FINTECH STARTUP REPORT - Internet Alliance (IA)...FINTECH STARTUP REPORT Author: vince_whatever Keywords: DACi8QzDxZM Created Date: 20171013051557Z

FINTECH LANDSCAPE REPORT MALAYSIA

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OCTOBER 2017

www.fintechnews.my @FintechNewsMalaysia

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COUNTRY OVERVIEW

POPULATION31.19 Million

URBANISATION

BANKED SMARTPHONE

Most urbanised in East Asia

Source: World Bank, Mobile Newzoo's Global Mobile Market Report, Bank Negara Malaysia

75%

81%64.1%

PENETRATION

MOBILE BANKING SUBSCRIBERS 33%

CASHLESSTRANSACTION

31.19 Million

(Per Capita) 550,297.8 MYR

POPULATION

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Powered by:OVERVIEW OF FINTECH PLAYERS

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Powered by:REGULATORY ENVIRONMENTRELEVANT REGULATORS

Private Retirement Schemes

Securities

Derivatives

Fund Management

Corporate Finance

Financial Planning

Monetary Stability

Financial Stability

Financial Markets

Financial Sector

Development

Financial Inclusion

Payment Systems

Forex Administration

Companies Act

Registration of

Businesses Act

AREA OF REGULATION

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Powered by:REGULATORY ENVIRONMENT

Image credit : www.bnm.gov.my

FINTECH TECHNOLOGY ENABLEMENT GROUP (FTEG)

Established in June 2016 to support innovation in the FSI space

Cross-functional group within Bank Negara Malaysia

Currently chaired by Aznan Abdul Aziz, Director Financial Sector Development

Members include heads of Payments System Policy, Economics, Specialist Risk, Finance, IT

FTEG'S RECENT ACTIVITIES

Oct 2016 - Established a regulatory Sandbox

May 2017 - Fintech Hacks - crowdsourcing of ideas fro the general public

June 2017 - Announced approval of 4 sandbox participants

Ongoing - Regulatory Bootcamps, regularly to help startups the understand regulatory enviroment

RECENT DEVELOPMENTS

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FINTECH SANDBOX FRAMEWORK

Defines fintech company as one that utilises or plans to utilise fintech but excludes a financial

institution

The Fintech company must have a genuinely innovative solution that either improves efficiency,

security or addresses a gap in the market

No restrictions of fintech companies that does not collaborate with banks but encourages it

12 Months testing period, written request can be made to extend the period

Cannot circumvent existing laws

Open to all including those without existing presence in Malaysia

APPROVED FINTECH COMPANIES IN SANDBOX

FINANCIAL AGGREGATOR FINANCIAL AGGREGATORP2P CURRENCY EXHANGE &

REMITTANCEREMITTANCE

RECENT DEVELOPMENTS

Announced October 2016

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LIFE INSURANCE AND TAKAFUL FRAMEWORK

PILLAR 1Gradual removal of limits

on operating costs

PILLAR 2 PILLAR 3Diversification of

distribution channelsStrengthening Market

Practices

RECENT DEVELOPMENTS

Limit on management

expenses

Limit for investment

linked takaful products

Limit for investment

linked products

Gradual Reduction of

Agency Commission

Exceed 30% of policies

sold through non-

agency channels

Direct channels from

insurance/takaful

companies - physical &

digital

Increased focus on

online aggregrators

Balance score card

(BSC) to ensure

consumer interests are

considered beyond just

sales numbers

Simplifying policies,

making it easier to

understand by laymen

Introducing online

facilities

Implementation Period 2013- 2019

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RECENT DEVELOPMENTS

All available products are defined in the Motor and Fire Tariffs and are subject to tariff rates

Gradual adjustments to tariff rates for identified risk group

All available products are defined in the Motor and Fire Tariffs and are subject to tariff rates

