| Good morning, | |
| 1. | It is a pleasure to welcome all of you to the eighth SC x SC Fintech Conference. |
| 2. | In the years to come, 2020 will be remembered as the year that changed the world. In the midst of dampened social activities, the COVID-19 pandemic had resulted in an unexpected evolution of the digital world. |
| 3. | As lockdowns became the new normal, we are forced to adapt to be more reliant on digital connections for work, education, finance and even our lifestyle. |
| 4. | According to the Fintech Malaysia Report 2021, online and mobile banking penetration increased by 125 percent in 2020 from the previous year. The adoption of digital finance boomed across other fintech segments including e-remittances, wealthtech, alternative financing and crypto trading1. |
| 5. | Such is the speed of change that it is important to stay abreast of new developments and trends. |
| 6. | This year’s event provides an opportunity to reflect on the future of Fintech’s role. We are honoured to have experts who I am confident will spark interesting discussions on new trends how digitisation can enhance the capital market’s growth. |
| 7. | For the first time ever, SC x SC will host dual-track streams throughout these 3 days. By doing so, we hope we can keep the conversations broad and engaging, to nurture new ideas. |
| 8. | There is also a virtual exhibition showcasing a suite of solutions, as well as a new Village of Solutions segment that allows delegates to explore available innovations. Please do not pass up on this opportunity to take advantage of the many amenities on offer. |
| 9. | This extensive programme of activities owes much to the continued support of the industry and its stakeholders. Therefore, I would like to acknowledge and thank our partners – MDEC2, Rakuten Trade, our FIKRA co-host UNCDF3 and industry collaborators, exhibitors, members of the media - for their invaluable contributions. |
Ladies and Gentlemen, Snapshot of SC x SC topics |
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| 10. | Technology will continue to play an important role in shaping the capital market ecosystem. In fact, it is one of the Capital Market Masterplan 3 main thrusts, which envisions the greater use of digital tools to enhance efficiencies and increase investor participation in our capital market. |
| 11. | This year, we are focusing on Islamic fintech. We believe that cultivating Islamic finance’s digital capabilities is essential to propel the growth of Shariah investing and attract new participants to Malaysia’s Islamic capital market. |
| 12. | We collaborated with UNCDF earlier this year to launch FIKRA, the first regulator-led Islamic fintech accelerator programme. On the third day of SC x SC, you will have the opportunity to view the FIKRA showcase which will feature a variety of FIKRA solutions on offer. |
| 13. | Another focus of this year’s programme is RegTech, or the use of technology to meet regulatory requirements. The SC conducted a RegTech Industry Survey among broking intermediaries and fund managers, and will be sharing the various RegTech solutions used by intermediaries, the level of adoption, as well as key drivers and challenges among other things. |
| 14. | There will also be panel discussions on the rise of embedded finance, Non-Fungible Tokens (NFTs) as future collectibles, quantum computing in finance and our role in this digital age. |
| 15. | We hope that you will benefit from these sessions; build on the collective awareness and exchange of ideas about innovative and sustainable solutions to become part of a catalytic instrument that will contribute to broad-based economic growth. |
Ladies and Gentlemen, Importance of remaining vigilant at all times |
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| 16. | While technology has increased capital market accessibility, it has also given rise to more creative means for scams and illegal activities. |
| 17. | The SC is collaborating with the industry to address emerging technology risks and to strengthen industry preparedness and resilience in the face of cyber threats. |
| 18. | To keep the public informed about authorised investment products, we have conducted a number of investor education initiatives and anti-scam awareness campaigns. Furthermore, our Investor Alert list is regularly updated to warn of individuals or entities suspected of offering capital market products or services without SC authorisation. |
| 19. | I would like to take this opportunity to remind everyone to be cautious and vigilant at all times. Asking questions and being sceptical are some of the best ways to avoid investment fraud. If you become aware of any suspicious activity, please come forward and report them. Let us work together to help others and prevent investment scams. |
Ladies and Gentlemen, Fintech to help us build back better |
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| 20. | The pandemic has had an adverse impact on corporations and communities worldwide, particularly the most vulnerable. As we rebuild, fintech will be a crucial enabler of economic recovery and transformation. |
| 21. | We have seen how small businesses had been badly impacted. Last year, SMEs’ share of GDP fell by 7.34 percent compared to a 5.6 percent contraction in overall GDP. This is the first time in 17 years that SME GDP growth has been less than Malaysia’s GDP growth. However, it is encouraging to see that equity crowdfunding (ECF) and peer-to-peer (P2P) financing platforms have risen to the challenge of supporting the funding needs of MSMEs. |
| 22. | Despite an initial decline in fundraising activities in the first quarter of 2020, these alternative platforms recovered to help MSMEs raise a total of more than RM1.3 billion since April last year. The amounts raised through ECF and P2P in the first half of 2021 are up by 151% and 220% respectively, compared to the same period in 2020. Since their inception, ECF and P2P financing have aided close to 4,000 MSMEs. |
| 23. | In addition, the Malaysia Co-Investment Fund or MyCIF, a public-private co-investment vehicle, proved particularly effective during the pandemic. Its participation gave investors confidence to continue investing through ECF and P2P platforms. Thus far, since MyCIF became operational, private investors have provided three times the funding compared to the government‘s co-investments of over RM260 million. |
Ladies and Gentlemen, A Break in the Clouds |
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| 24. | Despite market uncertainties, investor participation in alternative and digital platforms continues to be robust. There are plenty of positives to take from this year that I want to share with you. |
| 25. | With nearly 60%5 of individual investors under the age of 35 and accounting for more than four fifths6 of participating investors, ECF and P2P are appealing to the masses. |
| 26. | The digital asset exchanges in Malaysia continue to thrive this year, with over 300,0007 new accounts created so far. Since its introduction in 2019, the volume of digital assets traded has surpassed a billion, with a value in excess RM16 billion as at September 2021. |
| 27. | New digital investment management or DIM entrants have contributed to the segment’s assets under management growth. In fact, compared to last year, our eight licensed DIM holders have opened 90%8 more DIM accounts this year. |
| 28. | DIM also continues to appeal to the younger generation with nearly three-fourths of investors are under the age of 359. While nearly 70% of DIM account holders are men, women-held accounts have nearly doubled10 since December last year – a positive step towards closing the gender investment gap. |
| 29. | Furthermore, increased demand for online brokerage services has resulted in a nearly 35% increase in new accounts opened as of July 2021. |
| 30. | These positive developments show that while pandemic-related challenges remain, there are silver linings in terms of greater investor digital uptake and interest in digital offerings. We anticipate the industry to maintain this encouraging growth performance this year, and I would like to commend our Fintech players for the continued enthusiasm and perseverance in the face of adversity. |
Ladies and Gentlemen, Closing |
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| 31. | To conclude, I would like to quote Muhammad Yunus, the founder of Grameen Bank and a pioneer in microfinance who said, “While technology is important, it's what we do with it that truly matters”. |
| 32. | As a market regulator, we recognise digital technology’s potential to transform the capital market and benefit the masses - including the underserved and vulnerable segments of society. |
| 33. | As we work to build a relevant, efficient and diversified capital market in line with the CMP3’s aspirations, technology will have a significant role in facilitating fundraising for all types of companies, as well as encouraging market innovation and financial inclusion. |
| 34. | With that, I wish you a fruitful discussions and deliberations ahead at SC x SC 2021. |
| Thank you. | |
