Fintech changes the way institutions provide financial services

KUALA LUMPUR: Bank Negara Malaysia sees fintech as a means to enhance competition, increase productivity and fundamentally change the way institutions provide financial services.

Bank Negara governor Datuk Nor Shamsiah Mohd Yunus said technology could present significant opportunities to reduce the cost of financial intermediation and expand access.

“For example, distributed ledger technology could enable automated execution of contracts through the use of digital protocols or smart contracts, which can simplify complex Shariah contractual processes,” she said in her opening speech while kicking off the MyFintech Week 2019 conference today.

Shamsiah added that the integration of social finance into Islamic financial services encourages wealth distribution among society to achieve greater balance between wealth creation and wealth sharing.

“Ultimately, fintech in Malaysia should be harnessed to offer inclusive, sustainable and relevant financial products and services to serve the needs of all,” she said.

Shamsiah noted however that there is a need to be cognisant of the potential risks associated with technology.

“This will be especially important as fintech and big tech firms become more prominent in the financial system.

“Such firms could pose system-wide vulnerabilities that can amplify shocks to the financial system and cause financial and economic instability.”

The  MyFintech Week 2019 conference, Malaysia’s flagship fintech event, is being held until June 21 in conjunction with Malaysia Digital Economy Corp’s Malaysia Tech Week 2019.