In a move to support Malaysia’s fintech ambitions, a recently formed tripartite partnership involving Malaysia Digital Economy Corporation (MDEC), the FinTech Association of Malaysia (FAOM) and global fintech training platform 10×1000 Tech for Inclusion has launched a fintech training platform – called the ‘Flex’ Fintech Program.
According to a joint statement from the three organisations, the online certificate programme will focus on ‘the mindset, knowledge, and skills to become drivers of digital economic growth’.
The government agency MDEC, FAOM and 10×1000 aim to recruit 200 ‘Flex’ learners to start the program in October 2021.
Gopi Ganesalingam, MDEC’s vice president, Tech Ecosystems and Globalisation, explained that fintech is one of five industry priorities in MDEC’s ‘Digital Investments Future5 (DIF5) Strategy’ to grow the digital economy in line with the Malaysia Digital Economy Blueprint (MyDIGITAL).
He added that “The ongoing digitalisation of the sector is expected to have a high impact on investment, jobs and contribution to GDP. This collaboration with 10×1000 to provide Flex program in Malaysia will help further strengthen our digitally-skilled talent pool and contribute to our vision of driving Malaysia to become a globally competitive digital nation.”
Applications for the programme are expected from MDEC’s ecosystems partners and state digital agencies – Selangor Information Technology and Digital Economy Corporation (SIDEC), Digital Penang and Digital Perak. This is in addition to FAOM’s members who are eligible to apply for the program.
Registered in October 2016, FAOM has positioned itself as a national platform to support fintech innovation and investment in the region.
Its president Karen S. Puah noted that Malaysia’s fintech growth has accelerated from the emergence of the coronavirus pandemic. Still, that talent development is a key to help sustain the momentum.
“To support and sustain this growth, there is an increasing need to reskill, upskill, as well as to introduce new skills to prepare the local workforce for the future needs of the industry, especially in emerging technologies such as blockchain, artificial intelligence, etc.,” she said.
Earlier this month, Ant Group chairman and CEO Eric Jing commented: “We are delighted to join hands with global partners to bring the 10×1000 training platform to learners worldwide, as we seek innovative approaches to meeting a common goal of bridging the digital skills gap, particularly in communities that need it the most.”
Jing further said he expects the program will provide learners with the support and fintech knowledge needed “to support their communities and help bring us closer to meeting the UN Sustainable Development Goals (SGDs).”
Described as a philanthropic initiative, 10×1000 was jointly initiated in 2018 as an open and global fintech training platform to enable learners to become drivers of digital growth by the International Finance Corporation (IFC), a member of the World Bank Group, and Alipay.
This announcement in Malaysia follows a string of partnerships formed by 10×1000 yes include the United Nations Economic Commission for Africa, UN World Food Programme, SME Finance Forum Managed by the IFC, Dubai International Financial Centre, KPMG and fintech associations from Hong Kong, MENA, the Philippines, Singapore and Thailand to recruit Flex learners.
The long game
Already on track as a major Islamic finance hub, Malaysia is also looking to establish itself as one of Southeast Asia’s fintech leaders with the announcement that its central bank (Bank Negara Malaysia, BNM) will issue the first round of digital banking licenses in early 2022.
In July of this year, BNM announced that 29 bidders had applied for digital banking licenses. Five licenses are expected in the first round with a reported asset threshold of USD725 million (RM3 billion) for the first five years of operation.
This builds on BNM’s digital banking initiatives to catalyse fintech innovation and growth, including the introduction in 2016 of a national regulatory sandbox framework and a regulatory framework for digital banks.
Addressing financial inclusion
These moves will disrupt Malaysia’s financial and banking industries – some positive benefits could include boosting fintech and digital payment firms. In addition to small and medium companies, fintech is expected to improve financial inclusion.
A 2019 study by Google, Temasek, and Bain found that 40% of Malaysian adults had ‘underserved’ financial service needs, while 15% did not have a bank account. However, the Malaysian government’s data points to the unbanked population as 8% – which it intends to reduce to 5% with digitalisation initiatives including fintech and digital payments.
In the short term, Covid19 has fuelled a digital shift globally. Fintech Malaysia’s 2021 report highlighted the uptick in digital banking adoption. One of the report highlights singled out increases in online (112.5%) and mobile banking (61%) penetration in 2020 and a 125% rise over the previous year in mobile banking transactions with a total of RM460 million.
Fortunately for the nation’s digital economy aspirations, Malaysians have an appetite for digital banking, confirmed by a 2021 Visa Consumer Payment Attitudes survey of more than 7,500 consumers across the region.
The finding reflects the thirst for ‘digital first experiences’ that more than 74% of Malaysians reported digital banking awareness, with 66% said they were interested in adopting digital banking services.
This echoes Southeast Asia’s rising trend of digital payments. According to the report, 63% use contactless payments and 46% use card payments, while almost two-thirds of consumers in the region (64%) have attempted to go cashless.
Given its strength as an Islamic finance hub, Malaysia’s fintech opportunities look bright. Pandemic related public health restrictions have brought about a keener appreciation for digitally-driven convenience to daily work and living. Furthermore, according to some industry leaders, digital banking could offer better and faster access to financing and more competitive borrowing rates to businesses.