Reimagining Islamic Financing Via Composable And Fintech Solution

Nisa Ismail, CEO of Sedania As Salam Capital Sdn Bhd (Part of SedNisa Ismail, CEO of Sedania As Salam Capital Sdn Bhd (Part of Sedania Innovator Berhad)

Composable fintech is more than just the latest tech buzzword. Cloud-based APIs have slowly mushroomed even in the relatively rigid banking ecosystem, and the results have been promising. It only takes 8 months now to build an online bank from scratch that is secure, tailor-made, and can handle more banking activity than even a physical bank’s biggest branch.

And now composable finance is where we must build the backbone of our future.

Composable finance breaks down all the behind-the-scenes processes into small parts, which are then upgraded using industry 5.0 technology to be mostly automated, self-learning, and highly user-friendly even for the most inexperienced client.

Financial institutions now have the freedom to assemble any fully customised product they would like to launch (almost) immediately, making product creation cheaper and quicker to market.

The appeal of composable banking is obvious in this post-pandemic world. And with an economic recession just around the corner, it is crucial that we play our part in creating a financial ecosystem that is compassionate to the everyday Malaysian’s struggles.

As wallets begin to tighten in the upcoming global recession, finance institutions must rise to the challenge and help as many underserved Malaysians weather through the upcoming storm intact.

This means launching products that are innovative, user-friendly, and answer the pain points of a diverse group of Malaysians of different ages, races, income brackets, and needs. These products need to be launched quickly, but they need to be robust.

Composable finance and Islamic finance can work together in harmony

When it comes to banking that’s grounded, resilient and fair towards all parties involved, Islamic finance has a lot to offer.

Interest and speculation are forbidden in Islamic finance, which translates to financing deals that are more clear cut—everyone knows what money is being transferred from the start, and when.

Despite the economic downturn due to the pandemic, Malaysia’s Islamic finance industry has come out on top two years in a row now on the Islamic Finance Development Indicator (IFDI) 2021. This means that we’re doing something right here to have fared as we did during the pandemic.

But just like conventional banking, Islamic finance must become more agile and innovative in the face of a looming economic recession.

The variety of Islamic finance concepts like ijarah (leasing), mudharabah (profit sharing), musyarakah (partnership) can be a lot to wrap your head around, but in my experience, each is also very clear-cut. What is allowed and not allowed is stated very clearly within Shariah-backed financing— anything that seems confusing can be easily clarified with our own Shariah Advisory Board.

The clarity of the rules we operate in actually allows for a lot of flexibility.

Our champion product, the Straight Through Processing API Platform, exemplifies this point perfectly.

How Sedania Does It

In a conventional mortgage, interest rates are not fixed because it’s based on the base lending rate (BLR) determined by Bank Negara Malaysia (BNM). BLR rates rise and fall, so some consumers don’t actually know how much BLR they’ll have to pay by the end of a typical 30-year mortgage.

The Tawarruq process is one way to create a more compassionate financing ecosystem. For example, in the process of buying and selling a house, the customer would purchase a commodity (like gold) as an underlying asset from the financial institution, which is then sold for cash to a party other than the original seller.

But the paperwork and process for Tawarruq is understandably complicated, so at Sedania we have created the As-Sidq, a digital Tawarruq trading platform, a cloud-based solution that helps to digitise this trading process in an instantaneous, secure, anytime brokerage of digital commodities. We utilize prepaid telecommunication airtime credit as the traded commodity for customers, which offers high liquidity that is perfect for this sort of transaction.

But we can always take things one step further. With next-generation digital banking, we partnered up with our technology partners Mambu and Crealogix. Mambu is the world’s leading SaaS banking platform that empowers tech-forward financial institutions to design and service nearly any type of financial product. While Crealogix on the other hand, is a Swiss FinTech Top 100 company, that aims to create a more conversational environment and can help financial institutions to accelerate the success of their digital initiatives.

Mambu as the core banking provider allows banks and financial institutions to choose which digital solutions they want based on their current business needs and Crealogix as the digital banking hub provides a comprehensive architecture for the open banking of the future – online, mobile, or in direct contact. The hub combines the latest technology in digital banking with modules for proactive customer support. In contrast to other suppliers, this solution is open and allows all systems to be integrated seamlessly. This enables financial institutes to easily integrate innovators and innovations using the API-based architecture and makes them well equipped for the banking requirements thus promoting a better user experience. 

A lack of transparency has caused a surge of mistrust for lending institutions, so Crealogix has also assisted us in enabling timely alerts and notifications to help with client communication and education.

