Malaysia’s success in financial inclusion has been unique among most of the middle-income countries in the world. The efforts undertaken by Malaysian authorities over the past two decades have facilitated the establishment of an inclusive financial system. Owing to conducive regulations, innovation, and strengthening of the banking sector, most households in Malaysia now have access to a wide range of conventional and Islamic finance products and services and carry out electronic payments nationwide.
While Malaysia is on track to become a high-income nation by 2020, the growing community of migrant workers and adults living in rural areas with low education levels continue to lack access to formal financial institutions and financial services. However, a combination of factors like the increased adoption of smartphones, greater access to the Internet, and growing comfort of using technology have given rise to new solutions. Riding on an increasing demand-side and favourable enabling environment, fintechs in Malaysia are blending financial services and technology.
Given BNM’s proactive stance and an active collaboration between fintechs and incumbent financial service providers, technology-driven and innovative solutions are expected to emerge in Malaysia, creating a differentiated and compelling suite of product and service offerings to facilitate the integration of underserved segments, including migrant workers and B40 households, into the formal financial services sector.