INNOVATION IN THE MALAYSIAN FINANCIAL SECTOR
How is BNM driving responsible innovation in Malaysia?
We facilitate innovation that delivers real economic value while preserving financial stability and public trust.
01 | STATEMENT FROM THE GOVERNOR
"For Malaysia, responsible innovation means addressing real economic and public challenges we face as a nation. At the same time, responsible innovation should be risk-aware. Together with the promise of innovation, responsible innovation should also anticipate and mitigate emerging harms."
Dato' Sri Abdul Rasheed Ghaffour
Governor, Bank Negara Malaysia
MyFinTech Week 2025
02 | APPROACH TO REGULATING INNOVATION
Unlocking innovation responsibly.
Promoting responsible innovation and a level playing field across the sector, guided by regulatory principles.
Parity
Proportionality
Neutrality
We implement our regulatory philosophy by focusing on the following approaches:
Co-create and Engage
We collaborate with industry to identify emerging issues early, test high value use cases and collectively shape the future of financial innovation
Adapt Regulation for Innovation
We strive to provide regulatory clarity and adapt frameworks to facilitate innovation while safeguarding stability, trust and financial integrity
Enable Safe
Experimentation
We provide structured pathways where new ideas can be tested responsibly, enabling innovation within clear safeguards
Enable Shared Infrastructure
We support shared building blocks that allow innovations to interoperate, scale, and deliver system‑wide value (e.g. Open Finance, Interoperable Credit Transfer Framework)
03 | CO-CREATION AND ENGAGEMENT INITIATIVES
Co-creating the future of finance.
Innovation is increasingly cross-sectoral and cross-border, shaped by rapidly evolving business models. Close collaboration between regulators and industry helps navigate this complexity.
BNM convenes industry working groups that bring together financial institutions and other stakeholders to collectively shape the development of innovation in the sector. These platforms support capacity building, encourage collaboration and enable meaningful industry input into policy and regulatory considerations.
Notable initiatives include:
Asset Tokenisation Industry Working Group
The inaugural initiative under the Digital Asset Innovation Hub facilitates collective exploration of asset tokenisation by Financial Service Providers.
BNM supports the development of industry‑led guidelines and best practices that are drafted collaboratively by market participants to promote consistent standards, build industry capacity and support responsible innovation.
Notable initiatives include:
AI Governance Framework
The banking industry has recently released the AI Governance Framework (AIGF), an industry-led guideline and best practices for managing AI-related risks, led by the Chief Risk Officers Forum under the Asian Institute of Chartered Bankers, with the support of BNM.
As part of our broader engagement with the financial ecosystem, BNM alongside industry, academia and the public convenes events that foster dialogue, shared understanding and co‑creation of future‑ready solutions.
Notable events include:
MyFintech Week is Malaysia’s flagship fintech event which brought together regulators, industry leaders and innovators, cohosted by BNM and key ecosystem partners to explore the evolving future of finance and technology.
MyFintech Week 2025
Sasana Symposium is an annual forum featuring experts and thought leaders discussing pressing economic and financial issues facing Malaysia.
Sasana Symposium 2026
04 | ADAPT REGULATION FOR INNOVATION - AREAS WE ARE EXPLORING
Exploring what’s next in finance.
As the financial sector evolves, new technologies bring both opportunities and risks. We actively explore these areas to build understanding, support responsible innovation and keep our regulatory approach effective and proportionate.
05 | ENABLE SAFE EXPERIMENTATION
Where innovation meets real-world testing.
Innovation thrives on experimentation, and trust relies on strong safeguards. Our sandbox programmes provide structured pathways to test new ideas responsibly, supporting innovation while safeguarding the integrity and stability of the financial system.
Financial Technology Regulatory Sandbox
The Sandbox facilitates live testing of innovative financial solutions which are deployed with regulatory flexibilities granted by BNM. It operates on two tracks, the standard track for all types of participants and Green Lane, an accelerated track for financial institutions.
Digital Asset Innovation Hub (DAIH)
The DAIH was established in 2025 to promote responsible innovation in digital assets, supporting the digitalisation of Malaysia’s financial sector and the wider economy. It serves as a collaborative platform for co‑creation and capacity building, enabling the exploration of blockchain technology for real‑world financial applications.
Frequently Asked Questions
- The Regulatory Sandbox is broadly open to financial institutions, fintech companies and new entrants seeking to test innovative financial solutions that face regulatory impediments.
- The DAIH Sandbox is specifically focused on digital assets and blockchain technology solutions, functioning as a co-creation platform rather than a pure testing initiative. Unlike the Regulatory Sandbox, presence of regulatory impediments is not a prerequisite to participate in the DAIH.
The appropriate Sandbox depends on the core technology and use case of your solution:
- Regulatory Sandbox: This programme is suitable if your solution focuses on enhancing or testing financial services activities, regardless of the underlying technology. It accommodates a wide range of innovations such as income estimation models, compliance solutions and process automation across the financial sector.
- DAIH: This programme is designed specifically for solutions that centre on digital assets or blockchain technologies. If your solution involves tokenised deposits, ringgit backed stablecoins, distributed ledger based supply chain financing, or other blockchain enabled financial applications, the DAIH Sandbox would be the more appropriate pathway.
Regulatory Sandbox
The application processes for both Standard Sandbox and Green Lane can be found on Sandbox: Guide to the Application - Bank Negara Malaysia. Only applications submitted in accordance with the specified steps will be considered for assessment.
DAIH
Applicants may submit their expression of interest and/or proposals to [email protected]
Regulatory Sandbox
For more info: Financial Technology Regulatory Sandbox
Contact us: [email protected]
DAIH
For more info: Digital Asset Innovation Hub
Contact us: [email protected]
06 | RECENT RELEASES
Latest thinking on innovation.
Exposure Draft Nov 2025
Exposure Draft on Open Finance
Sets out BNM’s proposed regulatory requirements for open finance as a foundational framework to facilitate consent-driven sharing of customer information across the financial sector in a secure, interoperable and timely manner.
Discussion Paper Oct 2025
Discussion Paper on Asset Tokenisation in the Malaysian Financial Sector
Sets out BNM’s proposed approach to exploring asset tokenisation, aiming to co-create a safe and sustainable roadmap for the development of tokenised financial services in Malaysia.
Discussion Paper Aug 2025
Discussion Paper on Artificial Intelligence in the Malaysian Financial Sector
Outlines BNM’s regulation and development approach to the adoption of AI in the Malaysian financial sector, with a focus on responsible adoption that enhances consumer outcomes and broader policy objectives
