Approaching Your RMiT Regulatory Obligations

The digital revolution within the financial sector has been evolving at pace; driven by developments in technology and telecommunications, influenced by customer experiences in the B2C space and accelerated by a burgeoning FinTech community.

Competitive forces in fintech are reshaping the payments and wider financial services landscape. In Asian markets, competition comes from non-traditional sources in the likes of Grab, Razer and WeChat. E-Money lenders who are disrupting the payments and digital wallet space, leave traditional FIs walking the tightrope between their appetite for risk and staying relevant to their customers. 

Maintaining relevance opens the door to risk

Partnerships between financial institutions and fintech start-ups have enabled traditional FIs to remain relevant in new markets as they develop. One example is ride-hailing firm Grab partnering with Malayan Banking Bhd (Maybank), Malaysia’s biggest bank, to drive the usage and adoption of GrabPay mobile wallet. 

Mergers and acquisitions are also in full swing as new entrants make their mark. Founded in 2005 and dual-headquartered in San Francisco and Singapore, gaming company Razer acquired MOL Global, Inc. in 2018 to create Razer Fintech. The financial technology arm of Razer Inc. has since grown to become one of the largest digital payment networks in Southeast Asia.

Of course, with the increased complexity in IT ecosystems comes increased exposure to cyber threats and sophistication of attacks, and the need to set regulatory guidelines.

Central Bank intervention

In acknowledgment of the evolving FI landscape, Central Bank of Malaysia (CBM), Bank Negara Malaysia has developed the Risk Management in Technology (RMiT) policy which sets out the CBM’s requirements with regards to FI’s management of technology risk.

The RMiT impacts all local Malaysian banks, insurers, e-money lenders international banks and is in effect from January 2020.

It provides a framework for FIs operating in Malaysia to strengthen operational technological resilience against potential cyberattacks and to ensure continued confidence in the financial system.