Amanda Siddharta
Research expert covering Malaysia
Fintech in Malaysia - statistics & facts
The world has entered an era where payments can be made with a tap of an app, and wealth can be managed by artificial intelligence, and Malaysia followed suit. Financial technology or fintech has made financial services more convenient and accessible for consumers. Based on a 2023 survey, 71 percent of Malaysians were aware of fintech, making the Southeast Asian country a budding market for digital financial services. Within the same year, the fintech market in Malaysia was estimated to generate around 365 million U.S. dollars in revenue from digital investment and digital assets.
The Malaysian stock exchange, Bursa Malaysia, dismissed the inclusion of cryptocurrency on its multi-asset exchange in March 2024, citing its lack of intrinsic value as the main reason. This further hinders the adoption of cryptocurrency in Malaysia, which had an estimated cryptocurrency market value of more than 250 million U.S. dollars in 2023.
Despite the slow growth of cryptocurrency, the fintech market in Malaysia will continue to make steady progress, owing to the strong potential of Islamic fintech and prevalent adoption of digital payments.
Increased use of e-payments
Malaysian consumers are gearing toward a non-cash economy. A 2022 study showed that 77 percent of respondents in Malaysia had seen an increased use of e-payment methods in the prior 12 months. The rise of digital payment was also amplified by the two-year COVID-19 pandemic, when Malaysians and the rest of the world had to rely more on online commerce during the lockdown. Malaysia is the second leading country in Southeast Asia in terms of the penetration rate of digital payments, after Singapore. Malaysians integrated more of e-wallets, credit cards, or QR code payments in their daily lives, from paying the tolls booths to ordering goods on e-commerce platforms. With pervasive use of these cashless methods, the gross transaction value of digital payments in the country reached around 165 billion U.S. dollars in 2023.Slow adoption of cryptocurrency
Digital assets like cryptocurrency have been in the spotlight of the global fintech rise. Nevertheless, in Malaysia, cryptocurrency is not recognized as a payment instrument by the Malaysian Central Bank (Bank Negara Malaysia), although it is a legal form of securities and regulated by the Securities Commission, which means trading cryptocurrency is allowed. Around 30 percent of Malaysian respondents in a 2023 survey stated that they owned cryptocurrencies.The Malaysian stock exchange, Bursa Malaysia, dismissed the inclusion of cryptocurrency on its multi-asset exchange in March 2024, citing its lack of intrinsic value as the main reason. This further hinders the adoption of cryptocurrency in Malaysia, which had an estimated cryptocurrency market value of more than 250 million U.S. dollars in 2023.
Islamic fintech potential
As one of the countries with the largest share of Muslim population, Islamic fintech holds a vast potential in Malaysia. There is an increasing demand from Muslim consumers for Sharia-compliant digital financial services. In the financial year 2023, the market size of Islamic fintech in Malaysia, which includes transaction volumes and assets under management, was projected to reach more than 11 billion U.S. dollars. The current Malaysian Prime Minister, Anwar Ibrahim, promised a 100 million Malaysian ringgit grant in May 2024 to boost innovation in Islamic finance.Despite the slow growth of cryptocurrency, the fintech market in Malaysia will continue to make steady progress, owing to the strong potential of Islamic fintech and prevalent adoption of digital payments.
