LABUAN, Dec 10 — Labuan International Business and Financial Centre (Labuan IBFC) continues to attract new business innovations and opportunities as attested by the influx of digital financial service providers, revolutionising its financial offerings.
This segment has grown significantly in the last four years, in tandem with its aspirations to have the market embrace digitalisation as the future of conducting business.
Labuan Financial Services Authority (Labuan FSA) director-general Datuk Danial Mah Abdullah said the “digital family” has grown due to the progressive approach by the centre in embracing the digital revolution by recognising the nature of all Labuan legacy licences that might be structured to be a digital variant, for as long as all entry criteria, regulatory requirements and supervisory needs could be met.
“The Covid-19 pandemic has also profoundly impacted the international market and businesses… it has forced businesses to pivot as the old ways of doing things will not work anymore.
“Many organisations have had to digitally transform their operations to meet customer expectations and needs,” he said at the second Connecting Digital Ecosystems Asia (CoDE Asia 2020) virtual conference held today.
The virtual edition of Connecting Digital Ecosystems Asia 2020 (CoDE Asia 2020) was themed “Is Digital Transformation Covid-19’s Real Panacea?” — highlighting the opportunities and challenges facing the digital ecosystem in this pandemic-riddled world and how digitalisation of financial services will also provide for financial inclusion.
Labuan IBFC’s debut as a digital friendly jurisdiction began in 2017 with just one licence and has since expanded with a wide range of digital businesses and players, from digital banking and insurtech to intermediaries such as robo-advisory, digital asset exchanges, crypto trading platforms, tokenisation licences and e-payment systems.
The jurisdiction has approved a total of 46 digital financial services operators as at June 30, 2020 including three digital banks, two digital securities exchanges and 19 crypto trading platform providers.
Labuan IBFC celebrated its 30th year of establishment in 2020, with more than 6,000 entities which include banks, insurance and insurance-related entities, trust companies and many other business sectors.
He said while it was important to grow the number of digital licence holders in the jurisdiction, Labuan IBFC encourages intra-Labuan IBFC transactional activities through the collaborations between its industry players in innovating product or service offerings, whether in the digital or conventional markets.
Mah said it was imperative for Labuan FSA — being the regulator and administrator of the jurisdiction — to ensure these businesses are conducted in an orderly and prudent manner and that regulations adhere to global standards.
“As such, it is constantly scanning the environment for new emerging risks and possible threats that would undermine the stability of the centre, such as those related to cyber and money laundering risks, as well as planned measures for a business environment post- Covid-19.
“Business-wise, we are holistically reviewing the various business guidelines to be in line with the various changes that are transforming the marketplaces and with the international and regional norms,” he said.
Labuan IBFC Inc chief executive officer Farah Jaafar-Crossby said Labuan IBFC offers currency and tax neutrality, and proportionality in regulation, and these key elements are essential for digital service providers to thrive under their demanding and competitive operational parameters.
“The recently launched digital banking framework by Labuan FSA is an example of the progressive and facilitative stance which prevails in the jurisdiction,” she said. — Bernama
