FinTech and the Future of Finance- Rise of NFTs and BNPL

Prof Dr Nafis Alam, PGCHE, SFHEA

Head, School of Accounting and Finance

Asia Pacific University of Technology and Innovation (APU)

[email protected]

Financial Technology (FinTech) is changing the way people carry out their day-to-day financial services mainly through the use of apps or digital channels designed for their convenience and cost-effectiveness. Such financial apps are often based on mobile phones in the form of “digital wallets” that store credit cards, debit cards, and sometimes account information, thus eliminates the need for cash or checks.  While using the Artificial Intelligence (AI)-powered investment apps, investors have the flexibility to invest anywhere and everywhere. With the emergence of the unheard financial products and services like Non-Fungible Tokens (NFTs), Initial Coin Offerings (ICOs), Embedded Finance, Defi and more recently Buy Now Pay Later (BNPL), FinTech is revolutionising the way we engage with financial services.

Even though FinTech has wide-ranging applications and there is plenty of reading on how FinTech is shaping the financial world, this piece will be more focused on the two hot FinTech products, NFTs and BNPL, which are attracting wide-ranging discourse on their suitability as a financial product and challenges they bring along. I will also share my perspective on why FinTech knowledge and awareness is key for its sustained growth.

A couple of weeks ago, a digital billboard right in front of Lot 10, Kuala Lumpur, showed the image of a pudgy penguin, nothing unique, right? But it was part of the intriguing project which is taking the NFT world by storm. Pudgy Penguins, a collection of 8,888 randomly generated avatar NFTs that sold out in just 19 minutes and generated over 30,753 Ethereum or US$97.6 million (RM403 million) in total sales volume with rarer pieces being sold at 150 Ether (ETH), the cryptocurrency of the Ethereum network. Closer to home, Malaysia’s local graffiti artist and illustrator, Katun managed to gain a total sale of 127.60 ETH for his NFT art collection, equivalent to around RM1.63 million on the day of their release. So what is so cool about NFT and why are there so much hype in the FinTech world? An NFT is a digital asset that represents real-world objects like digital art, drawings, music, in-game items, videos and even a tweet that are bought and sold online, usually with cryptocurrency, and is generally encoded with the same underlying software as many cryptos. For instance, Jack Dorsey, Twitter’s founder and CEO, auctioned his first-ever tweet originally uploaded on 21 March 2006 that read “just setting up my twttr” as an NFT. The tweet was bought using ETH and had a final bid of US$2.9 million (RM11.97 million). Having a digital record, most NFTs are part of the Ethereum blockchain.

As the name suggests, NFTs are non-fungible, meaning they can’t be swapped for something of completely equal value. The value of the NFT lies in its uniqueness and it represents exclusive ownership of a particular digital asset. In a simple term, since NFTs are unique, they have no equivalent value other than what the market is willing to pay for them. NFT can only have one owner and by buying an NFT, the owner purchases the exclusive ownership of a particular digital asset.

The next key questions are, is it worth investing so much money in NFTs? Are they valuable? What will be the future value of those investments? Any crypto investment comes with its challenges and since NFTs are traded in crypto, it follows the same volatile and unpredictable nature of the crypto market. Going with the current hype in cryptocurrencies, NFTs are bound to follow the same interest, but it is difficult to predict the future value of NFTs. Since NFTs will be tagged to the value of ETH or related cryptocurrencies, their value will be attached to the highs and lows of the crypto and the future popularity of the digital assets. Another challenge in buying an NFT is confirming the authenticity of the underlying token itself. As NFTs are completely being sold online, it might be the case where counterfeit digital art can be sold for the price of the original item. Tax authorities are also yet to allocate preferential tax treatment to NFTs as same as some preferred stocks. The overall gains from trading in NFTs might not be that advantageous unless anyone has plenty of funds to spend on acquiring collectibles.

