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Malaysia joins fintech race

Standard Chartered Bank and Allianz have teamed up with Supercharger, a fintech accelerator programme that has expanded to Malaysia.

Supercharger will be choosing a handful of firms to join its programme in Malaysia. Those joining the programme will be given 12 weeks of free working space, access to network with angel investors and venture capitalists, mentoring programmes and workshops. 

The fintech candidate firms that are applying to the programme have varying businesses, such as peer-to-peer lending, regtech solutions and robo-advisories.

The programme is in conjunction with Standard Chartered Bank, Allianz and government-owned Malaysia Digital Economy Corporation (MDEC).

“By collaborating with MDEC and Allianz Malaysia to bring Super Charger to Malaysia, we are deepening our understanding of the potential of the fintech market,” Matthew Norris, Standard Chartered’s global head of global business services, said in a statement.

Last year, in the Hong Kong Supercharger programme, only eight finalists were chosen from a pool of around 200 applicants. One of them is Bambu, which offers robo-advisory services to high-net-worth individuals, affluent investors and retail investors. 

Wealth management

Supercharger’s move in Malaysia comes at a time when regulators and firms are grasping the importance of developing the country’s fintech industry.

For example, Bank Negara Malaysia, the country’s central bank, launched its “regulatory sandbox” that allows fintech companies to operate with relaxed regulations during a trial period. The bank has approved four firms to operate in the programme this year.

Investment and wealth management seems to be an area of interest in the country. Two of the firms that were approved to join Bank Negara’s sandbox are in the financial advisory sphere — Go Bear and Get Cover, according to the bank’s website.

The country also saw in July the launch of its first shariah-compliant robo-advisory platform, Algebra, which is operated by Singapore-based Farringdon Asset Management.

On the regulatory front, the Securities Commission (SC) Malaysia introduced the Digital Investment Management framework in May, which sets out licensing and conduct requirements for firms that want to offer automated discretionary portfolio management services to investors, according to statement from the regulator. 

“The framework aims to provide investors with a more convenient, affordable and accessible channel to manage and grow their wealth,” the SC said.

Local and global financial and fintech firms believe that investment and wealth management will be disrupted by technology, according to a KPMG fintech survey in Malaysia that was published in November.

Around 40% of respondents said that the sector will be disrupted over the next five years by fintech development. However, more firms believe that the areas that will see the biggest changes are fund transfers and payments, consumer banking and general property and casualty insurance.

“This is perhaps due to the threats insurance-focused fintech pose to the existing agency underwriting and distribution models,” the report said.

Regional fintech race

In Asia, Hong Kong and Singapore lead the fintech race and are in rivalry to make their home jurisdictions the most favourable for fintech investments.

Both regulators are moving at uncharacteristic speed, signing cross-border fintech agreements as well as creating sandboxes, innovation hubs and fintech associations.

Both jurisdictions have their own advantages. For example, a Deloitte report last year said that Singapore may be better in terms of government support and innovation culture, but Hong Kong’s proximity to China makes it a base for outbound mainland fintech companies to scale in Asia and potentially expand further.

Part of the Mark Allen Group.