Fintech Job Talent for the Banking & Financial Services Sector are High in Demand in Malaysia
Study Financial Technology (Fintech) in Malaysia
Banking and Financial Services Malaysia: Investment, Financial Technology (Fintech) and Digital Banking Drive Strong Hiring Demand
In 2024, Malaysia is set to see significant growth in its fintech industry. This is primarily due to increased digital adoption in the country, supported by government regulations, substantial funding, and a growing talent pool. These factors are vital contributors to the increase in demand for qualified Fintech professionals in Malaysia.
The Malaysia Fintech Market size in terms of transaction value is expected to grow from USD 46.63 billion in 2024 to USD 96.09 billion by 2029, at a CAGR of 15.56% during the forecast period (2024-2029). The fintech landscape in Malaysia is evolving dynamically, marked by the innovation of local startups and global players introducing new business models, products, and services. Various segments within fintech, such as digital banking, Islamic fintech, insurtech, wealthtech, and payments, are experiencing rapid development.
The adoption of fintech solutions among Malaysian consumers and businesses is also rising. Additionally, the pandemic has played a role in accelerating the digitisation of financial services.
To keep pace with growing demands, financial institutions have been ramping up their efforts to partner with local Fintech companies and enhance the former’s capabilities in know-your-customer (KYC) processes, anti-money laundering and digital identity management, which encompasses facial and voice recognition. The collaborations would ultimately result in enhanced blockchain-enabled remittance services, online loan processes, digital wallets and wealth management.
As a result, both banks and Fintech firms have been on the lookout, in the talent-starved market. Due to changes brought on by digitalisation of the banking industry, there is a strong demand for risk, audit, and compliance professionals with exposure to analytics as banks sought to transform and enhance functions. Skilled candidates in back-office roles such as operations and digital product specialists were also sought after to support the growth. Qualifications-wise, while the working experience of candidates is of utmost importance, degree and professional certifications are also useful for candidates to highlight their knowledge on subject matters.
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Strong Demand for Candidates who Possess Fintech Knowledge and Skills
Due to changes brought on by digitalisation of the banking industry, there is a strong demand for risk, audit, and compliance professionals with exposure to analytics as banks sought to transform and enhance functions. Skilled candidates in back-office roles such as operations and digital product specialists were also sought after to support the growth.
Companies will be looking out for candidates with financial modelling experience to fill roles in investment banking and private equity, ranging from junior analysts and mid-management positions in both front and back-office roles.
Candidates with experience in partnerships, sales, digital marketing, and social media marketing will continue to be in demand for fintech products. There will also be companies on the lookout for professionals with specialist skillsets in blockchain, cryptocurrencies, and NFTs.
On the back of the successful approval of five digital bank licenses in 2022 by Bank Negara, specialists in digital products and operations will remain highly sought after to be part of the pioneer teams key to setting up processes and systems before going live.
Risk, audit, and compliance professionals with strong analytical and business partnering skills will remain in high demand in the sector. As transformation projects continue, those with project management experience will command high interest. Furthermore, there will be continued demand for candidates with niche skillsets in credit risk modelling, ICAAP, stress testing, and ESG, as they are a scarce resource in the country.
Qualifications-wise, while the working experience of candidates is of utmost importance, degree and professional certifications are also useful for candidates to highlight their knowledge on subject matters.
Why you Should Pursue a Career in Fintech in Malaysia?
Bryan & Wen Kai, Fintech at Asia Pacific University (APU)
In Malaysia, fintech has made strides in areas such as peer-to-peer (P2P) lending. Platforms like Fundaztic and Funding Societies connect individuals who need funding with willing lenders, providing a hassle-free borrowing experience. This innovative approach bypasses traditional banks’ lengthy processes and strict requirements, allowing Malaysians to access financing more easily.
Another significant fintech development in Malaysia is the emergence of robo-advisors. Platforms like StashAway and MyTheo utilise sophisticated algorithms to offer automated investment advice tailored to your financial goals and risk tolerance. By leveraging technology, these robo-advisors make investing accessible to a broader audience, including individuals who may not have considered traditional investment avenues.
Blockchain technology has transformed various industries, including finance. Cryptocurrencies like Bitcoin and Ethereum, built on blockchain platforms, facilitate peer-to-peer transactions without the need for intermediaries. Smart contracts, powered by blockchain, automate and ensure trust in agreements. Understanding the fundamentals of blockchain technology and its implications for finance is crucial for your exploration of opportunities in cryptocurrency, decentralised finance (DeFi), and blockchain-based financial applications.
