Financial centre’s role in digital transformation era

TRX//MyCity
In-Depth
Financial centre’s role in digital transformation era
March 2, 2022

TRX is equipped with the infrastructure, services and technology to facilitate the new era of financial services to make it a distinct IFC

by DATUK AZMAR TALIB, CEO of TRX City Sdn Bhd.

MALAYSIA’S financial technology sector has come a long way since mid-2015 when Next Money first started promoting a new wave of financial innovations in the country.

Growth in the sector was accelerated by the Covid-19 pandemic as Malaysians increasingly shifted to digital payments over the past two years, giving rise to more local financial technology (fintech) start-ups and attracting more investors to the ecosystem.

The anticipated award of up to five digital banking licences by Bank Negara Malaysia in the first quarter this year, the country’s first, has generated excitement among industry players — who are expecting the new entrants to shake up the banking industry with innovative business models and leading-edge technology — helping to position Malaysia as one of the regional leaders in fintech.

Malaysia will be the second country in South-East Asia to issue digital banking licences after Singapore, which granted four such permits in 2020.

There are some established brand names among the 29 applicants for the Malaysian licences, including RHB Group and Axiata Group Bhd, Sunway Group, AirAsia Bhd, as well as Singapore Telecommunications Ltd and Grab.

Malaysia’s preparation to welcome this new chapter in financial services is an opportune time to take a look at how financial hubs globally have evolved to embrace the new digital era, especially in the post-pandemic world.

Going forward, digitalisation of the economy will likely increase at a fast pace whether in Malaysia or globally, says Azmar.

For example, the UK has leveraged its centuries-old position as a centre of global finance to become an emerging hub for fintech, fostering a new generation of digital-only banking apps such as Revolut, Starling Bank and Monzo.

At least, part of this success can be attributed to Level39, a tech hub at Canary Wharf established in 2013 by the estate’s management company to support early-stage technology business mainly in the finance and cybersecurity sectors.

Level39 helps start-ups grow by giving them access to a network of expert mentors, investors and talent, a dynamic workplace with worldclass facilities, and a constant flow of relevant events for business support.

Revolut, the UK’s biggest-ever private technology company with a valuation of US$33 billion (RM138.12 billion), was among the more than 1,000 industry leaders hosted by this incubator.

The digital bank has since moved to another location in Canary Wharf to cater to its rapid growth and it is redesigning the offices into flexible collaborative spaces to cater to its evolving employees’ requirements for remote working.

Such new working habits are something international financial districts will have to adapt to post-pandemic as more companies opt for hybrid work models.

It is not enough to just provide a place to work, but also to become a centre that fosters creativity and collaboration, along with providing the right amenities for a safe and conducive environment.

In Malaysia, HSBC Bank is also embarking on a hybrid work model as it relates to the new headquarters in Menara IQ at Tun Razak Exchange (TRX).

Changes like these are happening across the world, with greater priority placed on the safety and wellbeing of the occupants to provide a better work-life balance.

Going forward, digitalisation of the economy will likely increase at a fast pace whether in Malaysia or globally.

Technology will become more embedded with financial services. It is imperative that international financial centres remain adaptable to capture the emerging opportunities and become the location of choice for both conventional financial services and fintech companies.

The benefits are mutual. A new digital bank can get prestige and physical proximity to the relevant community by being in a financial centre, and financial centres that cater to digital banks reflect a forward-looking and agile market positioning.

This implies that international financial corporations (IFCs) need to be nimble and have the right infrastructure.

We believe TRX is equipped with the infrastructure, services and technology to facilitate the new era of financial services to make it a distinct IFC.

With a fiberised digital backbone and scalable telecommunication infrastructure, the district can support the current and future digital demands of its financial services clients.

In addition, TRX’s location and physical connectivity placed it at the centre of the action in the capital city.

More than that, TRX will be able to support the evolution of the future workplace, where its ample green spaces and on-site lifestyle hub are poised to support a changing workday ritual and office norms, while catering to activities inside and outside of work that is crucial to achieving an improved work-life balance.

 

Note: This article first appeared in The Malaysian Reserve, on February 23, 2022

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