The Securities Commission Malaysia (SC) and Indonesia’s Financial Services Authority, or Otoritas Jasa Keuangan (OJK), have signed an agreement to establish a collaborative framework for a fintech ecosystem in both countries, whose markets have also been active in driving Islamic fintech development.
The agreement will facilitate knowledge-sharing in fintech trends and regulatory developments, as well as joint project opportunities for fintech businesses seeking to operate in both jurisdictions.
“Through greater collaboration, both Malaysia and Indonesia can develop and scale up our fintech industries in support of the ASEAN economic community,” said Syed Zaid Albar, the chairman of the SC.
This bodes well for the Shariah fintech sector as well, which has been a key focus of development for both Malaysia and Indonesia. Malaysia in particular has, in the past five years, introduced various fintech initiatives and frameworks to regulate equity crowdfunding, digital investment management, peer-to-peer financing and the online distribution of capital market products, all of which accommodate Islamic transactions.
Meanwhile, Indonesia has also established initiatives to help Shariah fintech advance, notably LinkAja Syariah, the country’s first Shariah compliant e-money platform that has partnered with state-owned Shariah banks and other Islamic financial institutions. Islamic fintech is also seen as an important component in the OJK’s financial inclusion plans.
“(The) OJK will strive for the Shariah financial services industry to collaborate with fintech to expand business coverage, to increase the number of consumers and increase efficiency in carrying out business activities,” the regulator said.
The fintech partnership agreement between Malaysia and Indonesia was signed by the regulators on the same occasion that the OJK’s Roadmap for Digital Financial Innovation Roadmap and Action Plan 2020–24 was launched.