Is Malaysia the Next Innovation Hotbed for Fintech?

When we talk about Fintech, we often focus on upstart companies in the United States or Europe. However, according to the World Bank, the fintech investments in Southeast Asia have grown 700 percent since 2015. This is not only digital banks, but the overall ecosystem.

And there is clearly room and appetite for more growth, with one study showing digital payments set to cross the $1 trillion mark by 2025. What’s more, only about 25 percent of adults in the region are “fully banked” with only about 200 million people having a bank account.

It’s an exciting time to be in the Fintech industry in Southeast Asia, and we were particularly thrilled to hear about it from someone with firsthand experience on this week’s Fintech Growth Talk. Karen Puah is a real trailblazer as the first female President of the Fintech Association of Malaysia, a key enabler and national platform for Malaysia’s Fintech ecosystem.

According to Puah, there are three characteristics that describe successful Fintech startups in the region: Startups must be innovative in their approach, founders must be responsible individuals, and business models must be sustainable. When these three characteristics come together, startups can start earning the trust of potential and existing customers. But that’s not always a given; trust needs to be consistently earned a regular basis. And that’s not always easy, as Fintech startups are not necessarily as trusted as some traditional banks with well-established reputations.

This makes launching a Fintech in Malaysia potentially more complicated than in other markets or regions. Puah recommends Fintechs look at four quadrants to have aligned before fully launching. These are:

  • Branding: Hire expert freelancers to help develop a solid brand.
  • Risk Management: A key aspect to Fintechs, ensuring your firm is in good standing with both regulators and customers can help secure investment funding later on.
  • Distribution: Map out your universe; you need to know how you fit into the marketplace to know where you need to take the business.
  • Marketing: Promote digital services both online and using other means, like outdoor advertising.

Of course, having these four aspects planned for can still make it challenging to raise funds for a Fintech, particularly for female founders. Like Fintechs in other countries, female founders face a higher level of scrutiny and sexism from investors that most male counterparts don’t experience. To get around these hurdles, female founders need to remain flexible and agile, and sometimes even bring in a male partner to diffuse skepticism.

That’s one reason why Puah got involved as the Malaysian ambassador for She Loves Tech, the world’s largest startup competition for women. Founded six years ago, She Loves Tech today operates in over 40 countries and has brought together more than 5,000 startups, giving women in tech a voice they did not have previously.

Clearly the future of the Fintech and larger tech industry in Malaysia is primed for growth, in large part thanks to Puah’s tireless efforts. It will be exciting to see where the market goes and how it matures in upcoming years.

About Karen Puah

Karen S. Puah is the President of the Fintech Association of Malaysia. An active advocate for women’s involvement in entrepreneurship and technology, she is also the Ambassador and Head of Malaysia for She Loves Tech, the world’s largest startup competition and accelerator program for women-led and women-impact tech startups.

Puah co-founded CS Tech Solutions, which focuses on digital transformation for corporations, small and mid-sized enterprises (SMEs), and seed investment on startups. She has an active presence in the Malaysia startup community and is a mentor for several accelerators and universities.

She has an MBA in Entrepreneurship from Asia eUniversity and Diploma in Islamic Finance from Chartered Institute of Management Accountants, London.

Follow Karen on Twitter or LinkedIn. 

Listen to our full interview with Karen here.