, ICOs, and why blockchain is incorruptible.
Many ICO white papers choose to assume that people already understand what those in the know consider basic information. For example, when we looked at HelloGold’s ICO white paper, it only takes them 2 pages of backstory and company information before they delve into technical details of the coin.
That being said, we admit that this practice is not unheard of. DAOstack’s successful ICO, which only took 66 seconds to sell out, detailed what blockchain and decentralisation actually means, though they did also go into more technical details about the coin later on, which the HRP notably lacks.
Considering that this coin is intended for those already interested in Malaysian politics, perhaps it could have stood without a crash course into Malaysian political history, and instead focused on the problem at hand that the HRP was trying to solve as well as the underlying technology.
4. The Marketing
It was always made clear that the coin exists for donation purposes, rather than rewards. One of the core team members reportedly wanted to send in a “huge amount of money” for GE13, but Bank Negara stopped the money from reaching Malaysia, in a bid to stop suspicious money coming from overseas.
This Harapan Coin was intended as a decentralised solution that could circumvent such problems.
And with the general elections coming up at the time with a deadline, the intended recipient might not have the time required to go through the bureaucratic red tape to get those donations in time, which perhaps in Khalid’s thoughts, necessitated the coin.
That being said, some of the more recent marketing strategies do concern us slightly, particularly with statements like “Harapan Coin will fly high. Do not regret for not buying now!” posted on the 6th of July.
Screenshot of their Facebook page.
Since the Harapan Coin was always intended to be a method of donation, the rewards structure is a tad unclear and perhaps pending Khalid’s talks with the ruling government.
5. The Team

Since the coin’s inception, the Harapan Coin team has remained mysterious, which according to their website is “for utmost security as not wanting to be tracked by BN Malaysia’s special branch department, we have no choice but to blur our facial pictures”.
The flags accompanying each name and blurred photo seem to indicate where these developers are currently residing in. We doubt that the authorities in these countries would allow the then-ruling Barisan Nasional government to take action against these individuals as long as they are there. That being said, we could perhaps give them the benefit of the doubt that they’d rather be safe than sorry.
###
All in all, this coin ended up appearing more legitimate than we initially anticipated when we first heard of it. That being said, we also understand why the coin might not have been as celebrated as the team and the minister might have initially hoped.
A mysterious team perhaps did not help matters much, ringing ‘scam’ bells for many who would otherwise be interested. And with a white paper that was vague on the technology underlying the coin, investors were predictably unsure, and perhaps fearing that their donation would go into the pockets of scammy developers, held back.
It bears repeating that BNM wants Malaysians to be wary of any ICOs they may want to buy. As such, it might be unwise for a political coalition to affiliate themselves to a cryptocurrency.
So Khalid Samad may have the best of intentions when the Harapan Coin promises were made, but others in the ruling government might not be too keen on it.
It’s heartening to see someone in the administration looking into new technology, but it would perhaps be fruitful to study what are some triggers into the new market one is exploring, and how you would present yourself as a legitimate extension of your efforts.
Featured Image Credit: Yahoo News Singapore

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E-Wallets
Payments

How Many E-Wallets is Too Many E-Wallets In Malaysia?

									by Fintech News Malaysia
July 20, 2018
14 comments

I don’t think there are any concrete lines we can draw about how many e-wallets in Malaysia is more than neccesary, but I would argue that over 40 is far too many for one ecosystem. And that’s just the ones that we found.
There is much ado about e-wallets in Malaysia recently.
Just recently ride-hailing giant Grab launched GrabPay in Malaysia. WeChat Pay’s entry into Malaysia is notable as the first foreign currency that the wallet is opening its doors to. Based on recent interviews, Malaysia will probably remain one of the few countries for WeChat Pay.

Razer Pay gained 300,000 Malaysian downloads in just a span of 48 hours.
This doesn’t preclude local players from making their own stake in the market. We have, Touch ‘n Go making their foray into e-wallets with Alipay’s help, while other players like Boost, BigPay, Sarawak Pay, Kiple and many others are fighting for a slice of that pie as well.
We just published a report revealing that 17% of Malaysia’s fintech companies are e-wallets: in sheer numbers, they are second only to payments companies.
E-wallets have become such a phenomenon in Malaysia that even companies that didn’t deal with payments before are jumping into wallets. There is (arguably) FavePay, Grabpay, AEON, quite a few telcos and many others making their own attempts.
With BNM gunning hard for a cashless society, we can definitely see the appeal of launching an e-wallet in Malaysia. It is a particular focus in BNM’s ICTF which has just taken effect early this month, and should impact key e-wallet functions like remittances, e-payments, and QR codes.
An E-Wallet’s Competition Isn’t Just Another E-Wallet