It is not enough to push for Islamic finance just for the sake of it, and it is not enough to just automate existing products either. A combination of Islamic Finance, composable banking, and some innovative drive might just be what we need to unlock a Malaysia that is more resilient against economic ups and downs.

We don’t believe in creating another product that already exists in a saturated market. So we focus our efforts on driving value. As long as we provide a valuable service, the product will push itself really, reaching a much larger audience that is untapped, uninterested and has big potential.

Nisa Ismail, CEO of Sedania As Salam Capital Sdn Bhd

The views expressed are those of the writer and do not necessarily reflect those of Bank Negara Malaysia, the organiser of MyFintech Week 2022.

Calvin Teng, Country Manager of Qoala

Even as the COVID-19 pandemic sent most of us into isolation, it brought risk and insurance to the forefront.

“I should have bought insurance.”

“What is a pandemic exclusion?”

“I need to manage my expenses.”

Stuck in our homes, we went online. A 2021 Zurich survey1 found that now, most Malaysians (43%) are using online portals to renew their motor insurance and takaful.

Going online is a global trend. Even before the pandemic, a 2019 GlobalData survey found that in the UK, 39% of consumers purchased their motor insurance directly with an insurer, and 31% through an insurance aggregator.

Current outbreak situation can be a turning point for all the industry insurance players in tracing back the overall efforts and adapting their product and services to the present situation.  Insurance industry has been adapting well with the unpredicted pandemic over the past 2 years through the emergence of insurtech and insurance aggregators.

However, as the future is always unseen, insurance players must be able to constantly prepare for the adjustment and keep being proactive to build products and systems that are compatible with market situations.

Where we go from here

An often-repeated quote goes—” The future is already here—It’s just not evenly distributed.”

Consumers want to transact online. A 2021 Google, Temasek and Bain & Company survey2 found that 81% of Malaysians have at least made one purchase online, primarily at e-commerce marketplaces and online travel agencies.

For insurance, the transition from offline to online sales happens when our products are no longer sold but bought. Pricing, while important, contributes little—you cannot convince a person to buy something he doesn’t want just because it’s on sale. It’s important to understand the market needs and provide products that meet those needs.

A report stated by EY3 mentioned supporting ecosystems will be essential to help insurers make the shift to proactive, personalized offerings and cross-channel experiences. In some cases that are currently happening, the existing ecosystems could be in the form of insurance aggregators, as well as e-commerce platforms and could be any available platform in the future. Through harnessing the power of the omnichannel platform and digital ecosystem, insurers can be assisted in being more proactive and offering personalized service to their customers. Insurers can focus on building their business and brands. The region’s insurers cannot make the shift to proactive, personalized offerings alone. Through these ecosystems, insurers can focus on their strengths while using external expertise and capability to arrange future insurance offerings and offer complementary services.

Specifically talking, Insurance aggregators benefit from, and are a natural outcome, of our decades of investment in financial literacy. As insurance is a part of financial planning, the right approach would be by giving understanding to the people on how important financial stability and planning is, including building their safety which is followed by insurance as their personal and asset protector.

We’ll take it further. As an example, Qoala, where I work, invests in making insurance products understandable and accessible through our website, is followed by tens of thousands via our social media channels, and reaches millions monthly through our educational articles.

This is how we all win.

Calvin Teng is the Country Manager of Qoala.

The views expressed are those of the writer and do not necessarily reflect those of Bank Negara Malaysia, the organizer of MyFintech Week 2022.

[1] Zurich Malaysia (2021). 59% of Malaysian motorists are still not covered for flood damage.

[2] Google, Temasek and Bain & Company (2021). e-Conomy SEA 2021

[3] EY (2021). How Southeast Asia’s insurers can seize growth in the next decade.

As news of the new COVID-19 variant makes its way through news portals, Malaysians continue to hold their breath in fear of another wave of infections. Among our worried citizens is Pak Hamid (name changed for privacy), who fought many uphill battles trying to keep his small business alive throughout the pandemic.

Pak Hamid is not alone in his struggle. Between Movement Control Order (MCO) 1.0 and MCO 3.0, 12%[1] of Malaysian SMEs have been forced to close. The impact of these closures continues to ripple throughout our country, and we see its effects in the form of our unemployed relatives, the absence of our favourite hawkers despite the reopening of the economy and pleas for donations on social media.

Well-meaning researchers have pointed out that going digital will help hawkers stay afloat, but this is easier said than done. Hawkers such as Pak Hamid continue to struggle with registering their businesses on online platforms, what more having to upload photos of his products, tracking orders as they come in, or having to answer the confusing: “Which e-Wallet do you accept?”.

