Malaysia Fintech Market - Growth, Trends, Covid-19 Impact and Forecast(2022 - 2027)

Malaysia Fintech Market - Growth, Trends, Covid-19 Impact and Forecast(2022 - 2027)

There has been negative impact of COVID-19 on Malaysian Fintech Market in the first 2 quarters of FY 2020. The coronavirus pandemic has shown an impact on the proper functioning of various industries across regions. It affected Malaysian Fintech Market and technology industry very badly. This was primarily due to reduced transactions because of lockdown being imposed and thus halt in businesses and money transfer or investments. the rise in fintech industry began taking place in last 2 quarters of 2020 and resulted in positive growth. Malaysia’s digital shift has been ongoing for the past decade but the pandemic has accelerated digital banking adoption. In 2020, online and mobile banking penetration reached 112.5% and 61.8% respectively, and RM 460 million worth of mobile banking transactions were conducted – a 125% jump compared to the previous year (2019).

Fintech has now become a central part of the Malaysia’s financial sector, with a considerable scope for expansion according to a recent IMF analysis. With its growing middle class, high mobile phone usage and a strong government support for digitization of the economy, Malaysian businesses and consumers appear ready to embrace fintech technology. Digital payments and wallets are leading the way in Malaysian fintech, followed shortly by insurtech, digital remittances, blockchain, crowdfunding and other forms of financial technology.

Internet banking in Malaysia has quadrupled over the last decade, supported by 4G coverage and affordable data to promote mobile banking. The financial sector landscape has also seen a change in the past couple of years with physical commercial bank branches reducing and the number of ATMs declining. All these statistics hint towards the fact that financial institutions have started shifting towards adopting fintech, which is in sharp contrast to the initial skepticism it received from them. Malaysia has also been ranked first among countries in emerging and developing Asia in the Network Readiness Index by the World Economic Forum in 2019.

Key Market TrendsRegulatory Changes Ignited Fintech Adoption

The Malaysian government’s Movement Control Order (MCO) acted as a catalyst, helping to add 3 million new mobile banking service subscribers last year as well as pushed e-wallet usage and adoption to new highs. Merchants were quick to embrace the trend, with over 400,000 new businesses registering for QR code payment acceptance, a 164% jump from the 2020.

In 2020, numerous regulatory changes being introduced to help digital finance thrive. In June'2020, Bank Negara Malaysia (BNM) issued a new policy framework on electronic know-your-customer (eKYC) to facilitate digital onboarding indicating growth in forecast period.

Digital e-Finance Adoption on the Rise

Booming adoption of digital finance was also observed across other fintech segments, including e-remittances, wealthtech, alternative financing and cryptocurrency trading.In e-remittance, total transaction value grew by 106% in 2020 as compared to the transaction of e-remittance in 2019. e-Remittance saw its market share grow from 14% to 25%, signaling that Malaysians are rapidly ditching traditional providers for new age, lower cost e-remittance providers.

Wealthtech also picked up in 2019 with over 175,000 new digital investment management accounts opened in 2020. In alternative financing, capital raised on equity crowdfunding platforms jumped more than 457% while peer-to-peer (P2P) lending value rose over 20%

Competitive Landscape

The Malaysia Fintech Market is highly competitive and fragmanted as Malaysia has been proven as the largest market of Fintech Industry throughout Asia. The Malaysia FinTech ecosystem is developing faster and faster each year, with more and more companies and incumbents seeking new opportunities to collaborate, connect and co-create that cater to numerous clients and cover a broad range of services such as digital payments, alternative finance, wealth management and blockchain, among others. Malaysia groups such as MyCash Online, Jirnexu, Mobi have been focusing on innovating FinTech industry and leading the Malaysia Fintech Market to the new heights.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned
 
Capital Bay
Jirnexu
Mobi
Moca
HelloGold
MoneyMatch
MyCash online
Prime keeper
Policy Street
pitchIN
Mhub*

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