Malaysia's top financial technology (fintech) firms have predicted that the country will make a grand entrance into virtual or neo banking sometime mid-2020 as the sector continues to grow and open opportunities for fintech projects.
According to Malay Mail, industry experts are positive that Malaysia will complete its first neo-bank (virtual bank) by the third quarter 2020 as part of the scheme to boost fintech in the country. The prediction was made after the Bank Negara Malaysia (BNM) announced that it will start processing virtual banking license measures before the year ends.
Among the organizations that believe Malaysia will achieve something great in less than two years is the Fintech Association of Malaysia (FAOM). "We believe that BNM is emphasizing for a banking industry that is modern, innovative and technology-driven, yet mature and managed by experienced resources, as one of the key components for Malaysia digital economy and ingredients for a high-income nation," the group said.
The organization further explained that its optimism of a virtual bank next year could be attributed to similar paths that over 50 successful neo-banks have shown over the past years.
FOAM also said it agrees with BNM's move to release virtual banking requirements this year. The group said the move is critical the bank wants to step up its game against other international players such as Hong Kong, Europe, the U.S., and Australia.
For the organization, BNM is experienced enough to explore fintech opportunities, especially considering that the world is largely leaning on virtual activities and transactions whether in payments, purchases, and other monetary transactions that made online and through mobile phones.
Aside from the rollout of virtual banking requirements, FOAM recommended that traditional Malaysian banks should move faster in terms of shifting towards a more innovative and technology-based system. Such reforms will help build strong partnerships with other banks and financial institutions that already have existing fintech programs.
For many finance experts, virtual or neo banking will not disrupt traditional banking practices. Instead, the changes will help traditional institutions adopt digitalized processes that will help Malaysia have a stronger presence in the global finance and fintech market.
Earlier this month, it was revealed that Malaysia's fintech sector is stepping up its game in the global realm through various programs and projects that startups and newbies may want to take part in.
One of the upcoming events in the local fintech world is the Malaysia Fintech Week 2019 that will be held from June 17-21. To be hosted by BNM, the first flagship event by the regulator will be focused on discussions that will help fintech firms discover ways to transform their businesses into a technology-based setup.
This month, the Bloconomic Excellence Award 2019 will be held on April 25 and 26. The event will feature a leaders panel session and mini-exhibitions that will showcase various fintech and finance companies.
