Is the Malaysian market ready for Islamic fintech?

On whether the Malaysian market is ready for Islamic fintech, Mohd Azmi shared in a separate session with the media that education and awareness among consumers is important in this case.

“You see the thing is, you must educate people about fintech. Education and awareness. A lot of people do not know of the availability of this fintech,” he observed.

“The point is, these fintech applications has a lot of potential to bring people into the financial sector in Malaysia. To be able to even send money to your friends, send money to relatives, receive money, make payments, but in a syariah-compliant manner.”

The distance of individuals from physical branches will also likely play a role in the higher adoption of Islamic fintech in the Malaysian market.

Mohd Azmi noted that in Malaysia, people still have problems of accessing banks, especially for those who reside far from the city or town.

“If you are far away from the city or from town, it’s difficult for you to access banks because you have to think of the transporation (needed) to go to the bank. It’s not convenient because banks only open certain hours,” he said.

He also pointed out that another factor is the millenials, people between the ages of 15 to 30, and who are mobile phone or smartphone savvy.

“Having this gadget or facility enables people to go into banking. Just imagine, you can learn about Islamic finance through phone rather than attending a class.

“There are a lot of advantages. I see the role of fintech, or Islamic fintech, will be to expand the accessibility of Islamic finance in Malaysia.”

However, Mohd Azmi acknowledged that for banks, the challenge they are facing now is that their businesses are getting smaller.

“Why do you want to put money in a bank where if you can put in a fintech nowadays and get a better return? Because fintech links you with a project or an investment.

“So, this opportunity allows people to put money directly into investment and you know that this investment is investment in the real economy. You are really manufacturing things to help the country to grow. “Thus, by putting this, fintech helps you to develop the real economy.” In addition, from a regulator’s point of view, Mohd Azmi pointed out that it makes our financial system more stable. “Because people are able to create jobs and then you channel the money to the right resources,” he said. As such, he opined that in future, the banks’ role, in certain sectors, will eventually be smaller, especially with payment, deposit and financing. At which point, banks will then have to venture into other areas.

You see the thing is, you must educate people about fintech. Education and awareness. A lot of people do not know of the availability of this fintech. The point is, these fintech applications has a lot of potential to bring people into the financial sector in Malaysia. To be able to even send money to your friends, send money to relatives, receive money, make payments, but in a syariah-compliant manner. Dato’ Dr Mohd Azmi Omar, INCEIF president and CEO