Global trends demand that Malaysia turn cashless into king, but here’s the problem for e-wallets—Malaysia already has an existing cashless system that many are familiar with, and this system is called cards.
If BNM more strictly enforces the rule that prohibits merchants from setting a minimum transaction fee for cards payments, you should theoretically be able to buy that RM1.50 pencil without using cash at all. This solves one of the key problems with cashless adoption, and all it a takes is a firmer hand.
Meanwhile, card usage was a hurdle that China’s e-wallets never had to jump.
Due to late card adoption, China was able to go straight from cash to e-payments without the need to wean the Chinese off a card-dependency. Therefore to the Chinese public, there was a real argument for convenience that more easily moved them into the arms of e-wallets.
When you combine this with China’s e-commerce boom and the heavy use of WeChat in China, the ecosystem was fertile land for e-wallets Alipay and WeChat Pay to turn into giants.
Local e-wallets meanwhile, have to contend with the existing conventions of just swiping a piece of plastic.
And this is on top of the sheer amount of Malaysians that simply opt for online banking.
To add insult to injury, many e-wallets are asking Malaysians to add one more step to their payment process. Instead of just handing over their plastic, Malaysians are asked to first transfer money into their e-wallet, then only are they able to pay for things.
It’s a relatively simple step, but when you add even one layer of complication for a consumer, it could be a huge barrier that prevents them from hopping aboard.
So until Malaysians actually get on board that e-wallet train, the development teams behind them will continue bleeding money to drive adoption—like offering discounts, incentives, zero merchant fees, having a high marketing cost, among other tactics.
In a worst case scenario though, Malaysia’s wallets could remain almost-empty. It won’t be the first time this happens.
Too Much Competition Hinders Malaysian Adoption Rate

It’s been psychologically proven that too many choices could hinder adoption.
A study shows that an extensive array of options can at first, seem very appealing to a consumer. But too many choices ended up diminishing their later motivation to buy.
This isn’t unique to Malaysia. Over in Singapore, the digital payments scene there sees criticisms for being “too confusing“.
Minister-in-charge of the Smart Nation Initiative Vivian Balakrishnan in Singapore characterised Singapore as “a victim of its own success”, as “it already has a fairly good system that works”.
Sounds familiar to the Malaysian ecosystem, doesn’t it?
The situation is made worse when there is no one “general e-wallet” that is accepted by most merchants, and every shop a user walks into could all partner with a different wallet each.
To combat this prediction though, the local scene is still rife with opportunities. With a nation that is mostly banked, and a mobile banking penetration of 40.1%, the wallet that successfully reaches cardless Malaysians with an e-wallet education could be the one to thrive.
Until then though, Malaysians might be confused and less likely to adopt the new technology.
But what if the one true e-wallet never emerges, and Malaysia ends up fragmented by different wallets? That will be another hurdle for our regulators to tackle, and might complicate the scene in Malaysia.
This is a shame, because:
 There Are User Benefits to Porting to E-Wallets
Image Credit: MPay
A cashless society is one that is easier for a government to regulate. It isn’t plagued by fake money, and all transactions are recorded in a database that a government can more easily keep tabs on. India’s push towards cashless, for example, was a drastic move to curb corruption, tax evasion, and inefficient yet expensive banks.
On the consumer’s side, e-wallets offer you real-time spending data. Instead of waiting for your monthly statement and being surprised by how much you’ve spent, a mobile wallet allows you to access real-time data of your ongoing spending.
Being aware of one’s spending could help raise financial literacy that is sorely lacking among Malaysian youths.
Data from the reigning e-wallet could—with the consumer’s consent—go into an app that helps someone keep track of their financial goals. And the user wouldn’t have to manually input this data either, as the app should be able to gain this data and incorporate it in real-time.
You can read up more about the Payment Services Directive (PSD2) in Europe for more information on this, and its potential impact.
As for more straightforward conveniences, it’s a lot easier to split the bill between friends, and remitting money could be practically free on e-wallets.
Local state-endorsed wallet Sarawak Pay has these functions as part of their vision for their wallet’s future.
There Is Still Hope for the Future of E-Wallets
For every steadfast card user, there will be a young Malaysian that will only ever know a market that offers both card and e-wallet. It is the youth that is more inclined to actually try new or interesting technology.
Over time, the young technology adopted by an equally young userbase could grow to become a norm. If e-wallets play their cards right (ironically), they could tap into this trend as a long-term plan for sustainability.
Until then, wallets have to keep bleeding to reach that lucrative future.
Since existing conventions may slow down the trajectory of e-wallet adoptions compared to China, unfortunately, Malaysians may have to contend with the saturated market until a couple of them reign supreme.
In my opinion, the wallet that can achieve supremacy in Malaysia is probably one that can directly draw payments from a user’s bank account even when their wallet balance is zero. Either that, or one that offers good discount rates that will attract bargain hunters onto the platform.
Convenience, and discounts. No better way to open Malaysian eyes to the potential of e-wallets.

