Fintech, higher savings rates help boost Asia’s economy

Sabah-boy-made-good Datuk Seri Andrew Sheng and currently the chief adviser to the China Banking Regulatory Commission

KUALA LUMPUR: The new wave of financial technology (fintech) coupled with high savings rates in Asia can help boost the region’s economy, Khazanah Research Institute trustee Tan Sri Andrew Sheng said. 

He said fintech gave faster access to funds and being a net lender, the technology was revolutionising the approach to financial services. 

“The whole idea of fintech is to raise the equity-based capital for young people to start new businesses, as well as create jobs and services, which could eventually drive economic growth,” he told reporters after speaking at the launch of the World In 2050 Publication in Kuala Lumpur on Tuesday. 

He said fintech developments such as blockchain, artificial intelligence and biometric applications were expanding the frontiers of banking. “Hence, Malaysia can benefit much from fintech as the country has one of the highest savings rates (in the region) at 40%. 

“With higher savings not only in Malaysia but also in most Asian countries, business models can shift from debt-based models such as borrowing from banks to an equity-based model like crowdfunding. 

“When we save a lot, where does the money go? Some people might invest in the US dollar, but if we give our young people a chance and invest in their start-ups, maybe this is where the new transformation will come from,” he said. 

Sheng said the increasing risks and uncertainties in the 21st century from geopolitics, technology, climate change and social inequities required higher equity-based business models, which is radically different from the debt-driven models of the 20th century. 

The World In 2050 Publication is a book that debates on what kind of economic and social outlook the world would be like 34 years from now. 

It is published by the Oxford University Press and edited by chief executive of Emerging Markets Forum Harinder S. Kohli. - Bernama