The Malaysian Bar's International Malaysia Law Conference ("IMLC") 2018 is taking place from 14 to 17 Aug 2018 at The Royale Chulan Kuala Lumpur.
by Daniel Bong, Member of the Bar
In recent years, there has been an exponential growth of the FinTech industry with a resulting expansion of companies providing related services, particularly e–wallet services. The major challenge faced by many of these start–ups is not capital insufficiency, but rather reaching out to Malaysian consumers.
Lum Kar Hoe from PwC Malaysia confirmed that there has been a growth of partnerships in 2018 between established financial institutions with FinTech companies. He highlighted examples like the cooperation between OCBC Bank and Fundastic, a P2P lending platform. This arrangement involved OCBC Bank referring SME businesses that did not meet the bank’s risk appetite, to the P2P lending platform. UOB also entered into a similar arrangement with Funding Societies. Examples of e–payment services included Maybank’s recent partnership with Grab, and CIMB Bank’s and Touch ‘n Go’s partnership with Ant Financial.
These partnerships are evidence of how FinTech now encroaches beyond tech start–ups to well–established corporations creating both competition and synergy. Growth and development of the FinTech industry in areas such as insurance and payment services are handled by Bank Negara Malaysia. To further stimulate growth in this area, Bank Negara Malaysia has adopted a ‘sandbox’ approach where a safe regulatory environment is being created for businesses to experiment with new FinTech products and services.
The Securities Commission is responsible for the growth and regulation of FinTech industry in the securities and equities market. Azrina Azmel, Assistant General Manager for Innovation, Digital and Strategy for the Securities Commission, talked about some of the initiatives launched by the Securities Commission. These include equity crowdfunding (“ECF”) platform which serves as an alternative avenue for SMEs to source investment. The platform operates as a private equity market which is regulated by terms and conditions imposed by the Securities Commission. Azrina observed that unlike a traditional stock exchange where value is based on share prices, investors in the ECF had a stronger connection and commitment to the business of the SMEs in which they had invested and are more willing to keep their capital investment locked in for a longer period.
Looking for inspiration and adopting lessons from Silicon Valley, Jenna Beh from the FinTech Division of Malaysia Digital Economy Corporation (“MDEC”) spoke of the steep learning curve and the groundwork necessary to build up a strong ecosystem of stakeholders where FinTech could flourish. Her aspiration was to create a self–sustaining ecosystem which would ultimately render her job unnecessary.
Patricia Chung, one of the delegates, pointed out that there needs to be more protection for intellectual property which included patents for software. She added that as the law currently stands, software is only protected through copyright laws, which are insufficient. This and other issues will need to be addressed and soon, if Malaysia’s FinTech players are going to be able to compete regionally and globally.
here for more news about IMLC 2018.