Bank Negara: Concept paper on fintech almost ready

KUALA LUMPUR: Bank Negara Malaysia (BNM) said the concept paper on financial technology (fintech) that will be the guideline for financial institutions is almost finalised, following the discussion paper on the fintech regulatory sandbox issued by the central bank last July.
It was reported that the guideline is expected to be released by the fourth quarter of the year, which will enable the adoption of fintech.
“Our concept paper is almost finalised. We have received feedback from the industry. So we will finalise it and will become the guideline for the financial institutions,” BNM governor Datuk Muhammad Ibrahim told reporters after delivering his remarks at the opening of the “Global Symposium on Innovative Financial Inclusion” here yesterday.
“We are quite happy that we are able to do it within the stipulated time,” said.
Previously, BNM said the sandbox is its key initiative to provide a conducive regulatory environment for the adoption of innovative fintech solutions, following the establishment of the Financial Technology Enabler Group (FTEG) last June.
The central bank said the FTEG would formulate and enhance the regulatory policies in order to facilitate the adoption of fintech in the country.
The sandbox would provide the regulated financial institutions and fintech companies with certain regulatory flexibilities to experiment with fintech solutions in a production or live environment, subject to appropriate safeguards and regulatory requirements, it added.
Earlier, in his opening remarks, Muhammad said financial innovations have continued to penetrate almost every aspect of financial activity, driven by faster computing speed, lowest cost of storage and faster problem-solving capabilities.
“Technology is being used by financial institutions to improve operations – from improving customer experience to constructing better models to manage risks more efficiently and effectively.
“In many cases, strategic partnerships with fintech companies have been established to achieve similar outcomes,” he noted.
Therefore, Muhammad said, policymakers can play a meaningful role to promote an enabling environment for innovation to support financial inclusion initiatives.
He emphasised that regulation should aim to be technology-neutral and outcome-focused, proportionate to risks and harmonised across sectors.
“Policymakers should also seek opportunities to promote the interoperability of supporting infrastructure for new financial innovations. This will preserve healthy competition and strong incentives for providers to continue innovating value-add solutions that meet the real needs of consumers,” he added.
The global symposium is the inaugural gathering of public sector regulators, private sector innovators and funders specifically focused on the use of financial innovation to support financial inclusion.