Wong Partner FinTech Beyond the Hype 50 MEMBER NEWS SPECIAL Rules of Engagement FinTech holds enormous potential to raising capital It is now seen as a mean to develop SMEs improve the efficiency of processes at the back end for financial institutions and to open the door to sophisticated financial management for the mass affluent But these rewards need to be balanced through regulation to ensure financial stability Regulators will need to be Cooperative be ready to enter into constructive dialogue with the Fintech community Approachable have a dedicated team as a point of contact Reliable issue clear statements when start ups or financial institutions approach them for guidance Responsive provide timely response to applications given the ever shortening product innovation cycles and Prepared to harmonise laws technology transcends borders and a harmonisation of laws would be desirable Governments will need to consider funding FinTech initiatives and start planning for increased bandwidth through greater spectrum allocation Start ups must also cooperate by ensuring a strict compliance with the regulatory regime As a firm we work towards being at the forefront of these developments whether it be advising on the regulatory issues and structuring transactions involving investments into start ups It is also our Firm s strategy to keep our clients apprised of developments be it regulatory or market developments In September we produced a series of videos on the future of FinTech as seen through the eyes of players and our bench of lawyers in Asia Pacific The aim was to spark discussions on the different aspects of FinTech especially in areas where it might disrupt our clients businesses or business environments Ultimately we are informing the clients of our clients about the future changes that will happen in the banking and finance industry sparking future adoption of these new technologies and ensuring that our clients remain ahead of the Fintech curve Technology companies are disintermediating formal financial institutions equity crowdfunding peer to peer lending mobile payments international money transfers and foreign exchange through apps are some such examples Tech start ups and the solutions they provide are beginning to attract the attention of the regulators and challenge the status quo enjoyed by formal financial institutions Basically what we are seeing is that start ups have moved from the realm of being too small to care to too large to ignore What is this Uber moment in the financial services sector all about Why does it matter And what is our role in this Anticipating the Waves FinTech an abbreviation of financial technology is the term often used to describe the disruption caused by technology The term is widely used but yet nebulous in concept As a firm FinTech is viewed by us as a game changer a way of transforming the way the financial services sector deliver services and interact with clients We are seeing FinTech taking a foothold in Malaysia in the form of equity crowdfunding and in the very near future peer to peer lending Equity crowdfunding is providing a platform to SMEs to raise capital without having to wait until it has achieved the milestones required for a listing on the stock exchange With the eagerly awaited announcement on the peer to peer lending approvals it will not be long before marketplace lending becomes a common feature Peer to peer lending will provide SMEs the access to funding where banks are unwilling or unable to do so The next wave will be the cashless world Innovations have emerged that is leveraging on mobile devices and the connectivity of consumers Cheques cash and credit cards will likely be displaced Consumers will have their wallets in their mobile phones But with this development more data will be harnessed from these transactions allowing financial institutions service providers and merchants to tap on artificial intelligence AI AI can analyse vast amounts of information recognise sophisticated patterns and empower these providers with new analytical capabilities As a Firm we are acutely aware of these developments and have sought to decipher them In April this year we released a report with Euromoney entitled Ghost in the Machine Artificial intelligence risks and regulations where we considered the benefits of AI and also examined the risky consequence of a programming error or an AI programme malfunctioning

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