Regulatory sandbox helps boost fintech businesses: Page 2 of 2
By Sharmila Ganapathy-Wallace August 22, 2017
Open approach to fintech
WorldRemit’s regional head of Asia Pacific, Michael Liu (pic, right) was similarly enthusiastic about the company’s experience in the sandbox. “The framework gave guidance as to the objectives of the sandbox and BNM gave participants a high degree of flexibility to work out the most appropriate way to introduce digital financial services to Malaysia,” he says.
“We have had constructive discussions and meetings with the central bank and we appreciate the open approach taken during the application process,” he tells DNA via e-mail.
Liu shares that WorldRemit was pleasantly surprised that two out of the four initial sandbox participants are foreign-owned entities and believes that this adds to Malaysia’s thriving fintech community.
“Any international fintech wanting to achieve a real business presence in Asia Pacific needs to be in Malaysia and the sandbox programme has significantly accelerated our ability to launch our services in Malaysia,” he says.
“One of the most exciting things about fintech is that technological change is rapid and innovation is constantly being pursued. We applaud the flexible approach taken by BNM in its regulatory sandbox and hope that approach is maintained going forward in order to cater for innovations in the future which are not identifiable today,” Liu concludes.
Financial market players have long been making the point that Malaysia is uniquely positioned to be a test bed for innovative fintech solutions for emerging markets, given its comparative advantages. For example, Malaysia ranks highly for the development of Islamic finance and has been recognised for its passion in advancing the financial inclusion agenda.
Its position as a middle-income country with respectable GDP growth and sizeable 30 million population with high mobile and internet penetration sees it rank highly amongst emerging markets by the World Bank. It has also long been recognised for pro-business policies and a wide range of other incentives to investors. Finally, there is the strong and holistic support from key stakeholders in driving not only the fintech ecosystem, but also e-commerce and SME entrepreneurship.
For instance, one of the stakeholders is the Securities Commission (SC), which looks into capital markets and investment related fintech solutions. In 2015, it issued six licences for Equity Crowd Funding platforms whilst another six licences for Peer-to-Peer (P2P) financing platforms in 2016. In May 2017, SC launched a new framework to license robo-advisor through the Digital Investment Management framework.
Meanwhile, BNM expects a few more approvals for its sandbox to be finalised in the upcoming months with different solutions to mirror the breadth of innovation currently in the market.
For more information about BNM’s Financial Technology Regulatory Sandbox, visit the FTEG website at: https://www.myfteg.com/regulatory-sandbox