KUALA LUMPUR: Malaysia has surpassed its digital payment target at 405 transactions per capita, said Bank Negara Malaysia (BNM).
BNM assistant governor Suhaimi Ali said the target under the financial sector blueprint was to achieve 400 transactions per capita by the end of 2026.
“In digital payments, we’ve reached 405 transactions per capita today. This means we are well ahead of schedule in e-payments,” he said in a panel session at the SCxSC Fintech Summit 2024 today.
At the national level, Suhaimi said, Malaysia is not short of initiatives to foster innovation through a combination of robust policy, frameworks, strategic initiatives, and collaborative partnerships.
“Key national strategies and digital programmes have been rolled out. The challenge for us is always execution. That has always been a challenge for Malaysia as a country,” he remarked.
He said BNM recognises the renewed approach to emerging innovation. “This is timely for us to also relook at how we do things at Bank Negara.”
Suhaimi said the central bank is guided by the principles of parity, proportionality, and neutrality. “Same rules, proportionality, same risk level, the same kind of revelation. And neutrality typically requires outcomes over any technology or particular submission.”
Suhaimi said BNM’s reforms so far have been directed to remove barriers to innovation and address market failures. “This entails modernising our regulatory framework while opening everything for more flexible pathways or in a way to innovate safely and responsibly.”
Suhaimi highlighted notable developments that have been achieved, including a refresh of the regulatory sandbox which now features two main tracks to accelerate the time to live testing.
He pointed to the regulatory sandbox that was launched by BNM with the aim of providing a regulatory environment that is conducive for the deployment of financial technology and facilitate overall innovation in the Malaysian financial sector.
He was referencing Standard Sandbox, which refers to standard procedures introduced in October 2016 to allow fintech companies to test innovative solutions, and Green Lane, an accelerated track introduced in February this year that provides a simpler and quicker way for financial institutions with a strong track record in risk management capabilities to test innovative solutions that face regulatory impediments.
“We have a three screening and mentorship programme which offers advice and support to both tech companies and financial institutions,” he added.
Suhaimi said that this is part of its efforts to be “a bit more collaborative” with ecosystem players. “In the past, people always argued that BNM is an ivory tower organisation, won’t talk to people, is very difficult to talk to, not accessible, etc.”
Suhaimi said the central bank is changing its posturing because it recognises that a lot of things that it used to be able to do itself in the past, via its first and second blueprint, can no longer be done individually under the third blueprint. “It requires a whole-of-nation approach and collaborative partnership with different stakeholders.”
Suhaimi also pointed to another achievement – digital bank and digital insurance framework.
“We have also launched the DITO framework (digital insurers and takaful operators framework) in July this year, laying a foundation for a more innovative insurance landscape and providing some of the needed clarity to some of the fintech companies in the insurance space,” he said.
