KUALA LUMPUR: Banks need to embrace the competition arising from the evolution of financial technology (fintech), instead of fearing it, to better themselves, says CIMB Group Holdings Bhd chairman Datuk Seri Nazir Razak.
“In the advent of more fintech companies, banks have to respond.
“And the response is not trying to crush them but to compete with them and show that we can deliver value proposition for customers,” Nazir said on the sidelines of the World Economic Forum (WEF) Asean 2016 here yesterday.
In commending Bank Negara for its plan to launch a regulatory framework to address concerns over fintech, Nazir said: “We applaud Bank Negara’s initiative. It is good to set a regulatory framework for fintech.”
He noted that the financial industry should after all be a regulated industry to ensure safety and appropriate protection for end-users.
Nazir was one of the panelists for the”Asean and the Big Picture” session at the WEF Asean 2016.
According to Nazir, it was important for policymakers to strike the right balance in dealing with disruptive technology and promoting entrepreneurial growth.
“We want to welcome disruptive technology but we don’t want to welcome destructive competition and technology, “ he said.
“We need to embrace the fourth industrial revolution, and in that context, the Government has to make the right balance… it needs to find ways of encouraging entrepreneurs, allowing them to challenge big businesses for them to be successful and create value,” he added.
The Fourth Industrial Revolution was a major theme at the forum. It referred to a fusion of technologies that is building on the third industrial revolution, that is, the digital revolution that had been occurring since the middle of the last century.
According to Professor of International Economics of the University of Indonesia, Mari Elka Pangestu, policymakers in Asean have to tread very carefully in the advent of the fourth industrial revolution.
“Governments have to take comprehensive approach in policymaking both nationally and in Asean,” Mari said during a panel discussion.
“It is their role to facilitate and create a conducive environment to promote growth and technological development within this region” she added.
In the same tone, Nazir said: “Governments’ right response is to encourage and help us realise our greater potential as opposed to being defensive and too protective.” – THE STAR ONLINE