While Malaysia’s internet connectivity rivals that of first-world economies at 88 per cent[2], 55 per cent of our community remain unbanked and unqualified for conventional financial assistance which could help them survive these difficult times and partake in the ideal future that our Twelfth Malaysia Plan (12MP) envisions.

As we rebuild our nation in a world where COVID-19 has been declared an endemic, we need to ensure that each Malaysian has equal opportunities to achieve financial independence so we can truly prosper together.

This journey begins with financial inclusion which goes beyond granting more people with access to pre-existing financial solutions. In Singapore[3], a software engineer noticed that hawkers were struggling to read online orders. Understanding that these uncles and aunties were more familiar with WhatsApp, he converted the order sheets into order forms which would stay on WhatsApp. Within eight months, this small project has been adopted by more than 230 Singaporean hawkers, sparking meaningful digital transformation for the community, and helping them keep the lights on.

To create meaningful change, as the engineer correctly did, we must include the voices of the communities we serve. Innovation must consider how different segments of society perceive technology and the challenges or complexities those technologies may present to them. Empathy in innovation is simplifying the challenges faced by each segment when building a digital or financial solution that best suits their needs.

In a focus group discussion recently organised by Green Packet, the underserved population surveyed shared that what matters most to them is instant service that allows them to earn an income as swiftly as possible to ensure they have the cash in hand and the financial freedom to look after their businesses, families, and future.

As we move forward, digital financial solution providers must realise that the best solution is often the simplest. Uber explored an SMS-based booking service[4] for clients in rural areas where smartphones are uncommon. Microfinance providers allow businesses to protect themselves at the cost of one iced Milo per day, breaking up monthly costs into manageable daily payments. Traditional electronic Know-Your-Customer (e-KYC) systems in some countries have been replaced with a referral system within business associations to overcome documentation delays in onboarding small-time merchants. During Ramadhan 2020, bazaar hawkers in specific locations (such as the famous Bazaar Ramadhan Kelana Jaya) formed a Facebook page to advertise their goods.

Malaysia’s B40 and underserved communities have worked within the ‘limitations’ that made conventional financial solutions less accessible to them for the past six decades. As a nation, it is time we re-evaluate these ‘limitations’ so that we, as pioneers of a new generation of digital financial solutions, can offer opportunities that address these decades-old challenges and unlock financial inclusivity for everyone within our community.

In tandem with the country’s Shared Prosperity Vision 2030 and the 12MP which commits to make Malaysia a nation that achieves sustainable growth for all, let us re-evaluate what financial inclusivity means to the Pak Hamids of our community and work towards empowering them with the right tools and support so that these individuals and communities can grow with greater resilience and achieve financial freedom to build the life they deserve. Only by financially liberating all our communities, especially the B40s, will we be able to fully invest in the future of our country. And Pak Hamid will not need to shutter his humble source of pride built on years of toil.


Ku Kok Peng heads Green Packet’s Group Strategy Office, which work in close alignment with Green Packet’s five core business units that underpin its growth strategy to be a leading player in Malaysia’s journey towards digital transformation. Green Packet is a leading global technology solutions company listed on Bursa Malaysia.



[3] Hawkers go digital during covid19 circuit breaker, Straits Times,

[4] Uber testing cab bookings through calls and SMS

Ku Kok Peng, Group Chief Strategy Officer, Green Packet Berhad

Saya tak mampu,” or ‘I cannot afford this’ said Laila (name changed to protect privacy) when asked why she has not listed her hardworking stall on delivery platforms.

A few months into the reopening of the economy, it has finally dawned upon us that returning to the ‘old normal’ is impossible. Throughout two years of intermittent lockdowns the digital economy has flourished. News feeds across Malaysia are steadily updated with headlines on cloud computing, artificial intelligence and the mushrooming of self-made apps that are hitting the market – all designed to replicate our pre-pandemic lifestyles through digital mediums.

Yet behind the ‘glamour’ of this new, highly digitised world is the dark side of the digital economy. One where we recognise the people that have been left behind.

Over 45,000 new micro-SMEs were onboarded onto various e-commerce platforms over the year 2020 alone1. Yet for people such as Puan Laila, this option is not for them. Puan Laila has five children to support. Her slim profit margins go towards the next batch of ingredients, which means giving up 30 to 35 per cent of her profits to online platforms would effectively shut her business down and her face-to-face customers have not reached pre-pandemic numbers. Her stall is yet to be registered which also eliminates the possibility of applying for a conventional loan or accessing Government aid for micro-SMEs. 

