Remarks at the Virtual Innovation Day Organised by Otoritas Jasa Keuangan (OJK)
24 August 2020  |   By: Datuk Syed Zaid Albar, Chairman, Securities Commission Malaysia
Remarks by Datuk Syed Zaid Albar
Chairman, Securities Commission Malaysia
at the Virtual Innovation Day
Organised by Otoritas Jasa Keuangan (OJK)
24 August 2020

1. Selamat siang Ibu Ir. Nurhaida dan para hadirin yang dihormati sekalian. Terlebih dahulu, saya ingin mengungkap terima kasih kerana sudi mengundang saya untuk berbicara di peristiwa yang penting ini.
2. Hubungan Malaysia dengan Indonesia ibarat saudara kembar yang ada kalanya nakal dalam jenakanya tetapi penuh kasih dan hormat dalam hubungannya. Saya berasa senang sekali kerana diberikan kesempatan untuk berkumpul bersama-sama hadirin yang saya hormati sekalian walaupun secara virtual.
3. Saya ingin mengucapkan selamat kepada rekan imbangan pihak kami, iaitu Otoritas Jasa Keuangan (OJK), atas Hari Inovasi Virtual-nya. Di sini, izinkan saya meneruskan ucapan saya dalam Bahasa Inggris.
4. We had earlier witnessed the signing of the Memorandum of Understanding on Financial Technology (Fintech) Cooperation between the Securities Commission Malaysia and OJK, a strategic move essential for continued market growth.
5. I am glad that we have been able to proceed with the event, despite restrictions and disruptions brought about by the pandemic. Thanks to the advancements in technology, virtual meetings are the new normal. The virtual signing of this Fintech MoU is proof of this, even though Vice Chairman Ir. Nurhaida and I are both miles apart. 
6. Indeed, it is said that necessity is the mother of invention and notwithstanding the deadly toll the virus has taken across the world, the pandemic forced us to re-organise our daily lives and also accelerate changes in business models and structures. Whether we like it or not, there is a shift to a new digital reality. Today’s theme – “Innovation In Times Of Crisis” - resonates strongly with what the world is experiencing now.
7. The signing of this MoU marks an important milestone for both the SC and OJK. We now share a mutual intent to promote innovation in our respective capital markets and we believe that through collaboration, we can develop and scale up our respective Fintech industries, regardless of their size.
8. This MoU establishes a framework for cooperation and referrals between our 2 jurisdictions. This includes a direct channel for the Alliance of FINtech Community of the SC and the Digital Financial Innovation Group of OJK to connect on Fintech matters.
9. In particular, the MoU will facilitate information sharing on trends and regulatory developments in Fintech and provide opportunities for collaboration in joint innovation projects. It also facilitates referrals of Fintech businesses, seeking to operate in each other’s jurisdiction.

Malaysia weathering the Covid-19 storm

Ladies and Gentlemen,

10. In the context of the Malaysian capital market, Fintech has gained momentum despite us facing a slowdown in overall economic activity.
11. Total funds raised through equity crowdfunding for the first    six months this year recorded an increase of about 70% compared    to the whole of last year. Our P2P financing platforms have to-date closed more than 2,700 successful campaigns this year, (2020)1.
12.  It is interesting that recent fundraising proposals were for online food and beverage and e-commerce services, as well as healthcare-related businesses. This is reflective of small business owners seizing opportunities from increased health awareness and the demand for more convenience. Fortunately, digital platforms were able to fulfil their financing needs.
13. We are also encouraged to see greater investor participation in the market this year.
14. Malaysia’s digital investment segment saw more than double the number of accounts opened in the first half of 2020 compared to 20192. The segment’s assets under management has also been trending upwards.3
15. Increased retail demand for online stock trading has translated into significant increases in trading volumes in the Malaysian stock market this year.
Nurturing Empowered Investors
Ladies and Gentlemen,
16. The accessibility of financial services through digital tools, underscores the importance of instilling basic knowledge of finance and investment within the general population.
17. In fact, at the national level, Malaysia has a five-year ‘National Strategy for Financial Literacy’. It seeks to improve the financial well-being of Malaysians by providing necessary tools and skills   to elevate their financial and investment literacy.
18. In this regard, SC Malaysia believes that greater investment literacy can empower investors. A vigilant and knowledgeable investor will be able to assess investment products that are suitable for their needs.
19. Therefore, we have increasingly focused on enhancing investment literacy to complement greater financial inclusion brought about by Fintech.
20. I believe OJK Indonesia, also shares similar regulatory objectives, given the session on digital financial literacy this afternoon.

Fintech growth opportunities  

Ladies and Gentlemen,
21. Fintech will be integral to the continued growth and prosperity of ASEAN.
22. With a population of 670 million4 and an expected GDP of US$4.7 trillion by 2025, ASEAN represents one of the world’s fastest-growing5 regions. Given its emerging middle class and high internet penetration rates6, we in ASEAN have the potential to become a thriving center for innovative businesses and services.
23. Technology certainly has proven to be inclusive through its reach. Moving forward, it can also serve as a tool for better regional integration.
24. Regulatory collaboration between member nations such as this, are part of efforts to realise the vision of an ASEAN Economic Community7. We have to leverage each other’s strengths to nurture the development of Fintech in both domestic and regional markets. Today signals the commitment of SC Malaysia and OJK Indonesia, to provide such facilitation for our home-grown innovative firms.
25. It is heartening to note that the Virtual Innovation Day has managed to secure the attendance of Fintech communities in Malaysia and Indonesia. We certainly encourage Fintech firms from both countries to use the “Fintech bridge” we have created to access greater regional opportunities.

Closing

Ladies and Gentlemen,
26. With regulatory support complementing the private sector’s drive and energy, I have no doubt the region’s Fintech landscape will radically transform in the coming years.
27. SC Malaysia’s position has always been facilitative of digital innovation that will better serve the needs of our economy. At  the same time, we are also mindful to keep watch over potential sources of risk. Whilst regulation should be adaptive, it must also balance and harmonise business needs with investor protection.
28. As part of ongoing efforts to raise public awareness, we will be hosting our annual Fintech Conference SCxSC (SC by SC) from 5th to 7th October 2020. This year will be the first time it is held virtually.
29. Topics this year include Fintech thriving during the pandemic, Shariah-compliance of digital assets and Gamification in Finance. I would like to take this opportunity to invite all of you to this event and please register at our SCxSC website
30. Before I end, please allow me to record my deep appreciation to OJK for inviting me to speak today. Terima kasih sekali lagi, and I wish you all a fruitful and engaging session ahead.

1
2,722 successful P2P campaign this year as at June 2020
2
2019: 21,291 new accounts opened. 2020 (until June): 67,907 new accounts opened.

3

CAGR calculated for the first six months of 2020 on cumulative DIM AUM is 13.62%

7

The ASEAN Economic Community’s vision for 2025 is focused on closing the digital gap, increasing financial access and literacy, expanding the scope of intermediary facilities and developing more inclusive financial services for small businesses and lower income groups
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