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Crowdfunding

3 Malaysian Crowdfunding Projects That Are Shaped by Nationalism

									by Fintech News Malaysia
July 20, 2018
0 comments

I’ll admit, I wasn’t a believer of the Tabung Harapan crowdfunding campaign when it initially went up. I didn’t think a crowdfunding scheme with no return of investment could ever amass enough donations to justify its existing.
RM153,445,814.86 in donations later, consider me humbled. In a Malaysia Boleh spirit, the people donated in droves to “save Malaysia” from debt.
This marks an interesting paradigm shift in crowdfunding in Malaysia.

Crowdfunding is not exactly a new thing in Malaysia, with many a tech startup particlarly fintech, getting to where they are today thanks to equity crowdfunding.
However, some of the more recent campaigns reveal a nationalistic flavour to the crowdfunding projects that have risen.
1. Tabung Harapan

The interesting thing about this project is that it didn’t start out as a government-endorsed project. Back when the new Pakatan Harapan government was just sworn in, the announcement of Malaysia’s total debts concerned so many people that a few Malaysians decided to send in their own donations to the government to, in a small way, ease that burden.
This move became a viral sensation and later, culminated in a crowdfunding page on GoGetFunded.
At the time of writing, the crowdfunding drive started by Nik Shazarina Bakti of Sisters Of Islam has raised a total of USD3,643 (approximately RM14,796).
Seeking a more transparent way for Malaysians to donate, and perhaps partly fearing that bad players could start fake crowdfunding pages to steal money from the Malaysian people’s goodwill, the government launched the Tabung Harapan on the 30th of May: a bank account under Maybank. Interested donors could simply transfer their donations into Tabung Harapan.
And while the donations are nowhere near able to cover the nation’s alleged debts yet, the amounts are definitely raking up. Currently, it is unclear whether the government has dipped into the funds yet, or whether they have a plan for it.
What is interesting though, is that Malaysians do not seem to expect anything in return for their favours.
2. Free Najib
Image Credit: China Press
On the other side of the political spectrum, another crowdfunding campaign went live to help our ex-premier pay his RM1,000,000 bail after getting arrested on the 3rd of July.
Najib needed RM500,000 after paying off the first half of the bail, and in 24 hours, his supporters rallied to raise RM86,000. Within a week, the campaign raised RM489,166 in donations, which was handed to Najib.
Political donations are nothing new. But just as Kylie Jenner is receiving donations to propel her into the millionaire title, this trend showcases that when someone is prominent enough in the public eye, they are able to rally the masses into sending money directly to them.
And Najib’s case proves that this energy can be propelled for causes that are influenced by politics. Could it then, also be used to instead influence political movements in the future?
3. The Dawn Raid Movie
Screenshot from the Dawn Raid trailer.
So now we have a theory that a nationalistic energy is driving the average Malaysian’s wallet. This entry in the list, more than the other two, will put that theory to the test.
The Dawn Raid is a Malaysian-made heist movie that is currently in development. Directed by Bront Palarae of Ola Bola fame (another movie that thrived on a nationalistic energy), Dawn Raid is a historical movie inspired by real events that transpired in the 80’s.
It tells the tale of a corporate takeover of Guthrie Ltd, a British company, that owned the plantations and agricultural lands in Malaysia. It was orchestrated by Malaysians using the London Stock Exchange in a bid to return Malaysian assets to Malaysia.
Reportedly, our current Prime Minister had a hand in these events during his first premiership.
Now they are seeking RM2,000,000 from Malaysians to help fund a bigger spectacle for the movie on pitchIN.
Contrary to our beliefs, Bront opines that “I think a lot of people already spent their money on Tabung Harapan, which pretty much put us in a less favourable position.”
At the time of writing, the Dawn Raid is 11 days away from the end of the campaign, and they are only RM18,595 towards their two million goal.
When we approached pitchIN’s Sam Shafie about our theory, he was optimistic about this nationalistic energy’s impact on equity crowdfunding.
Sam Shafie, pitchIN

