• Ruziana Mohd Mokhtar, Central Banking Services Human Capital Development, Bank Negara Malaysia
• Delegates from AFI member institutions
• Speakers from invited entities
• The BNM and AFI team

“Selamat Pagi” (Good morning) and a warm welcome to all to the BNM-AFI Member Training on Platform Economy and its Promise for Financial Inclusion.

AFI provides a range of services to its members, capacity building being a critical and a preferred one. The demand for training has always been high, but has been increasing. And when we received the response to this training, it surely was over whelming. For those who have attending AFI Member Trainings before, you would know that this class size is much larger than usual and there is reason behind that.

The world is going through a new economic revolution driven by technological innovations and increased online connectivity – and at the heart of it, the inevitable rise of the platform economy. This digital economy fully utilizes the internet to connect dispersed networks of individuals (consumers & producers) by eliminating trade barriers by using increased information sharing and circulation of data. This creates a more open economy, with greater users’ participation. Furthermore, platforms have the ability to allow organizations to extend and share information, services and skills, across a wider ecosystem that links new networks of partners, suppliers, and customers. The strategic use of technologies to create platform-based business models are driving up unprecedented growth opportunities in the rapidly expanding digital economy.

This is exemplified by the fact that seven out of the ten most valuable companies globally are now based on a platform business model instead of the traditional products-based model. Over the years, we have seen how many valuable companies make that crucial shift towards technology driven platforms to remain relevant – such as consumer platform services and business-to-business platform services. According to Accenture’s Technology Vision 2016 survey, 40% of executives believe that adopting a platform-based business model and engaging in ecosystems of digital partners are very critical for their business success.

The platform economy has been reshaping industry sectors such as hospitality, retail, and transportation – and it is important for us here today to recognise and acknowledge that the financial services sector is next in line to be disrupted by this movement. Super-platforms such as Google, Facebook, and Ant Financial have been making inroads in financial services sectors around the world. In China, the rapid growth of Alipay and WeChat Pay has transformed the digital finance ecosystem. Not only it is limited to global super brands, the platform economy empowers the small businesses as well – with Malaysia well positioned as one of the top four countries in Asia Pacific in terms adoption of the economy. A survey by FedEx Express showed that Malaysian SMEs have an adoption rate of 88%, allowing it to surpass more developed economies such as Singapore (67%) and South Korea (59%) – further elevated by the country’s high mobile penetration rate (146% in 2018). According to a 2019 report by Hootsuite and We Are Social, 75% and 58% of Malaysians spend their money via e-commerce and mobile commerce platforms respectively. As these platforms scale, control over trade could shift from countries to these digital platforms. In a world dominated by platform companies that offer ways for customers and companies to connect, countries that want to act as global trade hubs must think like a “platform nation”.

With the global context being set as it is today, it is thus not surprising that we had such an overwhelming response to the training. To add on to that, trainings related to Digital Financial Services (DFS) has been the most sought-after policy area that AFI focuses on – with over 50% of our total participants trained and on average 5 trainings per year engaging in DFS related topics. AFI has also identified DFS as a major driver of financial inclusion in emerging countries, further solidifying its case as our leading thematic area. The response to the training is perhaps in itself an indication of the relevance of the training to the work being done in member institutions. Further, Malaysia is one of the leading countries in platform economy initiative and that will surely ensure that you will return to your respective countries with some interesting ideas to take forward. Hence, many of the speakers invited for this training are mostly from the market players who are amongst the platform providers.

Here at AFI, policy or regulatory changes or implementation of changes are our most ideal outcomes from these sorts of trainings, and we would like to offer our support to help you implement such changes in your respective countries.

Before I end my speech, I would like to convey my sincerest thank you to our co-host, Bank Negara for their support to the new ideas for training and as well as the AFI team for their efforts in realizing this training. I wish you a fruitful training.