IDC Financial Insights recently unveiled a list of 10 fast-growing fintechs in Malaysia, part of the broader FinTech 101 list for Asia/Pacific, at the FinTech Innovation Summit 2017 held at InterContinental, Kuala Lumpur, Malaysia.  “IDC’s FinTech Fast 101” refers to the fast-growing FinTech players in Asia/Pacific based on extensive on-ground analysis of the dominant fintech players in the region.

IDC’s fintech list makes a reference to the “Triple U” framework — ubiquity, utility, and usability. This is an efficient global framework, which evaluates data from many key metrics such as addressable market, customer adoption, investments, chance of survival, innovation, and marketing. IDC Financial Insights believes that newer categories that are gaining traction include digital identity and authentication, bitcoin and other cryptocurrencies exchanges, robo-advisory, credit scoring, and usage-based insurance.

“The key theme for Malaysian fintechs moving forward is to grow beyond the country. 2018 will be a banner year for Asia/Pacific fintechs to regionalize – similar to the journeys of Alipay and Grab – so Malaysian companies will have to compete fervently against those from other markets. They all need to achieve scale and ubiquity as quickly as possible,” remarked Michael Araneta, Associate Vice-President for IDC Financial Insights.

“In Malaysia, the disruption is visible mostly in payments, followed by lending, wealth management, marketplace and crowdfunding. These fintech players are moving fast in their alliances and partnerships with financial services institutions and continuously innovating to make their products and solutions better. We also see successful fintechs in payments including remittances and money transfers expanding into m-commerce as a viable growth strategy,” Araneta said.

IDC also pointed to a positive change in outlook for a majority of financial services institutions that now view fintechs as possible collaborators or acquisition targets. This is quite an improvement from how traditional industry players initially viewed fintechs as pure disruptors. Recent support from Bank Negara Malaysia in the form of regulatory sandbox and Malaysia Digital Economy Corporation’s (MDEC) introduction of Malaysia Digital Hub (MDH) and the Malaysia Tech Entrepreneur Programme (MTEP) has been very encouraging for the fintech community.

Sui-Jon Ho, Senior Market Analyst at IDC Financial Insights, says, “Malaysian banks are making great headway in monetizing fintech solutions, as lines-of-business become more empowered to make strategic technological decisions. The expedited innovation cycle

s resulting from this has had the market aligning itself very quickly to ‘choice technologies’ such as biometrics and robotic process automation, and we can likely expect definitive best practices to emerge soon”.

This Fintech 101 list is published in continuation of IDC Financial Insights’ 2017 fintech report series, which helps investment groups, financial services institutions, and technology players in understanding the fintech landscape and identify potential fintech players for investment and collaboration.

For this research, IDC’s definition intentionally excludes licensed banks and other licensed financial institutions that are using new technologies to radically change financial services, even to the point of launching their own fintech companies and brands. The idea is to look at the FinTech players outside of traditional services.

The Next Level of Openness in Financial Services

 To add credence to the insights presented by IDC, it also invited industry players from CIMB Group, Alliance Bank, Maybank, Entrust Datacard, HP Inc. and Kony to present real-life case studies, experiences of cross-industry collaborations and share their views on what innovation means to the customers.

After all, IDC Financial Insights believes that more than ever, the industry is ready to explore alternative ecosystems of value-collaboration. Financial institutions now need to ensure their platform is “partner-friendly” so that they allow like-minded enterprises, vendors and start-ups to add more value to core financial services.

The open platform environment brings a new level of customer experience, operational efficiencies and business opportunities and the oft-quoted “Know Your Customer” (KYC) was bandied about with more urgency than ever by every one of the speakers in their presentations.

 

Quotable quotes…..

“Customers are expecting their providers to have a deeper understanding of their needs and fulfilling those demands faster than your competition.”

• IDC Financial Insights –

“Tomorrow’s digital banks will focus on processes that serve customer requirements of speed and efficiency, not the requirements of the institution.”

• IDC Financial Insights –

“In the future, if a business is not mobile-first and digital to the core, if it does not present on an app or an icon on a customer’s handset, then effectively it will simply not exist.”

• Andrew Penn, CEO Telstra Corporation –

“Data is everywhere. In fact, the amount of digital data that exists is growing at a rapid rate – in fact, more than 2.7 zettabytes of data exist in today’s digital universe, and that is projected to grow to 180 zettabytes in 2025.”

• simplilearn.com –

“Content-as-a-Service…. Reinventing the branch: As customers become more digital and omni-channel, the branch channel has to create its own proposition to customers, supported by the highest levels of productivity and efficiency yet. ”

• Joe Wagle, HP Inc’s Director of Security & Industry Consulting –