As Malaysia’s fintech ecosystem continues to evolve, 2024 is shaping up to be a transformative year for the industry. From the launch of new digital banks to billion-dollar investments in data infrastructure, these are the key developments driving the narrative in the country.
NTT DATA Expands ASEAN Presence with Majority Stake in GHL Systems
In July 2024, NTT DATA, a Japanese multinational IT and consulting firm, increased its shareholding in GHL Systems to 98.8%.
The acquisition began with a deal worth RM724.08 million for 58.7% of GHL’s shares, purchased from major shareholders like Actis Stark, APIS Growth 14 Ltd, Loh Wee Hian, and Tobikiri Capital. The acquisition offer was valued at RM1.08 per share.
This move aligned with NTT DATA’s strategy to expand its presence in the ASEAN region. GHL Systems, with its extensive network of over 480,000 payment terminals across Malaysia, the Philippines, and Thailand, provides a strong foundation to enhance cashless payment solutions.
NTT DATA plans to integrate GHL’s capabilities with its existing payment services to drive the growth of a cashless society in the region. NTT DATA also aims to combine GHL’s infrastructure with its expertise in payment platforms like CAFIS and its operations in Asian markets, including Payoo in Vietnam and iPay88 in Malaysia.
By strengthening omnichannel payment services, NTT DATA seeks to enhance in-store and e-commerce payment solutions, providing consumers with more secure and convenient cashless options.
BNM’s National Fraud Portal Speeds Up Fraud Prevention Efforts
Bank Negara Malaysia’s (BNM) National Fraud Portal (NFP) can now trace stolen funds in just 30 minutes. This is a 75% reduction in processing time, according to Deputy Finance Minister Lim Hui Ying.
Since its launch in April 2024, the portal has led to a 28% increase in the freezing of illicit funds, making it a vital tool in combating financial fraud.
Developed in partnership with PayNet, the NFP enables financial institutions and the National Scam Response Centre (NSRC) to quickly detect, trace, and freeze suspicious transactions. Enhanced automation and real-time data sharing have also improved the detection of mule accounts by 14%.
The recent inclusion of TNG eWallet has further strengthened the platform’s fraud prevention capabilities.
In the Dewan Rakyat, Lim revealed that BNM and financial institutions blocked RM383 million in unauthorised transactions in 2023. She noted a decline in phishing and malware fraud cases reported to the NSRC, attributing this to the success of ongoing financial security measures.
Lim urged victims of financial fraud to act swiftly by contacting the NSRC hotline at 997. Quick action, she emphasised, allows financial institutions to respond effectively and minimise further losses.
The NFP remains central to Malaysia’s fight against the growing threat of financial fraud.
BNM’s Comprehensive Framework to Revolutionise Malaysia’s Insurance Sector with DITOs
Bank Negara Malaysia (BNM) has introduced a comprehensive framework for Digital Insurers and Takaful Operators (DITOs) to transform Malaysia’s insurance sector. This digital-first approach aims to address protection gaps, foster innovation, and enhance financial inclusion.
DITOs will leverage technology to offer personalised products, streamline claims, and provide real-time risk assessment.
The DITO framework focuses on three core objectives: inclusion, enhanced competition, and better efficiency. By using digital platforms, DITOs will provide affordable coverage, especially targeting underserved groups like SMEs and gig workers.
This shift will encourage innovative product designs, lower premiums, and improve customer service while reducing traditional distribution costs.
The framework also includes regulatory safeguards such as a phased operational model, financial stability requirements, and a robust exit plan. DITOs will be required to meet minimum capital thresholds and demonstrate long-term viability.
During the foundational phase, BNM will closely monitor their performance to ensure they meet their objectives and contribute positively to the sector.
While the initial response to the framework has been cautious, the potential for market disruption remains significant. The licensing application period will open from January 2025 to December 2026, giving applicants time to prepare.
This initiative promises to reshape Malaysia’s insurance landscape, with DITOs playing a key role in bridging protection gaps and contributing to the country’s digital economy.
Malaysia Attracts Over US$10 Billion in Data Centre Investments
Our next top Malaysia fintech story covers Malaysia is becoming a key destination for major tech investments, as four global giants—Amazon Web Services (AWS), Google, Equinix, and Microsoft—unveil significant data centre expansions in the country.