“We need more and more people especially Malaysians to be aware and educated on crowdfunding. The difference with equity crowdfunding is that people who put money into companies get a stake in the company as against a ‘feel good feeling’ when they donate money into Tabung Harapan.”
“So now that the ordinary Malaysians understand how donation crowdfunding works, it will be much easier to explain how equity crowdfunding works. So I am all for this indirect national education on the aspects of crowdfunding!”
“But it boils down to what are the causes that will push the ordinary donor to help. In the case of equity crowdfunding, what is it about the company that makes it investible? There are also other variables that need to be taken into consideration such as: was there enough marketing? Enough promotion? Sentiments aside, no crowd is going to get behind anything if the crowd is not aware—if the crowd does not buy into the cause or if the crowd thinks a company has no inherent value for it to be investible.”
Perhaps what we see as a rise in nationalism is simply a natural result of social media on our political climate today. According to INVOKE, it was the former opposition’s superior social media strategies that helped sway public favour their way.
When social media has empowered Malaysian individuals to make their voices heard, an increase in crowdfunding is a natural result of that trajectory. It allows them to put their money where their mouth is.
Similarly, it would probably take an intelligent social media strategy for a crowdfunding project to take advantage of this renewed energy among Malaysians.
As Sam concluded though, perhaps all of this will only boil down to an easier time teaching Malaysians about the concept of crowdfunding. The real marker for a crowdfunding project’s success will be one that is able to tug at Malaysian heartstrings—one that can actually provide a compelling reason for Malaysians to speak with their wallets.
Featured Image Credit: Tun Dr. Mahathir’s Facebook Page

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Banking
Digital Transformation
Malaysia

Hong Leong Seeks Fintech Startups For Its HLB LaunchPad Mentorship Programme

									by Fintech News Malaysia
July 18, 2018
0 comments

Last year, Hong Leong Bank Berhad launched its inaugural HLB LaunchPad with a vision of helping Malaysian fintech startups rethink the whole industry—similar to how ride-hailing reimagined the public transportation industry.
To that end, Hong Leong is now opening up registrations for this year’s HLB LaunchPad 2018: ACTIVATE, and they’re looking for startups aspiring to make a break in the financial services industry.
While fintech companies will remain a bedrock of the bank’s vision for their programme, the launchpad is also opening its doors for youth-based companies, Series A Companies, as well as those working on CSR outreach later in the year.

The aim is to work with startups who are able to solve banking challenges, or are able to provide out-of-the-box solutions that can change the whole game.
Selected startups stand a chance of winning cash prizes up to RM100,000, and access to insights and mentorship from Hong Leong’s senior leadership teams. They could also gain access to the wider Hong Leong Group in Malaysia as well as the region.
The Types of Startups That Qualify

Applications can be sent in up until August 17th, 2018, and open for startups within the ASEAN region.
Seeking Innovations
HLB LaunchPad is a mentorship programme that aims to cultivate more tech-savvy startups that will rethink financial services. Sharing in Hong Leong’s vision and efforts are Cradle Fund, Malaysian Business Angel Network (MBAN), and the ASEAN Angels Alliance.
Domenic Fuda, CEO of Hong Leong
“As the rapidly evolving digital and technology innovation changes the service and financial landscape, the banking and financial industry not only needs to be agile and adaptive to serve the customers’ growing digital needs, but we also need to be future-ready and be innovative in thinking ahead of the curve.”
“HLB believes that through cultivating the best minds and collaborating with like-minded partners, we are able to transform our organisation faster – from the way work, the way we empower our communities and business partners and most importantly, the way we serve and engage with our customers.”

Some alumni from last year include SalesCandy, Kakitangan.com, PropSocial, CapitalBay and Blinkware Technology. SalesCandy emerged as the winner for 2017’s demo day.
Just last month, Hong Leong bundled offerings from Kakitangan and Biztory, another HLB LaunchPad participant, to launch the Digital Business Solution Suites for SMEs.
You can find out more about the HLB LaunchPad 2018: ACTIVATE and the application process here.
Featured Image Credit: HLB LaunchPad’s 2017 demo day by Hong Leong Bank

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Blockchain/Bitcoin

BNM’s Newly Updated Watchlist Proves That Crypto-Scams Are Still a Threat

									by Fintech News Malaysia
August 6, 2018
0 comments

Just recently, BNM has updated its consumer watchlist with risky companies that you shouldn’t interact with.
In a list that was once dominated by investment scams, ponzi schemes, and the likes, we now have to contend with “bitcoin companies” disguising a ponzi scheme underneath.
Names like Bitclub Network, BitKingdom, CoinEnterprise, CryptoDaily Investment Packages, and many others were added in the second half of 2017, without coincidence, around the time when the mainstream population began noticing bitcoin due to its rising value.