Gradual adjustments to tariff rates for identified risk group

Disapplication of tariff rates

for Motor Comprehensive

and Motor Third Party Fire and Theft

Gradual adjustments to tariff rates

for Motor Third Party

for identified vehicle classes

Gradual adjustments to tariff rates

for identified risk groups

Assessment of the state of readiness of the industry and consumers for further liberalisation

< 2016

> 2016

> 2017

> 2019

LIBERALISATION OF MOTOR & FIRE TARIFFS

TIMELINE

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RECENT DEVELOPMENTS

UPCOMING RELEVANT REGULATIONS & REGULATORY POSITIONS

"We hope that before end of year to come out with guidelines on

cryptocurrency in particular those relating to anti money laundering

and terrorist financing. We want to ensure that there are clear

guidelines for those who want to participate in this sector,"

We expect to finalise the standards for e-KYC by October after

receiving industry comments. "Following this, the existing

requirement for face-to-face verifications for onboarding new

customers will be removed for companies that have received

approval to conduct e-KYC,"

CRYPTOCURRENCIES

Image Source: The Malay Mail-Tan Sri Muhammad bin Ibrahim

Governor, Central Bank of Malaysia

-Jessica Chew

Assistant Governor, Central Bank of Malaysia

e-KYC

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Powered by:REGULATORY ENVIRONMENTRECENT DEVELOPMENTS

ALLIANCE OF FINTECH COMMUNITY (aFINity@SC)

Conceived in 2015, launched by Goh Chin Ying who was at the time Executive Director of Market

Development. He ended his stint with Securities Commission and recently appointed as

Independent Non-Executive Director of Maybank

Set up for the following purposes:

Create awareness and catalyse development in FinTech;

Form hubs to organise and nurture a wider FinTech eco-system; and

Provide policy and regulatory clarity conducive for innovation.

aFINity@SC's RECENT ACTIVITIESLimited activities since its initial call for industry participation

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EQUITY CROWDFUNDING PLATFORM (ECF)

Framework issued in 2015, first country in Asia Pacific to legislate Equity Crowdfunding platforms

Issued license for 6 market operators

All Equity Crowdfunding must be locally incorporated

Only locally incorporated companies can be hosted on the platform (except for exempt private companies)

Issuers are not allowed to be hosted on multiple ECF platforms but can raise funds through both ECF & P2P

FI's, Public Listed companies, Companies without specific business plans and companies exceeding 5 million

paid up capital are not allow on the platform

In a 12 months period an issuer can raise up to 3 million MYR and can raise no more than 5 million MYR from ECF

No limitations on investment sums from Private Equities & Venture Capitalists

Limitations of 500,000 MYR for angel investors

Limitations of 5,000 MYR per issuer and 50,000 in a 12 months period for retail investors

Still open for application

APPROVED OPERATORS

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PEER TO PEER FINANCING (P2P)

Framework issued in 2016 , first ASEAN country to regulate P2P financing

Issued license for 6 market operators

All P2P platforms must be locally incorporated and have a minimum paid-up capital of 5 Million

MYR

Primarily intended for private companies and does not apply to individuals

FI's, Public Listed companies, Companies without specific business plans are not allowed on the

platform

Issuers are not allowed to be hosted on multiple P2P platforms but can raise funds through both

ECF & P2P

No investment restriction for Private Equities, Venture Capitalists and Angel Investors

Limitation 50,000 MYR investment applies to retail investors

Still open to application

APPROVED OPERATORS

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UPCOMING RELEVANT REGULATIONS & REGULATORY POSITIONS

DIGITAL INVESTMENT MANAGER FRAMEWORK ( DIM/ROBO-ADVISORY)

The requisite technology capabilities are in place including identification of competent person

within the company who has sufficient understanding of the risks and rules of the algorithm

applied

The risk management framework must be robust including cyber resilience

Written policies are in place to monitor and regularly test the algorithm employed.