For starters, Amazon Web Services (AWS) has launched its AWS Asia Pacific (Malaysia) Region, strengthening its presence in Southeast Asia. This new region enables local developers, businesses, and government organisations to run applications and store data with reduced latency.
AWS plans to invest over US$6.2 billion (RM 29.2 billion) in Malaysia through 2038, contributing an estimated US$12.1 billion (RM 57.3 billion) to the country’s GDP.
The investment will create more than 3,500 full-time jobs annually in sectors like construction, engineering, and telecommunications. This launch is part of AWS’s broader expansion strategy, bringing the total number of AWS Availability Zones worldwide to 108, across 34 geographic regions.
Google has also committed a US$2 billion investment in Malaysia, which includes establishing the country’s first Google data centre and a new Google Cloud region. This follows similar investments by Microsoft and Amazon Web Services, underscoring the growing demand for cloud services and AI capabilities in the region.
The investment is expected to contribute over US$3.2 billion to Malaysia’s GDP and create 26,500 jobs by 2030.The new data centre will support Google’s digital services like Search, Maps, and Workspace, while enhancing AI access for users in Malaysia.
The Google Cloud region will provide local businesses, public sector organisations, and startups with low-latency services, bolstering security and compliance standards. This addition complements existing Google Cloud infrastructure in Cyberjaya and Kuala Lumpur, linking Malaysia to Google’s global network.
Next, Equinix has invested RM23 million (approximately US$5 million) to acquire land in Cyberjaya, expanding its data center capacity in Malaysia. This expansion follows the establishment of its International Business Exchange (IBX) data centres in Kuala Lumpur (KL1) and Johor (JH1).
Yet another noteworthy development is from Microsoft, which announced a US$2.2 billion investment in Malaysia to enhance the country’s digital and AI infrastructure over the next four years.
This investment includes building cloud and AI facilities, training 200,000 Malaysians in AI, and collaborating with the government to establish a national AI Centre of Excellence and strengthen cybersecurity. Microsoft’s efforts, building on the “Bersama Malaysia” initiative, align with projections that AI could add nearly US$1 trillion to Southeast Asia’s GDP by 2030, with Malaysia set to capture a significant portion of that growth.
AEON, Boost, and GXS Lead the Digital Banking Momentum
In 2024, Malaysia’s digital banking landscape expanded with the launch of AEON Bank, Boost Bank, and GXS Bank, each introducing unique services to cater to diverse consumer needs.
AEON Bank, Malaysia’s first Islamic digital bank, operates entirely online without physical branches. It offers Shariah-compliant financial products, including savings accounts and debit card-i options.
Next, Boost Bank, a collaboration between Axiata Group’s fintech firm Boost and RHB Banking Group, officially launched its digital banking app in June 2024. The platform allows users to open accounts with a minimum deposit of RM1, offering features like Special Jars for savings and seamless payments via the Boost app.
Notably, GXS Bank, established as Malaysia’s first fully digital bank, focuses on delivering a seamless and user-friendly banking experience. Operating without physical branches as well, it offers services such as savings accounts and soon credit lines, all accessible through its digital platform.
These models cater to the growing demand for convenient and efficient banking solutions in the digital age. Notably, two digital banks have yet to launch: the YTL-Sea consortium and the KAF consortium.
Malaysia’s Fintech Stage is Set for Rapid Growth in 2025
2024 has been a pivotal year for Malaysia’s fintech sector, with major investments in data infrastructure by AWS, Google, and Microsoft further reinforce Malaysia’s position as a regional fintech hub. These expansions promise economic growth and thousands of new jobs, while enhancing the country’s digital and AI capabilities.
Digital banks like AEON, Boost, and GXS are also leading the charge. These banks cater to the growing demand for digital-first financial services, offering everything from Islamic banking to seamless payments, driving greater financial inclusion.
As digital banking and infrastructure continue to evolve, Malaysia’s fintech ecosystem is set for rapid growth, positioning the country as a key player in Southeast Asia’s digital economy.
Featured image credit: Edited from Freepik