With an average monthly income of just RM1,200, Puan Laila can no longer keep up with the cost of digitalisation. Be that as it may, financial inclusion would go a long way in giving her the financial freedom she needs to keep the lights on.

Real world solutions to real world problems

The needs of the B40 are painfully simple. According to a recent focus group discussion organised by Green Packet, our underserved market shared that what matters most to them is instant service which allows them to earn an income as swiftly as possible to ensure cash in hand and the financial freedom to look after their businesses, families, and future. In a similar KPMG survey2, 79% of respondents expressed interest in better accessibility to financing products.

For financial solutions providers, the responsibility to navigate what convenience and accessibility means to the digitally underserved falls on our shoulders. Empathy in innovation can only begin with a proper understanding of the challenges or complexities that technology presents to this group. The goal is to create solutions which work for the community instead of vice versa.

In Singapore, a software engineer noticed that hawkers were struggling to read online orders. Understanding that these uncles and aunties were more familiar with WhatsApp, he converted the order sheets into order forms which would stay on WhatsApp.

Within eight months, this small project has been adopted by more than 230 Singaporean hawkers, sparking meaningful digital transformation for the community, and helping them keep the lights on.

This listening process has also facilitated our home-grown technology solutions providers to practice empathy in innovation. Kiple, a wholly-owned subsidiary of Green Packet, has taken extra care to empathise with the needs of the community in creating their solutions.

Recognising that the unbanked populations in Malaysia were unable to access cash grants and government assistance, we turned to white-label prepaid cards to facilitate the distribution of funds to those who need it most. This initiative has helped the Puan Lailas among us receive the funds they need to bolster them through these challenging times.

As we begin the rollout of the Twelfth Malaysia Plan (12MP), we must play our part in executing the Plan’s vision of ensuring economic empowerment and social re-engineering. This includes taking apart pre-conceived notions of what the underserved need and making their experiences a cornerstone of our solutions.

Understanding how the communities use the technology available to them also matters, and often, the solutions that work for the community are often the simplest. Kiple went back to the basic prepaid card to distribute funds, Uber explored an SMS-based booking service for clients in rural areas where smartphones are uncommon. Traditional electronic Know-Your-Customer (e-KYC) systems in some countries have been replaced with a referral system within business associations to overcome documentation delays in onboarding small-time merchants, and Telegram’s channels have been transformed into mini marketplaces.  

It is time we recognise the ‘limitations’ that the underserved communities have had to live with as a reflection of our failure to keep their circumstances in mind. As a nation, it is time we re-evaluate these ‘limitations’ so that we, as pioneers of a new generation of digital financial solutions, can offer opportunities that address these decades-old challenges, and unlock financial inclusivity for everyone within our community.

It is only then that Puan Laila and the rest of the underserved community will be able to grow with greater resilience in our rebuilt nation.     


Ku Kok Peng is Group Chief Strategy Officer, Green Packet Berhad

The views expressed are those of the writer and do not necessarily reflect those of Bank Negara Malaysia, the organiser of MyFintech Week 2022.

This article was first published by The Vibes, ‘Liberating the B40 through Empathy in Innovation’ – 23 September 2021.



Hudhaifa Ahmad, Executive Director of MyAngkasa Digital Services; CEO of MYISCO

Remember those years during the renaissance period where people adopted barter trade as a medium of exchange. The same medium has evolved and improvised over time with the usage of shells, metals and valuable items until the introduction of banknotes that are commonly accepted as the medium that defined a unit of measurement. These banknotes, known as currencies are legally tendered and communicate the price of goods and provide an easier way to preserve individuals wealth in the long term. 

That evolution of money is about to be transformed and reinvented. The advancement of technology, the emergence of the internet, the invention of smartphones and the adoption of block-chain technology has allowed a safer peer-to-peer money transaction that could not be tampered with, and to what will become the future of the new medium of exchange.

Since the outbreak of the Covid-19 pandemic in 2019, there has been a monumental shift in the way people live, communicate and how they do their business. The pandemic has created a new norm that people are now very much concerned over social distances, face-to-face engagement and unnecessary contact that greatly impacted the way trade and businesses were naturally conducted and practised all over the world. Malaysia had even closed its borders and imposed travel restrictions in fighting the outbreak. Movement Control Orders has been exercised and the economy has shrunk to the point that certain clusters of businesses have shut down and are no longer deemed profitable to operate.