This means that individuals who possess the appropriate skill sets could open themselves up to a wealth of opportunities. With new ventures and startups competing against established brands, it’s a dynamic and exciting world to be part of.
In fact, many of the roles now available in fintech simply didn’t exist a decade ago, such has been the scale of growth in the sector. As a disruptive industry, working in fintech provides the opportunity to help drive products and services that can have a real and significant impact on people’s lives. For a lot of people, being part of an industry that drives innovation and that is directly involved in shaping the future is an attractive proposition.
And while fintech is a highly competitive industry, both in terms of companies competing for market share as well as professionals competing for the top jobs, there is plenty of room for those working in the sector to make upward or lateral moves as there are new opportunities for the right people becoming available all the time.
The sector can also be extremely financially rewarding. As new solutions are introduced to the market, firms are usually prepared to pay for the talent they need to drive success. The variety of niche sectors is also ideal in terms of developing an impressive portfolio of experience over time, which is certainly helpful for anyone planning their exit strategy.
Students who enjoy challenges and who are keen to remain one step ahead of the competition should therefore be quite interested in what career opportunities in fintech have to offer.
What does a career in fintech entail?
Fintech is a diverse sector, and a characteristic of the entire fintech industry is the sheer number of roles that are available. As businesses continue to migrate into the digital ecosystem, those with the necessary skills and qualifications can enjoy a range of opportunities within various sectors including:
- Digital banking
- Mobile payment gateways
- POS (point-of-sale) system development
- Cryptocurrencies
- Personal finance
- B2B and B2C transactions
- Investing
As you might have already imagined, fintech professionals are heavily based within the domain of digital technology. For anyone with a finance background looking to start their career, such as a recent graduate, fintech could be an attractive option alongside more traditional career paths such as investment banking or consulting.
While fintech involves itself with harnessing the latest technology and providing new solutions, many of the same skills are needed in financial roles as you’d find in existing sectors. This is in part because fintech involves delivering solutions to meet existing commercial requirements. Solid numerical, analytical and communication abilities are just as important here as they are in more traditional sectors, if not more so.
A lot of entry level roles in particular may therefore involve being responsible for similar tasks as you’d expect to find when working in other branches of finance.
Working in Fintech
A day in the life of an analyst in fintech may involve:
- Researching the latest quantitative models and data sets.
- Observing and interpreting market trends.
- Working in synergy with colleagues like wealth managers, coding specialists and even computer engineers.
- Beta testing new algorithms and software packages.
- Providing real-time recommendations to stakeholders, department heads and clients.
It is still important to note that the exact roles and responsibilities will vary in accordance with the job title itself.
Bank Negara Releases the Licenses for Digital Banking
The year 2022 marked a pivotal moment in Malaysia’s financial history by issuing five digital banking licenses. This regulatory move opened the door for innovative digital-only banks, intensifying competition in the banking sector.
Boost Bank, AEON Bank, and GXBank are among the pioneers that have entered the market, offering digital-centric banking services. GXBank, in particular, has gained substantial traction, amassing over 100,000 customers since its launch.
In 2024, the digital banking landscape will expand further with the launch of two remaining digital banks:
- A consortium led by Sea Limited and YTL Digital Capital Sdn Bhd.
- A consortium led by KAF Investment Bank Sdn. Bhd.
These digital banks will advance financial inclusion and provide users with more convenient and personalised banking services, further intensifying market competition.
The launch of these banks is anticipated to shape the fintech trends in Malaysia for the years to come.
Embracing digital innovation in insurance through DITO
The Malaysian life insurance industry is growing, with a projected compound annual growth rate (CAGR) of 5.2 percent from RM57.5 billion in 2023 to RM70.3 billion in 2027 in gross written premiums (GWP).
The rise of insurtech has played a significant role in this expansion. The online distribution channels for insurance sales have witnessed remarkable growth, boasting a 32.6 percent year-on-year increase.
One significant development in 2024 is the Digital Insurance and Takaful Operator (DITO) licenses.
These licenses represent a pivotal opportunity for Malaysia to address underinsurance, which affects 30 million Malaysians and over 85 percent of small and medium-sized businesses.
Bank Negara Malaysia (BNM) plans to issue up to five DITO licenses to players who serve the underserved and unserved markets. The issuance of these licenses is expected to stimulate innovation and expansion across the insurance value chain.
The DITO framework will revolutionise Malaysia’s insurance and takaful sector. It’s designed to foster competition, enhance financial inclusion for vulnerable groups, and drive innovation and digitalisation.