Overall, investing in NFTs is a fad among crypto enthusiasts and a race to hoard some priceless digital tokens but it is too early to prove if NFTs can be considered a valuable investment and we need some time to prove their worth.

Another popular FinTech segment that is becoming a big hit among millennials is the Buy Now Pay Later (BNPL), which is a short-term financing option that allows customers to make purchases without having to pay the full amount upfront. Customers might pay a small fraction of the total cost upfront (ranging between 10% and 25%) while the balance must be paid weekly, bi-weekly, monthly or any other predetermined payment schedule. BNPL has its own fan base with both millennials and Gen Z consumers are attracted to its no-frill and instalment-based payment system. With limited or poor credit history, BNPL has emerged as one of the popular financing options available especially during the COVID-19-induced eCommerce boom. With the euphoria for BNPL, the global BNPL market which was only US$4.07 billion in 2020, is expected to reach US$20.40 billion by 2028, registering a CAGR of 22.4% from 2021 to 2028.

Initially pressed as a solution to increase the financial inclusion for credit card deprived consumers, BNPL is starting to emerge as a new debt trap for young professionals who do not have or don’t want to have a traditional credit card with high-interest rates. Trendy lifestyle, social media influence, easy availability of credit and no interest rate charged by BNPL providers are fuelling the rise of its popularity among young consumers. Due to less stringent credit checks and onboarding requirements by platforms, it is easier for customers to rack up debt by spending the money which they don’t have and often leading to overspending. Not only is BNPL adding debt pressure, but the non-payment of pre-determined instalment plans is also eating up the potential credit score.

Even though in Malaysia, BNPL usage is way behind countries such as in the US, China, Australia, its attractiveness is soon going to catch up, making it a popular FinTech segment in the country. Pine Lab, one of the leading BNPL platforms, has already onboarded leading merchants as well as banks like CIMB Bank, AmBank and RHB Bank on its platform. An interesting feature of BNPL is that it is largely an unregulated business for anyone and everyone to join, both from the provider and users perspective. Regulating BNPL platforms is crucial for both business continuity and consumer protection in addition to not creating an ecosystem of easy personal financing which could lead to defaults and financial uncertainties. From a FinTech viewpoint, huge defaults from BNPL users can also adversely impact platform survival in the long run.

It is clear that while FinTech does provide new and innovative ways of investment (NFT) and financing (BNPL), the education and awareness of FinTech concepts is key for the booming financial services industry. Educating young Malaysians about FinTech should be the utmost priority of the higher education sector which should include courses on data-driven financial analysis, application of Machine Learning and AI in financial decision making, application of blockchain in financial services, usage of digital assets and alternative finance. At the same time, a fast-growing FinTech industry requires talents that are equipped with financial skills, digital skills, and data analytics skills for them to stay through new roles such as FinTech specialists and business data analysts within the industry. The Private Higher Education Institution (IPTS) has been slow to offer FinTech programmes with only a few universities offering such courses. Asia Pacific University of Technology and Innovation (APU) understood the importance of FinTech knowledge for Finance graduates and was the first university in the country to offer both undergraduate and postgraduate FinTech programmes. More recently with the likes of Taylors have also ventured into offering FinTech related programmes. Some universities both public and private are incorporating the FinTech module in their Finance programmes.

APU also became the first and only university to sign a pact with the FinTech Association of Malaysia (FAOM) in March 2020. This new partnership opened a whole window of opportunities as APU’s FinTech students are exposed to career and internship opportunities with FAOM members, which include leading banks, financial institutions and FinTech platforms. Industry experts from FAOM are also providing inputs in enhancing the programme comprising key areas of FinTech, namely digital currencies, blockchain technologies, crowdfunding, Robo-advisory and entrepreneurial finance. For a vibrant FinTech ecosystem, IPTS must work closely with the FinTech industry players and development agencies like Malaysia Digital Economy Corporation (MDEC) to create awareness and knowledge transfer among Malaysians as well as to produce the next generation of FinTech experts and founders. FinTech knowledge is becoming an important aspect of education for the digital age as the increased sophistication of FinTech products and services (like NFTs and BNPL) need more awareness among the customers. In addition to being aware of these innovative financial products, users should also be able to compare the pros and cons of each available product.