During the course of imposed restrictions, Malaysia has seen an astronomical surge in e-commerce activities and the accelerated adoption of internet banking and mobile payment transactions as people turned to e-commerce to fulfil their necessities. According to data from IBM’s US Retail Index, the pandemic has accelerated the shift away from physical stores to digital shopping by roughly five years1. However, the medium of exchange to support the rapid growth of e-commerce activities has further room for improvement.

According to JP Morgan insights, Malaysia’s outstanding e-commerce sales growth, rising basket spend and a dynamic, digitally savvy population makes the country full of opportunity for merchants. However, infrastructure issues persist with outdated payment methods, unreliable delivery and incidences of fraud. Merchants should reassure customers that they have the resources and know-how to avoid these problems2.

Malaysian entrepreneurs that engaged in e-commerce activities are mainly Micro Small And Medium Enterprises (MSME’s). They frequently neglected the importance of engaging a safe and secure payment platform environment, where Cash-on-Delivery and bank transfer has always been the preferred medium of choice. These payment methods are highly risky and easily exposed to fraudulent cases. MSME’s generally choose not to acquire the tools that enable them to offer a safer payment method for their e-commerce transactions as the engagement with banks for payment solutions remain costly and most often complicated. The service charges per transaction are usually expensive as they hardly accumulate enough monthly sales to enjoy favourable merchant discount rates.

A JP Morgan report states that Bank transfers dominate as the primary e-commerce payment method in Malaysia, accounting for 44 per cent of all transactions3. Bank penetration is at 85 percent4. The spike in money transacted via digital processes has cultivated a new normal that will be accepted and tolerated.

Porter Erisman in his Six Billion Shoppers book quoted, the smartphone has done more than putting a shopping mall in every consumer’s pocket: it has also put a retail storefront in every entrepreneur’s pocket.

The Digital Bank can overcome this issue by on boarding all MSMEs and sole proprietors to utilise the latest banking technology to meet the complex demands and various needs of customers. As every individual has a unique and different necessity, a Digital Bank will equip the merchants with the right tools and applications such as online banking payments, contactless payments, and buy now pay later options to help reduce their operational costs and streamline their payment methods into a safe and secure platform.

Forrester found that many customers trust payment firms and technology giants over traditional financial services providers to help them better manage their finances. Global technology giants, digital-only banks, payment providers, and e-commerce players are already threatening established firms by offering simple, convenient, and more personalized digital experiences5.

Digital bank as a valued contributor will be the best avenue to support and accommodate merchants business requirements and extend solutions beyond pure banking services. They are capable to build advanced data analytics to understand complicated consumer behaviour with segmented profiling that will serve Micro SME’s needs more comprehensively. They also can deliver additional auxiliary benefits such as e-commerce extension, cash flow budgeting and accounting system assistance among others that could be the game-changer for financial inclusion in Malaysia.


Hudhaifa Ahmad is Executive Director of MyAngkasa Digital Services; CEO of MYISCO

The views expressed are those of the writer and do not necessarily reflect those of Bank Negara Malaysia, the organiser of MyFintech Week 2022.



[3]  J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020

[4] J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via World Bank, 2018


Nisa Ismail, CEO of Sedania As Salam Capital Sdn Bhd (Part of Sedania Innovator Berhad)

According to Bloomberg, Malaysia’s economy suffered its worst year since the 1998 Asian crisis 2020, which has turned into a full blown economic contraction as of Q3 this year.

Among the areas that took the heaviest hit throughout all of this is the SMEs. In 2020, Malaysian SME GDP growth took a huge tumble into negative 7.3%—lower than Malaysia’s overall GDP for the first time in 17 years.

Globally SMEs are seen as the engine of economic growth. With experts predicting a financial crisis looming just around the corner, we need to take important, realistic steps to help Malaysia’s vulnerable segments get back on their feet.

An economic crisis requires an economic solution, and microfinance might just be the answer.

Innovation in Microfinancing

One of SMEs’ biggest barriers to rapid development is a shortage of both debt and equity financing. Thus, access to financing has been identified as a key element for SMEs to succeed in a developing country.

Microfinancing, unlike traditional lending, is usually backed by technology which makes it financially feasible to lend smaller amounts suitable for SMEs as the technology allows financing disbursement at lower costs. Microfinancing institutions aren’t usually tied to the archaic credit scoring models invented in the late 80’s. They have more leeway to incorporate AI and other technology to find more up-to-date data to determine a customer’s ability to pay back.