Similarly, the licensing framework for digital banks by BNM is reshaping the banking and fintech landscape. It outlines licensing and regulatory requirements for digital banks, aiming to spur competition, improve financial access for underserved segments like the bottom 40 percent of income earners, micro and small businesses, and gig workers, and promote digital innovation.
DITO and digibank frameworks signify a significant shift towards digitalisation in Malaysia’s financial services, creating new opportunities, enhancing customer experiences through accessible and personalised services, and encouraging a more inclusive financial environment.
Startups, especially those operating within the BNM sandbox program, will be incentivised to pursue full licenses, injecting creativity and innovation into a previously conservative market.
The insurtech sector will experience an increase in funding, mirroring trends observed in other areas of fintech. This surge is exemplified by companies like BigPay and Boost, which have successfully attracted significant investment due to their innovative approaches.
For obtaining DITO licenses in Malaysia, applicants are required to maintain a minimum capital of RM40 million during the initial operational phase, typically lasting two to three years.
After this phase, these entities must adhere to the regulatory requirements applicable to traditional licensed insurers and takaful operators, which includes a minimum paid-up capital of RM100 million for each license.
Consequently, there are specific capital requirements for obtaining these licenses. Startups aiming to acquire DITO licenses must secure adequate funding. The growing investor interest in these startups likely stems from their optimism about the potential and opportunities in Malaysia’s insurance sector.
Fueling fintech innovation and startup growth
Venture capital plays a pivotal role in fostering innovation and supporting the growth of startups in the fintech ecosystem.
In Malaysia, 2024 promises to be a vibrant year for venture capital, driven by initiatives like Penjana and the National Economic Recovery Plan. Penjana, a Malaysian government initiative, is set to boost innovation and digitalisation, particularly in venture capital.
The government has allocated RM1.2 billion to this sector, with a matching amount from the private sector. Penjana Kapital, a government entity, manages these funds, targeting key areas like fintech, agritech, edutech, and healthtech.
How to Pursue a Career in Fintech within the Banking & Financial Services Sector?
Students should look for a course that possess subjects related to Fintech within a Banking and Finance degree programme. The Financial Technology (Fintech) degree course will give students a mix of theory and practical skills and experience in order to support the growth of this vital sector in Malaysia’s economy. Now more than ever businesses need employees with the knowledge and skills to advise on how they can grow within the financial services sector.
When it comes to traditional degrees, some private universities are offering degrees with a focus on fintech as the field grows. These programs allow students to learn the specifics of a traditional finance major while developing the technical skills that may be potentially valuable in fintech. The degree programme at a private university in Malaysia will take 3 years to complete. Prepare yourself for a future where finance and technology converge by choosing the best private university for your degree studies
Do I need to know Coding or Programming to work in Fintech?
You don’t really need to learn software programming to work in Fintech within the Banking and Financial Services sector. Learning Python software in the curriculum is enough for students to enter fintech, because it is easy to write and deploy and very user friendly.
You will understand the architecture; like how the algorithm works to give a solution. For example, within Banking and Financial services it is the application of Ai in financial decision making; application of machine learning that will produce a predictive analysis to assess if your customer that is coming onboard is good or bad customer.
What is the Education Pathway to become a Fintech Professional in Malaysia?
With the advancements in technology, the new generation of secondary school students are well versed in its usage. When it comes to payments and every day expenses, they are familiar with the convenience of e-wallets such as Touch‘n Go, GrabPay or Boost. These digital payment platforms have allowed them to make seamless transactions, pay bills, and even split expenses with friends. They are immersed in the world of Fintech without even realising it.
Fintech has revolutionised how we handle our finances, allowing for a secure and convenient alternative to traditional cash payments and banking. Students who desire to study Banking and Finance should not choose the traditional degree programmes which would not prepare you for a technologically advanced future in Financial Services.
Technology plays an important role in this transformation of finance and commerce. Advancements in artificial intelligence, blockchain, big data analytics, and cloud computing have provided avenues for innovative financial products, services and solutions. In addition, Artificial intelligence-powered chatbots provide personalised customer support, while blockchain technology ensures secure and transparent transactions. Big data analytics enables data-driven insights for risk assessment and fraud detection, and cloud computing facilitates efficient storage and processing of vast amounts of financial data. Therefore, when you study fintech, you will acquire a good grasp of these technologies and how they are applied in the financial world.
By studying fintech at a top private university in Malaysia, you gain a competitive edge in the job market. A degree programme in Fintech will equip you with the technical skills and knowledge while the environment will help develop your critical thinking abilities, and entrepreneurial mindset necessary to succeed in fintech. Upon graduation, you can pursue find work in digital banking, financial consulting, risk management, data analysis, cybersecurity, product development, and entrepreneurship.
