LETTERS: Malaysia is rapidly becoming a financial technology (fintech) powerhouse, driven by the expansion of the digital economy and strong governmental support for technological innovation.
As Southeast Asia's third-largest economy, the country is highly connected, boasting a remarkable 132 per cent mobile phone penetration and 78 per cent smartphone usage, according to data from the Malaysian Communications and Multimedia Commission.
With 86 per cent of Malaysians online, the country's shift towards digital payments is a natural progression. Around 70 per cent of the population is already familiar with digital payments, signalling Malaysia's move toward becoming a cashless society.
The country's strong digital foundation was recognised globally when it ranked 34th out of 139 countries in the World Economic Forum's 2019 Network Readiness Index.
The benefits of moving towards fintech are far-reaching. Bank Negara Malaysia estimates that the shift to cashless payments could lead to cost reductions equivalent to one per cent of the country's GDP.
Fintech plays a key role in Malaysia's broader strategy of leveraging digitalisation for sustainable development. Our potential as a digital leader has not gone unnoticed by global tech giants.
Major investments from Amazon Web Services (AWS), Microsoft, Google and Oracle will help accelerate the country's digital transformation. Collectively, these tech companies have pledged US$$16.9 billion (RM70.3 billion) to enhance Malaysia's digital infrastructure, with Oracle alone investing US$$6.5 billion to build its first public cloud data centre in the country.
This significant influx of foreign direct investments is expected to solidify Malaysia's position as a regional hub for cloud computing and artificial intelligence (AI). The investments will not only bolster Malaysia's digital infrastructure but also make the country an attractive location for fintech innovations.
Prime Minister Datuk Seri Anwar Ibrahim has warmly welcomed these investments, highlighting their transformative potential for our economy and reflecting global confidence in Malaysia's role as a digital innovation gateway for Southeast Asia.
Maintaining this momentum will be a key challenge moving forward. The focus must now shift to sustaining this growth. Malaysia must invest in creating a generation of digital natives who are comfortable with modern payment technologies and financial tools.
Another important consideration is the regulatory environment. As Malaysia develops its fintech ecosystem, it must balance fostering innovation with ensuring consumer protection, vital for the sector's long-term success.
DR SITI AISAH BOHARI
Senior Lecturer,
Faculty of Business and Economics,
Universiti Malaya
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times