Malaysia is laying the groundwork for a major shift in finance as Bank Negara Malaysia rolls out Open Finance to give consumers greater control over how their data moves between banks and third parties.

The initiative is advancing as a strategic enabler for secure, inclusive, and innovation-driven financial services under the country’s broader digitalisation agenda.

Open Finance allows consumers to decide what financial information they share, for what purpose, with whom and for how long.

The platform being developed by Payments Network Malaysia (PayNet) will enable encrypted, consent-based data flows between financial institutions and third-party providers without storing or viewing customer information.

“We’re enabling a system, powering the middle layer which is the transportation of information safely and securely from point A to point B,”

said Farhan Ahmad, Group CEO of PayNet.

Bank Negara Malaysia is guiding the rollout through a phased, whole-of-system approach.

An exposure draft expected in the second half of 2025 will set participation criteria, mandated datasets, and expectations for consent management and customer protection.

“Bank Negara will provide regulatory clarity in terms of the scope and how the industry will then navigate the journey going forward,”

said Assistant Governor Suhaimi Ali.

Technical development is being led by PayNet with support from seven banks and the Employees Provident Fund (EPF), with implementation targeted as early as mid-2026.

The shift to Open Finance aims to end outdated practices such as emailing PDFs or sending couriers with physical documents.

Instead, consumers will be able to instruct their bank to transmit data directly to another institution, improving security, traceability and convenience.

Industry leaders have highlighted Open Finance’s potential to improve inclusion by enabling access to alternative data such as transaction history.

This could support better credit models for underserved groups including gig workers and micro-entrepreneurs.

“One of the key beneficiaries of Open Finance is the underserved segment. Data about them gets richer. Perhaps a bank can build a better model in terms of providing credit or financing for this segment,” said Dato’ Sri Khairussaleh Ramli, President and Group CEO of Malayan Banking Berhad.

They also point to its ability to strengthen consumer trust through clearer consent frameworks, stronger data safeguards and compliance with privacy laws including the Personal Data Protection Act, the Financial Services Act, the Islamic Financial Services Act and the Development Financial Institutions Act.

Farhan added, “Open Finance really unlocks an enormous amount of value going forward and mitigates the risk of data sharing.”

Featured image: Edited by Fintech News Malaysia, based on image by Who is Danny via Freepik