Fintech and financial literacy go hand in hand, with the former offering boundless opportunities, while the latter is crucial for possessing the right skills and knowledge to benefit from those opportunities.
These were among the points highlighted by Bank Islam Brunei Darussalam (BIBD) Deputy Managing Director 1 Hajah Noraini binti Haji Sulaiman in an interview with the Bulletin, ahead of the ASEAN Business and Investment Roundtable 2021 on Fintech and Financial Literacy that took place yesterday.
Speaking on the importance of fintech and financial literacy, Hajah Noraini described fintech as being all about financial technology – the integration of technology into the offerings of financial institutions. “They’re now two in a pod, it’s very difficult to separate them.”
“They go hand in hand,” she said. “For example, ourselves, when we look into fintech, we are trying to get them to fuse, to be beneficial. Of course, it’s more efficient and it’s also for those who do not have access to our financial services. So it’s very important because it enables financial infusion, and then financial literacy into making the right kind of financial decisions that you need to make in terms of where you are.”
“I believe a lot of Bruneians at the moment, having access to fintech, have used financial technology to actually get access to available investments outside of Brunei,” she continued. “So it’s boundless. There’s no boundary attached to it so you can have access to it. It doesn’t have to be the financial products that are provided by the Brunei financial institution. It can go beyond what is offered in Malaysia, Singapore, in other areas. However, if you don’t exercise financial literacy, you might get burnt.”
“There are a lot of benefits attached to it, but at the same time you have to understand, have the right skill and the right knowledge to actually apply what is best for you using fintech.”
The Deputy Managing Director 1 affirmed that using fintech and financial literacy wisely will open up many doors, opportunities and benefits, but noted that there are also risks out there.
Hajah Noraini shared that different countries within ASEAN are on different levels for fintech.
“For example, digital banking licences in Malaysia, the Philippines, Singapore, Indonesia and our own aspiration to go into that space, because digital banking of course is here actually in certain parts of the world but in varying degree depending on where you are.”
Elaborating on the importance of fintech and financial literacy in Brunei, she mentioned two financial literacy surveys conducted by the Brunei Darussalam Central Bank (BDCB) in 2015 and 2018.
She noted that a national strategy was formulated following the first survey, which highlighted the need for awareness and education, as well as the need to periodically evaluate the performance of financial literacy efforts.
“The total debt service ratio (TDSR) from the regulator’s point of view was also created to make sure that the amount of household debt would not go beyond a certain point,” she said. “It gave us an understanding in terms of the level of financial literacy for Brunei in 2015.”
“As a result of that, even the central bank had actually put in their financial blueprint for 2016-2025 on the fifth pillar on human capital – the need for financial literacy awareness and education. So it is basically trying to educate the people of Brunei to be better at managing their financial means, to use the resources financially that they have now in a better way.”
She noted that it is also the aspiration of the country in Brunei Vision 2035, to aim towards the development of highly educated, skilled and accomplished people, a high quality of life as well as a dynamic and sustainable economy. “Financial literacy is part of that, so it goes towards complementing that.”
With regards to fintech, she said that the technology is here, noting that it is available in countries where Bruneian students go to study, such as the United Kingdom, Australia and the United States, to name a few.
“So when you come back to Brunei, and with the iPhone being very popular, it’s more than just a gadget for communication in terms of connecting people to talk, but also there’s a lot of information that can be used, and it gives access to financial services within the country and also outside of the country.”
“Again, without the knowledge of financial literacy you might make the wrong decisions and financial resources may be wasted as a result,” said Hajah Noraini.
“I think with the workforce, with the people of Brunei who are more literate and using the fintech available, such as, in BIBD’s terms, our NEX-GEN platforms, it would make life much simpler.”
“If we take the pandemic now, for example, if you have embraced digital banking, it will make you safe,” she said. “If you have embraced digital banking and financial fintech, it’s a better way especially now in the pandemic to safeguard yourself, because there is that degree of exposure to the pandemic if you have interaction with people nowadays.”
She added that there has never been a better time than now to embrace digital banking. “I think once the situation has settled in Brunei, we will be actively getting people to migrate, to embrace digital banking from all ages to make sure that: one, it’s very efficient, Insya Allah, and it saves time, it’s banking anytime, you’re not restricted to the banking hours and anywhere.”
“Interestingly, one of the findings of the second financial literacy survey was that if you’re in Temburong District, in Kuala Belait, I guess in the rural areas where proximity-wise you’re much further from the branches available, access seems to be very limited, so in terms of financial inclusion as well, fintech, you can have access to it.”
“So there’s safety, there’s better financial inclusion, and with the infrastructure and the fact that we will be airing awareness programmes even through social media, we hope to get financial literacy and financial inclusion to a level that is much, much better than what we have now.”
BIBD’s Deputy Managing Director 1 was one of the speakers to feature on a panel discussion focussed on the role of financial literacy in ASEAN’s economy prosperity at yesterday’s ASEAN Business and Investment Roundtable 2021.
She shared that she would be touching on financial literacy from an Islamic angle, noting that Brunei, Indonesia and Malaysia have a high population of Muslims. “It can also help promote financial literacy perhaps, looking at it from a religious angle because it is a responsibility that even in Al-Quran, there is a verse that says you need to have the knowledge to manage your wealth.”
Speaking on the ASEAN Business and Investment Roundtable 2021 itself, Hajah Noraini said, “It’s a very important platform, especially now,” adding that fintech is a buzz word around the world.
“More importantly, it’s a platform which is made available by the ASEAN cooperation. We’ve got a lot of branches going from the ASEAN nations’ cooperation. We’ve got the likes of defence, education, economy, there’s the ASEAN Economic Community (AEC) and there’s the banking integration being looked at.”
She also described it as a platform provided for businesses. “So there are a lot of commonalities as well where the ASEAN member countries can leverage on each other, especially geographically to complement each other, where they can leapfrog in many areas, depending on the resources they have or are short of. It’s basically leveraging on each other.”
From a business angle and also on the investment side, she said, “There’s a lot that we can do together within the ASEAN region, especially now with the pandemic and all. There’s a lot of help that we can bring towards each other and this can spill over to different types of economic activities on the business side.”