One of the recent additions to the list is the Kazuki Coin, attempting to market itself as an altcoin on a “more efficient system”. While they have been around since 2017, Kazuki’s recent marketing tactics seem to revolve around touting what they characterise as a stable currency in the midst of this cryptocurrency downtime.
As to be expected, many netizens on the Kazuki Facebook page has declared them a scam due to BNM’s watchlist, and based on our own observations there are a couple of people commenting on posts asking when they’ll be getting the cash that they feel they’re owed.
According to Kazuki Coin, buyers are unable to cash out due to problems in India’s operations.
Screenshot Translation:
Comment 1: Until when will the KPay system be fully operational? It’s been almost 2 months.
Comment 2:  What’s the point of Kazuki Coin going up to USD8 if you can’t even sell it?
One of these comments were posted only 10 weeks ago.
While we can’t say for sure without looking into their papers or company’s operations, the Kazuki Coin definitely has telltale signs of scumminess.
If it it a scam, what is notable about Kazuki Coin is that they are able to respond to current market concerns, like the dropping value of bitcoin and even their appearance in BNM’s watchlist, using a breakdown of operations in India as a reason why users are unable to cash out.
This goes to show that while numbers of them have seemingly lessened, users still need to be aware of cyrptocurrency scams that may appear wearing different masks.
It’s 2018, Why are People Still Falling For Crypto Scams?
If it promises guaranteed returns, it’s probably not a crypto investment.
With so many cryptocurrency platforms deemed risky by BNM even today, it can be assumed that cryptocurrency ponzis will keep appearing as long as there are Malaysians that will fall for it.
Even in our cryptocurrency exchanges approved by BNM list, there are a couple of them that we’ve identified as potentially risky to take part in. This is because Bank Negara is only requiring registrations for monitoring’s sake as they deliberate how to deal with this nascent industry moving forward.
So there is a real concern of scams registering with BNM for monitoring, then touting their “registered with BNM” status to ease the hearts of their potential victims.
As of now, Bank Negara is not regulating the volatile, nascent scene, even if users suffer major losses.
There are definitely merits to a decentralised currency system. Bitcoin and other altcoins are not fully subject to stock market changes, and those living in countries with poorly performing currencies can retain their wealth via cryptocurrency.
But without a central authority to regulate its value, it then falls onto the shoulders of the users to conduct their own due dilligence about the trustability and risk of each and every investment they make.
This is true of any investment, cryptocurrency or not.
And this isn’t just limited to those who are hodling. It would do well for cryptocurrency investors to truly understand technologies behind cryptocurrency, and a learning about how investing and currencies work would help too.
When you actually understand how the market works, you’ be better able to spot any scams that come your way, regardless of what form they appear in.
A good rule of thumb is that if it sounds too good to be true, it probably is. And never spend any money on cryptocurrency that you can’t afford to lose.
Featured Image Credit: Bank Negara

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Crowdfunding
Lending

Funding Societies Partners with Curlec, Automates Monthly Repayment to Investors

									by Fintech News Malaysia
July 31, 2018
1 comment

Funding Societies,  a Peer-toPeer (P2P) financing platform in Malaysia, has announced a partnership with Curlec, a homegrown FinTech company specialising in direct debit payments.
Funding Societies will be the first partner to adopt Curlec’s online Direct Debit system. With an integrated system, the repayment process for Funding Societies’ SME clients will be automated, increasing customer efficiency and lowering processing time.
Convenience for SMEs
With the partnership, Funding Societies’ SME clients will have a choice to get rid of their cheques and paperwork to process their repayments. Most repayment methods require clunky software and sizeable teams to manage the operational process. Curlec’s Direct Debit system saves cost and decreases operational complexity. Local SMEs will benefit from a hassle-free customer experience when performing monthly repayments.

Lower Risk of Defaults and Late Repayments
Though Funding Societies boasts a 0% default rate, it is not uncommon for there to be instances where SMEs delay payments due to operational issues from their CFOs/CEOs not being around to sign the cheques, to simply being so understaffed that they miss out on processing one or two payments.
Having an opt-in automated repayment system eliminates many of these factors out of the equation, which ultimately translates a better sense of reliability for Funding Societies’ investors.
P2P Lending, a Needed Solution to Address Malaysia’s SME Financing Gap
According to estimates cited by Securities Commission (SC), the SME sector in Malaysia has a financing gap of more than RM80 billion. Yet domestic SMEs comprise 97% of Malaysian businesses and contribute to 65% of national employment. Market-based, technology-driven financing options such as Funding Societies can provide alternative solutions to address the needs of SMEs in Malaysia.
Mr. Wong Kah Meng, CEO of Funding Societies Malaysia, said “We are proud to be the first P2P financing platform to use an online Direct Debit system for our SME users. Curlec’s system offers an option to automate SME’s repayment. With an efficient and practical process like this, we hope to enhance customer experience. If they no longer need to process paperwork for every repayment, our users can focus more fully on developing their businesses.”

