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Fintech Is An Opportunity To The M'sian Banking Industry
Last update: 19/06/2017

KUALA LUMPUR, June 19 (Bernama) --Fintech is an opportunity, not a threat to the Malaysian banking industry, says HSBC Bank Malaysia.

Chief Executive Officer Mukhtar Hussain said the new wave of financial technology,better known as fintech, is often portrayed as a disruptive force that threatens banks with new, agile and savvy competitors.

Globally, fintech is transforming the way people and companies connect with their banks, and how banks manage their back-office operations, said Mukhtar in a statement today.

"Fintech complements rather than threatens banking institutions. Banking has always been about technology.So, today's financial-technology innovation boom represents an evolution, rather than revolution for traditional banking.

"It is supplementing and diversifying the existing financial system and not replacing or disrupting it," he said.

The fintech market has attracted a gold rush of investments in recent years, particularly by venture capital firms eager to back start-ups in the sector.

In the Asia Pacific region alone, investment in fintech players rose from US$103 million in 2010 to US$4.3 billion in 2015.

Furthermore, in the first seven months of 2016, investments in the region reached US$9.6 billion, doubling 2015's figure.

Within the ASEAN region specifically, the Internet economy is expected to grow to US$200 billion by 2025, and Internet users almost doubling to 480 million by 2020.

Fintech's will have a key role to play in spurring this growth, so much so that ASEAN's financial institutions must embrace the fintech wave or risk losing the competitive edge.

However, to say that the fintech boom is cannibalising traditional banking would be an exaggeration, said Mukhtar.

Fintech is currently only focusing on a mere fraction of the financial-services spectrum.

Mukhtar said to date, much of the focus of Fintech's have been on retail banking services -- lending and financing- along with payment-related products and services, where mobile and e-commerce has led to real demand from consumers.

With fintech gaining significant momentum, banks are now looking at how they can co-operate or co-innovate with start-ups, rather than compete directly.

"Big banks and fintech start-ups have a great deal to offer each other. Banks have a large customer base, stable infrastructure, assets and regulatory know-how.

"Start-ups provide out-of-the-box thinking, technical expertise, and agility to adapt quickly to change," said Mukhtar.

--BERNAMA

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