In his opening remarks at the SC’s eighth annual fintech conference SCxSC, the SC Chairman Datuk Syed Zaid Albar emphasised the importance of technology and fintech in shaping the capital market ecosystem. “Technology is in fact one of the main thrusts of the Capital Market Masterplan 3, where we envision greater use of digital capability to facilitate fundraising for companies of all sizes while encouraging market innovation and financial inclusion.”

“We have seen how small businesses have been badly impacted by the global response to the pandemic. Last year, Small and Medium Enterprises’ GDP contracted 7.3%, sharper than the decline in Malaysia’s GDP and non-SMEs GDP which shrank by 5.6% and 4.6% respectively. This is the first time in 17 years that SME GDP has been lower than Malaysia’s GDP,” said Datuk Syed Zaid.

However, during the pandemic, the SC noted encouraging developments where equity crowdfunding (ECF) and peer-to-peer (P2P) financing platforms continued to meet and support the funding needs of Micro, Small and Medium Enterprises (MSMEs).

There are currently 21 ECF and P2P platforms registered with the SC, which have collectively raised more than RM2.2 billion for close to 4,000 MSMEs since their inception. Despite an initial decline in fundraising activities due to the movement control order in the first quarter of 2020, the SC stated that these alternative platforms had assisted MSMEs in raising more than RM1.3 billion since April last year. In the first half of 2021 alone, a further RM625 million was raised through ECF and P2P, an increase of 151% and 220% respectively, compared to the same period in 2020. ECF and P2P attracted young investors with nearly 60% of participants aged below 35.

The digital asset exchanges in Malaysia also continue to thrive, with over 300,000 new accounts opened this year to-date. Since its introduction in 2019, the volume of digital assets traded has surpassed a billion, with values in excess of RM16 billion as at September 2021.

New digital investment management (DIM) entrants have also contributed to the growth of assets under management in the capital market. As of July 2021, the eight licensed DIM operators have seen a 90% jump in new account openings compared to 2020 with nearly 75% of account holders under the age of 35. Meanwhile, continuous demand for online brokerage services resulted in a 35% increase in new account openings during the same period.

The SCxSC fintech conference is the SC’s flagship fintech event to drive the conversations on fintech and digitisation in the capital market. For the first time, the 3-day event will be held on dual-track streams, allowing the conference to cater to more topics and broaden the issues for discussion. The conference also introduces a ‘Village of Solutions’ that will showcase a suite of solutions from SCxSC partners and exhibitors.

SCxSC 2021 will focus on Islamic Fintech and Regtech. “We believe that cultivating Islamic finance digital capabilities is essential to propel the growth of Shariah investing and attract new participants to Malaysia’s Islamic capital market,” Datuk Syed Zaid added. This year, participants will also have the opportunity to experience first-hand the FIKRA showcase and its variety of solutions on offer. FIKRA, the SC’s first regulator-led Islamic fintech accelerator programme, was launched earlier this year to identify and scale relevant Islamic fintech solutions to support the growth of innovative start-ups.

Other topics covered at SCxSC 2021 include the rise of embedded finance, Non-Fungible Tokens (NFTs) as future collectables and quantum computing in finance amongst others.

The SCxSC is held virtually from 26 to 28 October 2021. Members of the public can register for free and tune in to the livestream at scxsc.my