Mr. Zac Liew, Co-Founder and CEO of Curlec, stated that he was delighted to be working with Funding Societies. He said, “Going forward, Funding Societies will offer Curlec’s Direct Debit system for SME as an additional repayments method, and our Instant Pay FPX payment gateway for investor deposits. It is a great opportunity to collaborate with another local FinTech company who is committed to support SME businesses. We share the same goal: to serve SMEs currently underserved by existing financial institutions.

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Banking
E-Wallets
Payments

Digi’s vcash Will Be on 10,000 Terminals Thanks to AmBank and an SME Strategy

									by Fintech News Malaysia
August 6, 2018
0 comments

Besides fintech companies, telcos have been making big pushes towards growing and developing their e-wallets for Malaysia to move into the cashless future.
Digi was part of that trend, with the launch their e-wallet vcash at the end of last year. And now they’ve forged a partnership with AmBank that allows the wallet access to all of AmBank’s merchant POS terminals.
Now, merchants that signed with AmBank will be able to accept Digi’s vcash QR code on top of their usual card and cash services. This seems to provide AmBank with the opportunity to tap into the hot e-wallet race in Malaysia, while in an instant, opening up vcash to a wide variety of merchants.

And to further drive on that momentum, Digi will be signing up small and mid-sized enterprises (SMEs) under what they call a Master Merchant programme in collaboration with AmBank.
E-Wallets Meets SMEs
We’re waiting on more detail on what the Master Merchant programme will entail, but it won’t be the first time an e-wallet tries to stake a foothold in the market using SMEs.
Traditionally, it has always been difficult for smaller mom and pop businesses to gain access to cashless, as setting up a card payment system often requires a bit of upfront cost. This is the gap that many e-wallets have identified as of high potential, and correctly ingratiated themselves into.
Some examples include FavePay’s adopted merchants (though FavePay is not quite an e-wallet), where one of them was th famous SS2 durian stall. Boost meanwhile ingratiated itself into the quintessential Bazaar Ramadhan experience.
Banks Eyeing SMEs
Meanwhile, through this partnership AmBank is able to more easily reach out to the SME market in Malaysia. This segment has grown into a serious interest among banks because SME contribution to Malaysia’s GDP has risen to 37.1% in 2017, a rapid increase from 36.6% in 2016.
The GDP growth that SMEs recorded, exceeded the growth of both Malaysia’s GDP and non-SMEs last year.
Dato’ Sulaiman Mohd Tahir
Dato’ Sulaiman Mohd Tahir, Group Chief Executive Officer, AmBank Group said that:
“This strategic tie-up with Digi complements our efforts in broadening our product offerings to existing merchants as well as new merchants, while staying relevant and competitive in the digital landscape.”
“Meanwhile, we will soon be introducing eRemittance promotions for our customers to remit money to their children studying abroad at affordable fees. As part of AmBank’s digital transformation journey, we are designing and implementing numerous new solutions with our customers in mind.”

Featured Image Credit: AmBank

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Banking
Lending

CTOS To Enable Real-Time Credit Decisions For Banks

									by Fintech News Malaysia
August 17, 2018
0 comments

Malaysia’s credit reporting agency CTOS recently launched a solution to enable banks to make real time credit decisions. This solution will allow banks to integrate its existing system into the CTOS Application & Decisioning solution to draw data and insights into the borrower’s credit worthiness.
According to CTOS, when implemented this solution can potentially enable instant loan approvals for credit cards and auto loans which is line with the move by the banking industry to move towards quicker turnaround time and instant approvals.
At present, CTOS has yet to onboard any customers for this solution, but they are seeking introduce this service to banks, telcos, non-bank credit issuers and fintech lenders in the P2P lending space.

“CTOS Application and Decisioning will help bring a consistent and timely customer experience across all channels in order for businesses to achieve the right balance of seamless omni channel convenience and quick decisions to meet all your customer needs,” Eric Chin, CEO of CTOS Data Systems Sdn Bhd, said at the launch of the solution.

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E-Wallets
Payments

WeChat Pay Launches in Malaysia With An Alipay-Killing Money Gifting Scheme

									by Fintech News Malaysia
August 21, 2018

After a few months of a soft launch WeChat Pay, a QR code-based e-wallet finally makes its official debut in Malaysia into the wallets of at least 20 million active WeChat users.
With such a crowded market here in Malaysia, WeChat Pay Malaysia is trying to sweeten the pot by rolling out its Money Packets feature, which is basically a digital Angpow—like what is already done by a few local banks.
It is a peer-to-peer payment system that allows users to transfer money between each other, and WeChat will not charge for any Money Packet transactions.

