Discover how FinTech and its good governance impact Malaysia's digital economy with insights from Assoc. Prof. Dr Nor Shaipah!
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02 Aug 2022
5 Min Read
Associate Professor Dr Nor Shaipah (Guest Contributor), Ailyn Low (Editor)
Discover how FinTech and its good governance impact Malaysia's digital economy with insights from Assoc. Prof. Dr Nor Shaipah!
Technology has helped us in many areas of our everyday lives. One area that may have been even more seamlessly incorporated is finance. While FinTech (or finance and technology) may have exploded during the mid-2010s, it has already been here since the early 2000s as the Internet and e-commerce business models started to emerge.
It’s evident that as technology advances, many firms and companies in Malaysia must also start adopting FinTech and the digital economy or risk being left behind. Associate Professor Dr Nor Shaipah Binti Abdul Wahab, Head of the School of Accounting and Finance, shares the importance of FinTech, the digital economy, and ensuring good governance through institutional stakeholders.
Q: Why are FinTech and the digital economy important for companies and the country and what is their impact on them?
A: Essentially, FinTech and the digital economy are put in place to ease our processes — whether it be the companies or the consumers. It helps us with effective transactions and record-keeping. And if we aren’t roped into this advancement, we’ll be left behind.
Governments worldwide are paying so much attention to the advancement of the digital economy. Its rise worldwide changes the business landscapes where businesses that aren’t able to cope will be left behind because they’ll no longer be relevant to the industry.
According to a report by the United Nations in 2019, the consequences at a macro level, or the country level, will affect the country’s economic level following the change in these business preferences. If companies aren’t well-equipped, not only will they be left behind, but at the country’s level, it’d mean losing foreign investments. That’s why Malaysia’s paying so much attention to this.
Q: What are some of the ways to facilitate the move into a digital economy?
A: Even though we want to move completely into digitalisation, it’s difficult in Malaysia at the moment because there’s a large portion of the underserved community that doesn’t have the utilities to facilitate digitalisation. That said, we can’t put the other counterparts who have them at a disadvantage by not advancing as it’ll eventually result in us being left behind.
When countries are aggressive in transforming into a more digitalised economy, they’d use whatever they can to incentivise companies. Our government does provide transformational hubs for SMEs to access training and awareness programmes. However, there needs to be a form of moderation to provide advice and help to assess the extent of how the digital economy is relevant to the company.
As Malaysia prioritises digital transformation as the national agenda, any efforts to support it, including tax incentives, should be aligned with the economic development of the country. For this, corporate governance is crucial in playing a role to support digital transformation and, at the same time, keeping the firm’s risks under control.