With a diverse population and a growing middle class, Malaysia is an ideal test bed for developing and commercialising fintech solutions. The emergence of fintech has opened up new opportunities which can greatly benefit the financial industry. At its core, fintech has led to the creation of various business models that help improve and simplify financial transactions, which 10 or 20 years ago seemed impossible. Here, I would like to highlight three key areas that Islamic finance stand to gain from fintech. Entrepreneurs too stand to gain from fintech. First, fintech provides the technological underpinnings to realise the goal of Islamic finance in creating a risk sharing economy. This will in turn benefit entrepreneurs who will gain wider access to bank-intermediated credit. An example is the Investment Account Platform (IAP). IAP is Malaysia’s first multi-bank online 1/3  BIS central bankers' speeches  platform that combines the credit evaluation expertise of Islamic banks and the power of technology to channel funds from investors to economic ventures. This virtual “multisided” platform facilitates a collection of interesting investment ventures and projects, with transparent risk-return rewards for investors. Second, fintech has opened up new sources of funding to entrepreneurs, in what is increasingly being referred to as the alternative financing space. Crowdfunding and peer-to-peer (P2P) funding platforms have emerged as highly efficient “matchmakers” between entrepreneurs and investors. From the USD10 million raised globally in 2009 through nine major platforms, crowdfunding platforms mobilised over USD767 million in 2016 with backers from over 200 countries.
Deposit insurance, like other forms of insurance, is there to deal with low probability events that have a major impact if they occur. To make an obvious analogy, you still take out fire insurance even if you do not expect your house to burn down. Hong Kong stands out as one of the few developed banking centres which does not have a DIS. There is of course no reason why we should follow the rest of the world just for the sake of it. But we should at least keep our safety net arrangements under regular review to ensure that they are still appropriate to changing market circumstances. This is what we did last year when we engaged an external consultant to consider whether the existing deposit protection arrangements in Hong Kong were sufficient, and if not how they should be changed. The conclusion was that an explicit and limited form of deposit insurance should be introduced. We subsequently undertook a public consultation on this proposition and on the detailed design features of the proposed scheme. This consultation generated a heated, albeit civilised, debate. Not surprisingly, some of the large banks vehemently opposed the scheme. Opinion in the community as a whole was however generally supportive.