Brunei is experiencing a significant transformation in its financial landscape, with the rapid emergence of fintech and digital financial services gaining momentum. This evolution is propelled by concerted efforts from both the public and private sectors, aiming to leverage technology to revolutionize financial services, enhance accessibility, and spur economic growth within the nation.
During the "Brunei's Fintech Future" forum at the Britain Brunei Business Forum in late-2022, Dato Seri Paduka Haji Khairuddin bin Haji Abdul Hamid, Brunei’s Deputy Minister of Finance and Economy, underscored the substantial advancements in fintech witnessed in the country. He highlighted the increasing adoption of digital insurance, mobile payments, and cashless transactions across various sectors. Notably, Dato Seri Paduka Haji Khairuddin emphasized, "Fintech is also transforming the public sector, with cashless payments being featured in e-Darussalam for services such as vehicle license renewal."
The statistics paint a vivid picture of this transformative shift, with digital payment transactions skyrocketing by a remarkable 87.8% over the past five years. This exponential growth has spurred local banks into action, prompting them to embark on ambitious modernization and digitalization initiatives. For instance, Bank Islam Brunei Darussalam (BIBD), a leading financial institution in the country, announced its ambitious goal to transition into a digital-first bank by the end of the decade.
Dato Seri Setia Dr Awang Haji Mohd Amin Liew bin Abdullah, chairman of BIBD Group, outlined the bank's commitment to full digital transformation during the launch of BIBD At-Tamwil Berhad's new Olive mobile banking app. He articulated, "The digital transformation will enable us to provide our customers with greater convenience, security, and accessibility to our financial services."
The Olive app, heralded as a groundbreaking development in Brunei's fintech landscape, introduces innovative features such as digital signature, digital contracts, and real-time financing approvals. Moreover, it facilitates non-face-to-face customer onboarding through electronic know-your-customer (eKYC) technology, enhancing convenience and accessibility for users.
Junaidi bin Haji Masri, chairman of BIBD At-Tamwil Berhad and managing director and CEO of BIBD, underscored the alignment of BIBD's digital transformation with national objectives outlined in the central bank's Financial Sector Blueprint 2016 – 2025. This blueprint, released in 2016, sets forth a comprehensive framework to develop the financial services sector, aiming to elevate its contribution to at least 8% of Brunei’s national GDP by 2025. Fintech development and technology are identified as pivotal enablers of growth within this strategic framework.
Furthermore, Brunei's commitment to digitalization is underscored by the Digital Economy Master Plan 2025, announced in 2020. This comprehensive plan aims to propel the nation towards becoming a smart nation through digitalization across various sectors. Key initiatives include flagship projects such as the National Information Hub (NIH) Project and the Digital Identity Project, designed to enhance data sharing security and enable seamless access to government services online.
Despite these strides, challenges persist. The absence of specific data protection legislation poses hurdles, impeding the seamless processing of personal data essential for fintech innovation. However, the government's proactive approach, exemplified by the establishment of a Fintech Regulatory Sandbox in 2017, demonstrates its commitment to fostering innovation in the financial sector.
In conclusion, Brunei's burgeoning fintech ecosystem signifies a transformative shift towards digitalization and innovation in financial services. With sustained collaboration between the public and private sectors and a steadfast commitment to embracing technology, Brunei is poised to unlock the full potential of fintech, driving economic progress and prosperity for its citizens.
Author: Christopher Wiesler
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