Labuan sees slight decline in fintech
The number of financial technology (fintech) companies operating in the Labuan International Business and Financial Centre (IBFC) has been slightly declining.
From 2017 up to August 2023, five fintech companies involved in payment systems, security licensing and credit token operations have surrendered their licenses to the Labuan IBFC’s regulatory body, the Labuan Financial Services Authority (Labuan FSA).
Labuan FSA told Bernama that two of the key reasons driving the companies’ decision to cease their operations are the intensely competitive market environment and the inherent volatility associated with cryptocurrencies.
In response to these challenges, the agency under the Ministry of Finance said it has taken proactive steps to address new and emerging risks, particularly in the digital era.
This includes a comprehensive approach to managing risks such as cyber threats, digital asset vulnerabilities, data protection concerns and technology-related risks.
Additionally, Labuan FSA is dedicated to crafting guidelines that safeguard the integrity and conduct of digital businesses, reinforce digital governance, fortify cyber risk management, and ensure compliance with Anti-Money Laundering/ Counter-Financing of Terrorism regulations.
As Labuan IBFC continues to evolve, it remains committed
to supporting and nurturing fintech innovation while addressing the multifaceted challenges that come with the ever-changing financial technology landscape.
It remains committed to fostering innovation, adaptability and support within the fintech sector, positioning itself at the forefront of technological advancements. There are currently 111 fintech companies operating in Labuan IBFC, engaged in various financial sectors, including investment banking, commercial banking, insurance, capital markets (including fund management and securities licensing), money brokering, payment systems, credit token services, exchange operations, and securities issuance.