For example, many microfinancing institutions have created a user-friendly and intuitive UI that simplifies the process and helps users gain their credit much faster than existing models, and without headache. This allows customers—usually needing financing to keep their business afloat or seeking to expand their business—to maintain some sense of dignity as they seek financing.

However, that’s not enough to turn the tide on Malaysia’s economy. True innovation in my opinion, must be backed by wisdom and compassion. Microfinancing institutions must be flexible in the face of changing times, and the terms offered should be fairer to the customers.

Short-sighted microlenders might look at the amount of credit disbursed and assume that these lines of credit have helped to address an SME’s needs. Meanwhile, a customer-minded organisation might bundle financial and non-financial services to provide a greater impact on SMEs, such as partnering with certified business mentors to offer training and counselling. The three-year PROMISE IMPACT project conducted in Indonesia did this, which helped clients maintain better business records and microfinancing institutions understand their clients better.

Islamic Finance Can Change The Game

Islamic finance, which is uniquely durable against bubbles, might provide some of the wisdom necessary to help Malaysia’s economy.

Islamic law states that making money from money is wrong. It requires financial transactions to be supported by genuine trade (murabahah concept). The benefit here is two-fold. In the shariah way, risk is shared between more than one party, helping to reduce the negative effects on the financing receiver if something goes wrong. Meanwhile, the trade involved in the financing disbursement system also provides a boost on economic activity.

Murabahah is just one of the many Islamic finance concepts that might create a more resilient microfinancing ecosystem. With equality at the forefront, all the different guidelines provide a great deal of flexibility for creativity which can produce a win-win for all parties involved.

Turbulent times are coming ahead. It’s not enough to reinvent the wheel and call it a success. True innovation comes from actually thinking about the pain points a user might have, and working to solve their real problems—which is why we have launched GoHalal.

GoHalal is curated by Sedania’s As-Sidq Tawarruq Platform, backed by the Shariah Advisory and automates the “buying and selling” of commodities to back financing disbursement. We have a full-suite ecosystem for our partners that covers takaful insurance and e-mandate services, which offers a great deal of flexibility to create unique microfinancing solutions to suit unique markets.

With Islamic banking, microfinancing institutions can help to change the misconception that microfinancing is just “Ah Longs” in a trench coat by mitigating high-interest rates and compounding interests that have devastated many Malaysians before.

I believe that a combination of Islamic finance principles as well as creative problem solving is the key to microfinancing’s future.

Nisa Ismail, CEO of Sedania As Salam Capital Sdn Bhd

The views expressed are those of the writer and do not necessarily reflect those of Bank Negara Malaysia, the organiser of MyFintech Week 2022.

Wanyi Wong, FinTech leader, PwC Singapore agreed that FinTech will transform the business landscape, but how to best adopt and embed a FinTech-centred strategy, underlined with inclusion, trust, transparency and accountability1, with an aim to emerge as serious contenders and industry leaders?

Within ASEAN, to date, there are 3,408 FinTech companies operating across sectors1. As the number of FinTech companies continue to grow year-on-year, there will be constant challenges at both ends of the corner; i) Co-founders of the FinTech start up to be able to secure Pre-Series funds amid higher volume of competition bidding for the same funds and, ii) FinTech investor communities in ensuring the proposed deals are ‘quality deals’ that are ‘realistically’ a game changer along with strong potential valuations. These challenges will result in lengthy diligence process from current average of between 3 to 5 months per deal, to up to 9 months or more.

Hence, it is important for aspiring FinTech companies to establish a clear value proposition from the onset by adopting to the First Principles Design as a framework approach to FinTech innovation2. First Principles is a solution-based approach to problem solving. It brings you back to the physics of the design and aims to create new solutions from scratch after revisiting every assumption for a given problem. It differs from design by analogy whereby you attempt to find better ways to iterate on a base design and aims to find technical solutions to previous limitations which, in the long run, can be proven costly to maintain. First Principles Design provides guidance towards determining core value proposition of a FinTech company:

  1. Questions the problem, assumptions, and implications – What are the problem(s) to be solved? What are the underlying assumptions used? What are the implications of the problem(s) not being solved?
  2. Understands people and their needs – What do customer wants? Will the solution to the above problem suited their needs? Will they subscribe to it once the solution is made available?
  3. Observed and empathises with the target user – Can the above hypothesis be tested and confirmed with the customer? Can you secure a buy-in from the customer?
  4. Identifies alternative strategies and solutions that might not be instantly apparent – If the above solution is not commercially or practically feasible, is there other alternative to the strategy and solution?
  5. Involves ongoing experimentation, sketching, prototyping, testing and trying out concepts and ideas – ‘How Might We’ (“HMW”)? Design, develop, test – iteratively.