To encourage adoption of their wallet, WeChat Malaysia states that they will be giving away a random amount in a Money Packet to WeChat users between August 21st to August 28.
Update: WeChat has announced that they’ve run out of money packets for the time being.
Screenshot of this post from WeChat’s Facebook page
The Money Packet will be randomly filled with amounts ranging from Rm3.88 to RM88.88, along with a prepaid top-up coupon valued at RM2.
Freebies aside, the Money Packet function could be a strong move from WeChat, as Alipay’s Jack Ma has once called it a “Pearl Harbour Attack” on Alibaba’s Alipay. The e-commerce mogul gave props to WeChat for a “beautifully planned and executed” move that managed to convince people that WeChat has won over Alipay.
Whether the same will hold true for Malaysia will remain to be seen, but if you’re a user who is curious about utilising the Money Packets option, here’s a step-by-step guide on how to make it happen.
How to Send Money Packets Through WeChat Pay
The tutorial, and any other updates regarding WeChat Pay can be found on their Facebook page.
What you need:

A recipient who also has a WeChat account
Balance in your WeChat Pay account

To send a WeChat Pay packet, you’ll first have to open the conversation box between you and your recipient. There, you’ll see a little (+) button.
Image Credit: WeChat Pay MY
In the new menu, click on the Money Packet icon, which looks like an envelope. There, you can key in the amount you’d like to send over, along with a short message.
Image Credit: WeChat Pay MY
Image Credit: WeChat Pay MY
Then, you can select the green ‘Pay Now’ button, and seal the deal with your 6-digit PIN code.
Image Credit: WeChat Pay MY
Image Credit: WeChat Pay MY
Can WeChat Just Repeat What Worked in Malaysia?
According to The Star, WeChat Pay has received Bank Negara’s approval to run in Malaysia, which has necessitated the platform to implement security technologies that comply with international standards, including full-time monitoring of transactions.
Business Insider reports that Malaysia shares a lot of similarities with China in terms of human behaviour, so it seems like WeChat Pay has decided to transplant strategies that have worked for them in the past into the Malaysian ecosystem in hopes that they can at least replicate China’s results.
The e-payments issuer would also get the support of e-wallet-friendly local regulators like Bank Negara, which sees benefits in moving Malaysia towards a cashless society.
However, as we outlined in our piece about e-wallets, things may not be so simple for WeChat.
For one thing, many local players have already been on the move in Malaysia, particularly telcos which has seen some success in educating the market about e-wallets, and bringing people onto the e-wallet train.
While WeChat is touting its Money Packets as an interesting launch feature, WeChat will not be the only e-wallet issuer in Malaysia that offers a similar function.
True, WeChat Pay already has the years of development to back them up, but as Grab’s takeover of Uber in Asia proves, understanding of the local markets could be a huge advantage to capturing a market segment.
Not to mention, while it has seen some criticism, Grab has also launched their own e-wallet, GrabPay, into the Malaysian market.
In our opinion, the e-wallet that will thrive in Malaysia will have nothing to do with the number of customers it manages to adopt, but instead depend on the merchants.
There is a huge opportunity in Malaysia for e-wallets to allow smaller merchants to accept cashless transactions, since card terminals can be particularly difficult for these small businesses to apply for.
However, more to the point, users will simply use the e-wallet that is most convenient for them. So if most of the merchants around a user uses a specific e-wallet, that will be the one that users opt for, particularly if the merchants, a wallet’s first evangelists, are actually able to do some education as well.

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Banking
Malaysia
Payments

Malaysians Can Now Link Their Hong Leong Debit Cards to WeChat Pay

									by Fintech News Malaysia
August 23, 2018
0 comments

Malaysians who own a Hong Leong debit card can now start treating the freshly-launched WeChat Pay as their extended Hong Leong account, with the announcement of a new partnership between the e-wallet and the bank. Now, users can link their Hong Leong debit cards to their WeChat Pay accounts.
This won’t be the first time Hong Leong strikes a local deal with WeChat Pay, with another geared towards China tourists struck back in 2017.
Where to Use Your Hong Leong-Linked WeChat Pay
As of today, Hong Leong Bank customers can use WeChat Pay for products and services that enabled the e-wallet, like Garena, Joox music, and telco prepaid top-ups.

According to a press release, the same holds true for any transactions in Switch, one of the premier Apple resellers in Malaysia.
Update: A Hong Leong Bank representative informed us that there will be no transaction fees either, whether for top-ups or withdrawals.
Soon, the bank reports that users would also be able to use their Hong Leong-linked WeChat Pay for shopping in Giant, Genting, MyNews, and GSC, among others.
How to Link Your Debit Card with Your Wechat E-Wallet
1. In WeChat, Go to “Me”, select Wallet.
2. Click on Bank Cards, add a HLB bank card, then enter the 6-digit PIN for payment using the HLB Debit Card.
3. Enter Debit Card No, Expiry Date, CVV Code and email. Upon successful registration, a SMS will confirm the Debit Card binding to the Wallet.
For a visual reference, you can follow the video below:
The new development marks Hong Leong Bank as one of the first in Malaysia to join Tencent as a local WeChat Pay master merchant acquirer, though it will remain to be seen what that entails for both the e-wallet issuer and bank.
WeChat Pay made its official debut in Malaysia earlier this week, and began their consumer onboarding strategy with a free money scheme. By midday of the launch, WeChat Pay Malaysia had run out of money packets to give out to Malaysians due to demand.