Portfolio Manager are allowed to apply provided they meet the pre-requisites. No seperate

entity required

Technology/Algorithm may be outsourced but DIM is accountable for all outsourced functions

Licensees are yet to be announced by predicted to be officially announced during SCxSC

Forum 2017 in November

Further details are not publicly available

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Powered by:ECOSYSTEM BUILDERS

Fintech Association of Malaysia

Set up in October 2016 with the intention

of being the voice of the industry

Malaysian Digital Economy CorporationGovernment linked agency set up to catalyse the

digital economy has dedicated teams for fintech and

startups

Malaysian Global Innovation

& Creativity Centre Creativity & Innovation centre for

entrepreneurs set up by the current Prime

Minister. Has made some investments into

fintech startups

Cradle FundAn agency under the Ministry of Finance, provides

funding for early stage startups. Recently raised 1.3

million MYR with ECF platform PitchIn for a fintech

startup

Supercharger Fintech Accelerator from Hong Kong,

recently expanded to Malaysia in

collobaration with MDEC. Selected 10

startups for their first cohort.

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Powered by:BANKS WORKING WITH FINTECH

MaybankLargest bank

20 Countries, 2400 branches

45,000 employees

Organised the annual Maybank

Fintech for 3 years

Partnered with the likes of Alipay &

Samsung Pay

Recently launched fintech Open API

platform Maybank Sandbox

2nd Largest bank


39,000 employees

Recently set up a dedicated fintech

unit headed by former DBS banker

Olivier Crespin

Has partnerships with

Startupbootcamp

CIMB BANK

RHB Bank4th Largest Bank


12,000 employees

Ran their 2nd Fintech Hackathon with

Startupbootcamp

Formally partnering with 3 fintech

startups

Recently launched a rudimentary

chatbot for loan application with

financial aggregator Ringgit Plus

3rd Largest Bank

7 Countries, 200 Branches

18,000 employees

Almost consistently the most profitable

bank

Historically more conservative with

technology

No major media announcement for

fintech collaboration

Posted openings for fintech executive

positions on job boards

Recently made a microsite calling for

collaboration with fintech

Public Bank

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Powered by:BANKS WORKING WITH FINTECH

Hong Leong Bank5th Largest bank


12,000 employees

Oldest local bank

Launched the inaugural Launchpad

(fintech startup programme) in 2017

3 Months programme with 25,000 MYR

allowance.

Funding opportunity up to 1 Million

MYR with Cradle

6th Largest Bank

175 Branches

11,000 employees

Made several media announcements

on willingness to partner with fintech

Reported to be beta testing a

merchant portal with a fintech

company, company name not

disclosed

Minimal significant partnership

activities

AmBank

6th Largest Bank

Headquarted in Singapore


24,000 employees

Majority of fintech activity focused in

Singapore with UOB FinLab and Open

Vault

Recently started a recruitment drive

for fintech positions in Malaysia

Fintech News Singapore predicts that

more annoucements will come next

year

UOB Bank

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MALAYSIA FINTECH MAP

WALLETS CURRENCY EXCHANGECURRENCY EXCHANGE

ISLAMIC FINTECH

CROWDFUNDING

CURRENCY EXCHANGE

PAYMENTS

INSURTECH

BLOCKCHAIN

COMPARISON SITES AI

LENDING

REMITTANCE

PERSONAL FINANCE

KYC

MARKETPLACE

www.fintechnews.my @FintechNewsMalaysia

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www.fintechnews.my

VINCENT FONGChief Editor Malaysia [email protected]

If we've missed you out, or you would like to reach out for media or advertising contact kindly reach out to:

@FintechNewsMalaysia

CHRISTIAN KONIGFounder [email protected]

Documents

FINTECH STARTUP REPORT - Internet Alliance (IA)...FINTECH STARTUP REPORT Author: vince_whatever Keywords: DACi8QzDxZM Created Date: 20171013051557Z