An example of successful First Principles Design is M-Pesa in Kenya. M-Pesa is a branchless, mobile phone-based money transfer service, payments and micro-financing service.3 It was launched in 2007 by Vodafone Group plc and Safaricom during the time Kenya population was 37mil with limited banking infrastructure. Leveraging on its wide telecommunication footprint, M-Pesa began expanding into financial services to serve the far-unreached and unserved population. To date, M-Pesa is servicing over 49.7mil customers over 7 countries with more than 900,000 agents, 15bil transactions in 2020, and have lifted at least 2% Kenyan households out from extreme poverty.

M-Pesa has also added full fledge banking products such as Tap and Pay NFC card, loan and savings products, payment and purchases and government services on its platform. Outside financial services sector, Space X by Elon Musk is another successful First Principles Design. It is the first one to create and successfully land a recyclable rocket with fraction of the cost. First generation of iPhone by Steve Jobs was also the result of First Principles Design4. Rather than enhancing from the likes of popular (back then) Motorola flip phone, Palm Pilot or Nokia phones, Steve Job’s started from scratch in reimagining a phone, with large screen built-in browser and iPod music device combined into becoming world’s first smart phone.

In conclusion, adopting to Elon Musk’s First Principles Thinking5 allows you to identify and define your current assumptions, break down the problems into fundamental principles and allows you to create new solutions from scratch without the legacy limitation of existing model. By identifying strong core value proposition, FinTech companies can be expected to produce high ‘quality deals’ with sustainable business model with clear core competency that can help to win crucial funding from the investment communities.

Hudhaifa Ahmad is Executive Director of MyAngkasa Digital Services; CEO of MYISCO

The views expressed are those of the writer and do not necessarily reflect those of Bank Negara Malaysia, the organiser of MyFintech Week 2022.

[1] Source: “FinTech in ASEAN 2021: Digital takes flight”

[2] Reference to First Principles Design Case Study by NUS Business School, National University of Singapore




Eddy Wong, Co-Founder, CEO and Managing Director of

The financial industry has always been regarded as a key cornerstone for economies, facilitating stability and growth through its services for government, businesses, and the public. Now that we are in 2022, financial services in a digitalised form are set to become the norm, driven by a new generation where digital channels and infrastructures are the preferred mode for transactions.

As one of the core financial services sector, insurance have always provided the vital service of protection, safeguarding organisations and individuals against unforeseen accidents or circumstances. While the role of insurance is understandably critical, this is not exactly reflected in today’s reality as Malaysia’s underinsured population have consistently hovered around the 50% mark in the past few years.

This problem has served as a rally cry, that have seen to both public and private sectors continuously finding ways to bridge the underinsured gap, something we have witnessed in the Perlindungan Tenang programme. This has also led to the emergence of the relatively new digital insurance market segment with its presence accelerated due to pandemic-driven (fear) economy, continuous escalation of medical costs, unaffordable protection, and a lack of financial inclusion.

A rising star in the digital insurance market are the digital insurers, a new generation of players comprised mostly of startups that wants to revolutionise insurance offerings and impact through tech-driven innovation. While digital insurers are still relatively small compared to the giants of the insurance industry, with the right innovation and go to market strategy, they could massively contribute to reducing the number of underinsured. VSure is one such player that offers bite-sized insurance adapted to suit the modern lifestyles of Malaysians.

Beyond closing the underinsured gap, digital insurers also play a critical role in driving Malaysia forward in more ways than one. Here are the three key roles digital insurers play, beyond offering protection.

Impactful Innovation

Like other industries, we have observed many insurance players undergo accelerated digital transformation processes in the past few years. Similarly, digital insurers who are digital by nature, operates on a redesigned model that prioritises a completely end-to-end digital experience, with a distinction on innovative product offerings that sets it apart from competition.

The race to close the underinsured gap have pushed digital insurers to continuously develop new insurance and protection solutions that are more affordable, beneficial, and meaningful for the people and socioeconomical benefits of Malaysia. We are glad to be taking part in this race and contribute to Malaysia with new, innovative, and impactful protection that can help the nation as a whole move forward.

Digital Economy

This is a key focus point for Malaysia as detailed in the latest MyDigital blueprint, the digital economy is expected to contribute 22.6% of the nation’s gross domestic product by 2025. As digital insurers fit under the digital economy umbrella, we too contribute to its growth in many ways.

