Front Matter Page
IMF Country Report No. 20/58
MALAYSIA
SELECTED ISSUES
February 2020
This Selected Issues paper on Malaysia was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on January 23, 2020.
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Front Matter Page
MALAYSIA
SELECTED ISSUES
January 23, 2020
Approved By
Asia and Pacific Department
Prepared by Jochen M. Schmittmann and Chua Han Teng (all APD)
Contents
Glossary
FINTECH IN MALAYSIA
A. Introduction
B. Digitally Enabled to Capture FinTech Growth
C. Changing Financial Sector Landscape
D. FinTech and Incumbent FIs
E. Regulatory Environment: Balance Between Innovation and Financial Stability
F. Key Challenges
References
BOXES
1. Mobile Wallets in Malaysia
2. Examples of Malaysian FinTech Players
3. BNM’s FTEG FinTech Regulatory Sandbox
4. FinTech and Malaysia’s Vibrant Islamic Finance Landscape
FIGURE
1. Digital Readiness
TABLES
1. Malaysian Banks’ Digital Initiatives
2. Partnerships between Malaysian Banks and FinTech Startups
3. Initiatives and Regulations in Malaysia
Glossary
| Chatbot |
An artificial intelligence computer program that is designed to have a conversation with human users. |
| Cloud services |
The delivery of services such as servers, storage, databases, software, analytics over the internet (the cloud). |
| Crowdfunding |
The activity or process of raising money from a large number of people, usually through online platforms, for a project or a small business. |
| Cryptocurrency |
A digital asset that depends mainly on cryptography and distributed ledger technology as part of its perceived or inherent value. Bitcoin is an example of a cryptocurrency. |
| Electronic Know-Your-Customer (e-KYC) |
Paperless authentication process of the user, in which credentials such as identity and address can be verified electronically. |
| Electronic payment (e-Payment) |
A non-cash payment method that includes mobile payment, or through charge cards, credit cards and debit cards. |
| GrabPay |
The mobile wallet created by Grab, Southeast Asia’s largest ride-hailing operator. |
| Initial Coin Offering (ICO) |
An operation through which companies, entrepreneurs, developers or other promoters raise capital for their projects in exchange for digital tokens (or ‘coins’), that they create. |
| Insurtech |
The combination of insurance and technology, refers to the use of technology in insurance to raise efficiency, reduce costs, or improve customer service. |
| Interoperable Credit Transfer Framework (ICTF) |
A framework issued by Bank Negara Malaysia (BNM) that creates a shared payment infrastructure for banks and non-bank e-money issuers with the aim to promote collaborative competition. |
| Islamic finance |
Financial activity that is shariah-compliant. Key principles include the prohibition of charging interest (riba), uncertainty (gharar), speculation (maysir) and dealing with impermissible activities or products (such as alcohol). |
| Maybank QRPay |
An application by Maybank that allows users to pay at authorized merchants by scanning a QR code. |
| Mobile wallet |
Mobile wallets are smartphone applications that enable users to make online and in-person payments at authorized merchants via the mobile phone. |
| Open Application Program Interface (API) |
Publicly available programming interface for a software application or web service that a programmer can access with relatively few restrictions. |
| Quick response (QR) code |
The trademark for a machine-readable code that consists of an array of black and white squares, which usually stores URLs or other information that can be read by a camera of a smartphone. |
| Payments Network Malaysia Sdn Bhd (PayNet) |
A Malaysian payments infrastructure company that designs, builds and operates payments and financial market infrastructures. It is jointly owned by BNM and 11 Malaysian banks. |
| Peer-to-Peer (P2P) lending |
The lending of money to individuals or businesses through online platforms that match lenders to borrowers. |
| Regtech |
The use of technology in regulation. |
| Regulatory sandbox |
A framework that allows for the experimentation of innovative FinTech solutions in a live market environment within specified parameters and timeframes. |
| Sukuk |
Debt security structured under any Shariah compliant contract, which is also known as an Islamic bond. |
| Takaful |
A type of Islamic insurance in which at least two parties agree to jointly guarantee one another in the event of a loss or damage. |