KUALA LUMPUR: A strong 73 per cent financial technology (FinTech) firms in Malaysia are planning to expand their footprint beyond their current markets, according to the Asean FinTech Census 2018 study by Ernst & Young (EY)

EY also surveyed 170 Southeast Asia-headquartered FinTechs across 16 key subsectors, including payments, blockchain, money transfer, data analytics and robo advisory.

The study said FinTechs in Malaysia believe that they will be able to compete internationally, with 73 per cent of respondents planning to expand beyond their home markets.

Outside of Southeast Asia, the preferred destinations for growth and expansion are the US, UK and China, it said.

Partner and Malaysia Financial Services Banking & Capital Markets Advisory Leader at Ernst & Young Advisory Services Sdn Bhd Shankar Kanabiran with strong growth aspirations in the local FinTech industry that looks to expand beyond current markets, government support, policy and regulation are key to foster a sustainable and robust financial services ecosystem.

“In line with this, continuous dialogue with ecosystem players and the drive to push policy momentum further to ensure our financial markets remain competitive and secure are key,” he said.

He said however, FinTech firms may find themselves limited by funding options.

“Venture capitalists and banks are often the first port of call for fund-seekers, although most will not take on the credit risk of companies with a track record of less than three years.

“That said, there are many incubator and accelerator programs, and even government channels that FinTech firms can leverage for seed funding,” he said.

“They should also look to access the wider network of business opportunities and investors who can help them to scale and be a source of funding too,” he added.

In Malaysia, 19 per cent of FinTech firms believe there is high support from the government in terms of funding support, while 50 per cent say there is medium or moderate support, and 27 per cent indicate low support.

According to the respondents, the government should make funding more accessible (43 per cent), come up with more assistance schemes (29 per cent) and have a wider range of criteria (29 per cent).