Firstly, digital insurers have a key role to play in educating the masses on new digital-based offerings. With majority of the underinsured hailing from the B40 bracket, digital insurers must also bear the responsibility to help Malaysians adapt to its new solutions, helping the rakyat go digital. Digital insurers also contribute to the creation of a digital workforce, with the constant need for tech talents to support its existing business and future plans to innovate with the incorporation of Internet of Things, Artificial Intelligence, Big Data, and more technologies into its offerings.

Digital insurers also protect digital economy workers. The gig economy workforce is a massive subset of the digital economy and many digital insurers have introduced cost-effective insurance solutions that protects gig economy workers who have continuously worked tirelessly throughout the pandemic period.

Financial Literacy

This is perhaps the most crucial role in my opinion. While the importance of financial literacy cannot be understated, unfortunately there is still a lot more to be done in this space, as private equity firm Creador’s 2020 survey indicated that almost 70% of Malaysians need financial literacy support.

As a key sector in digital financial services, digital insurers must also lead the charge in this battle to continuously educate Malaysians on the importance of staying protected. This is a key mandate given to VSure as participant of Bank Negara Malaysia’s FinTech Sandbox programme, in which we have been implementing through hosting lifestyle activities that comes with protection equipped. An example is our Charity Virtual Runs, where participants paying a minimal fee will get to the take part in the run, financially contribute to partnering non-profits, and receive VSure’s Flexi-Fit personal accident protection.

This battle to educate masses on the importance of financial literacy needs to be fought by all parties at an ongoing basis and I am glad that digital insurers have a role to play in this fight and remain hopeful that our contributions will be able to help move the needle.

Source: Creador: 70% of Malaysians in need of financial literacy support – The Edge Markets

Eddy Wong is Co-Founder, CEO and Managing Director of

The views expressed are those of the writer and do not necessarily reflect those of Bank Negara Malaysia, the organiser of MyFintech Week 2022.

Nikhil Khandelwal, Vice President of Growth, Pulse iD

Can you name an industry that is worth $ 200 billion and yet remains partially untapped?

Well, the after-effects of the pandemic have shaken the world on the whole, but it’s the financial sector that has suffered a major drawback. Call it the dire urge to compete or stay in the market. As a result, financial institutions worldwide are launching innovative products and services to capture and generate new revenue streams for themselves.  

What’s the billion-dollar untapped Industry?

When coming to the customer’s point of view, what could retain them helps them make their lives easier. The payment transformation has a strong capability to improve the liquidity and increase the revenue capture of the FI’s. 

Coming back to the question that has been raising your anxiety since the first glance, it’s the next-gen loyalty program. The evolving technology is  advantageous for digital-savvy institutions that have accepted Fintech. Yet, at the same time, the industry analysts still claim that some $100 billion worth of loyalty points go unused every year since several Financial Institutions are still resisting innovation. 

Therefore it shouldn’t be surprising that about 44 million people moved to a new primary Financial Institution for themselves single-handedly in 2020. 

What calls in for a high-end Gen-Z Turnover Rate?

The reason for the great switch among Gen Z remains the same; Lack of Convenience, High and Intolerable Friction, and Negligible Customer Rewards. While we still sit and blame the decentralized exchanges (DEX) for capturing a considerable share as digital currency media, loyalty points as an alternate digital currency are equally pacing up. 

When banks integrate with simple API (Application programming interface), they can mend a bridge between their customers and selected retailers to monetize the loyalty reward digital currency across their merchant network. The loyalty dynamic converts the points to currency during the online checkout process within the bank’s network of designated merchant partners.

Why is Loyalty Programs Game a big step towards a Digi Savvy Future?

#1 Today, millennials and Gen Z need creative ways to engage with the institution’s financial services. The loyalty network can attract young depositors looking for a new and revamped Financial Institution. The innovative technique is a key theme to attract the new and retain the existing ones. 

#2 The wider future aims to recognize loyalty points as a payment mode equal to debit or credit card, irrespective of the program. Currently, API integrations allow customers to pay with points at online e-commerce sites to help them enhance their payment experience. 

#3 The loyalty points can also help to pay off bills or contribute to a favorite charity. The flexible usage of the points is also useful in promoting the local businesses widely affected by the pandemic. 

#4 A carefully crafted cyber loyalty framework can personalize the consumer’s whole purchasing experience and thus boost the expanded options to create a meaningful retail experience for the ultimate user. 

Nikhil Khandelwal is the Vice President of Growth at Pulse iD

The views expressed are those of the writer and do not necessarily reflect those of Bank Negara Malaysia, the organiser of MyFintech Week 2022.

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