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E-Wallets
Payments

Finally, TNG’s E-Wallet Gets Crucial Updates, Can it Stay Ahead of The Competition?

									by Fintech News Malaysia
August 24, 2018
1 comment

After the disastrous release of a Touch ‘n Go reload app in March, the company returns with a newly updated, fully-fledged Touch ‘n Go e-wallet. Many in Malaysia opine that Touch ‘n Go was arguably best positioned to release a Malaysian e-wallet with 2 decades of cashless experience, so their serious entry into the ecosystem is seen as long overdue.
The TNG Digital main operations hub was just launched in Bangsar South today, officiated by Lembah Pantai’s Member of Parliament (MP), Yang Berhormat Fahmi Fadzil.
They complement the new hub with an update to their e-wallet app, with a fresh new interface and some updated functions.

Old versus new.
The setup of a business hub proves that TNG Wallet will be making an earnest effort into growing their e-wallet at this time.
And here’s what the latest version of the app can do:
1. Link up to 3 Touch ‘n Go Cards to the Wallet
Redeeming themselves from the earlier kerfuffle, the TNG Wallet app stays true to its namesake and allows you to check your card balance through the app itself.
The process of linking your card is similar to linking your credit or debit cards, and relatively user-friendly.
For now,  you can only check the balances on your Touch ‘n Go card, but since it is linked to an e-wallet, there may be plans to incorporate card top-ups in the near future. It should be noted that the wallet will take up to 48 hours to reflect any transactions that have been made, which to us seems like a long time, especially in an age where users demand instant mobile services.
Update: The article has been updated to better reflect the TNG Wallet’s current capabilities.
2. Compare Flight Prices Between Different Airlines

Taking a page out of Alipay’s book, the wallet allows payments to be made via QR codes for real life transactions, but this function is somewhat limited for now, as we haven’t been able to locate many shops that accept the TNG Wallet.
Based on the layout, it seems like TNG’s game plan relies on online browsing. The app allows you to browse and purchase MBO movie tickets, and as for flights you’re even able to compare prices from different airlines in-app.
If they are able to onboard more cinemas and airlines onto the app, we can see them becoming a strong e-wallet contender. Comparison platforms have proven effective in Malaysia, and its integration might just make it worth a download for bargain-hunters, or those who simply prefer to buy their tickets online.
3. Bill & telco payments
Even Merchantrade is available, though we’re not sure if foreigners would adopt the TNG Wallet.
Following in the footsteps of wallets like Boost, vcash and SarawakPay, TNG Wallet allows you to make payments for both your phone and incurred bills.
TNG Wallet has removed the ‘Utilities’ option that was there before, either omitting the option altogether or potentially merging it with the ‘Bills’ option once they onboard the right service providers.
The app allows payments for both prepaid and postpaid, though unlike some of the aforementioned telco-linked wallets, there doesn’t seem to be any discounts or cashbacks yet for these payments.
As for bill payments, for now, only Astro bills can be paid through the TNG Wallet, which is interesting as Astro has its own Payfy wallet, and Payfy’s only function is to pay your Astro bills.
It seems likely that TNG will be updating the bill payments to include more vendors, but for now, the ability to pay Astro bills would probably be appealing only if you already have the wallet in your phone.
4. Possibly Replace the Touch ‘n Go Card Altogether

We were fortunate enough to be part of a trial group that received TNG Wallet’s Transit option, which allows TNG Wallet users to pay for their train fares using their phones, instead of their physical Touch ‘n Go cards.
This can be a game changer for the wallet if implemented. Billions of public transport rides occur every year in this nation. Malaysians have a longstanding love affair with their phones, and can’t leave home without it. The math makes sense.
If actually successful, this function will echo Singapore’s efforts into turning their public transport system fully cashless.
Perhaps in line with this, the in-app RFID option for TNG Wallet is currently not functional yet.
Still a Long Journey Ahead
TNG Wallet will certainly have hurdles to climb over, with both local players like Boost and Chinese players like WeChat ramping up their acvitivies
Now, the actual adoption and use of all of its unique functions functions will rely on TNG’s marketing and education efforts, as well as merchant onboarding.
Meanwhile, we are still awaiting that one e-wallet that will allow overdraft from linked debit or credit cards, so that we don’t have to go through a cumbersome two-step process before buying anything.

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