In conclusion, FinTech is not only the future of finance, it’s already here and it will transform the way we transact and interact with the financial world. Education and awareness is the key for sustained growth of the FinTech ecosystem.

Author Profile

Dr Nafis is currently working as a Professor of Finance and Head of School of Accounting and Finance at Asia Pacific University of Technology and Innovation (APU). He previously served as an Associate Professor of Finance at Henley Business School Malaysia, University of Reading Malaysia and at Nottingham University Business School (NUBS) in the University of Nottingham Malaysia Campus (UNMC). He is also a research affiliate of Cambridge Centre for Alternative Finance (CCAF) at Judge Business School, University of Cambridge and contributes to global reports on Fintech, Alternative Finance and Fintech Regulation.

He has published over 40 peer-reviewed in leading journals including The World Economy, Emerging Markets Review, Pacific-Basin Finance Journal, Journal of Asset Management, Journal of Banking Regulation, Review of Islamic Economics and Journal of Financial Services Marketing among others. He has also co-authored nine books and numerous book chapters on Fintech and Islamic Finance. As a frequent traveller, he has given lectures on finance and Islamic finance across the world, including Harvard Islamic Finance Forum at Harvard Law School; a Gulf Research Meeting at Cambridge University, UK; Durham University Summer School; Seoul International Finance Conference (SIFIC); World Islamic Economic Forum (WIEF); OIC Asia Trade and Economic Forum, Central bank of Turkey among others.

Dr Nafis has served as a visiting Professor/Associate Professor at various universities in the UK and Indonesia. He was featured as a Professor of the Month by Financial Times (FT) in 2014 and received an award for Upcoming Personality in Islamic Finance in 2016 presented by Global Islamic Finance Awards (GIFA) and hosted by the Indonesian government. He is an avid writer and contributes regularly to mainstream newspapers, economic forums and professional outlets like WEF, Huffington Post, The Edge, The Conversation among others.  He is among the world top 100 influencers in Fintech and top 5 amongst Regtech influencers. He can be followed at 

Deq on Deck: United For Digital Sovereignty

Assalamualaikum Warahmatullahi Ta’ala Wabarakatuh and Salam Sejahtera,


You may have heard of the term ‘Digital Sovereignty’. It is the idea of having control over our own digital destiny through the data, hardware, and software that we create, share and rely on.

On a policy-making level, digital sovereignty is an important aspect to consider, as there is a growing concern that too much digital control is ceded to too few places, in a tech market that has too little choices.

By upholding digital sovereignty and integrating technology with society, we can chart our digital course on our own terms. More importantly, we can frame policies on digital use, consumption and investment that will drive inclusivity, sustainability, and shared prosperity.

We can better our nation, lower the income gap, democratise digital access and opportunities for all Malaysians.

It is easy to be driving progress for progress’s sake, forgetting that progress should ultimately benefit the people. Serving the Rakyat is our primary mandate – an aspect that I am sure we always keep in mind.  

On 6 September, MDEC was graced with an official working visit by Communications and Multimedia Minister YB Tan Sri Datuk Seri Panglima TPr Annuar Haji Musa. Our discussions with him and the Ministry not only gave us the opportunity to align our vision and mission with the government and policymakers, but also to reiterate our focus–that we, as a whole, serve the interests of the Rakyat.

It begins with our own self-improvement. YBM reiterated for MDEC to be positioned as the leading agency for Malaysia and ASEAN’s digital economy and aspires for us to improve our internal processes to emerge as a high-performance agency.

There is no doubt that this is what we will be striving for moving forward, as we re-emphasise our focus towards driving positive impact to the people.

Throughout the week, I have been able to connect and continue to seek deeper collaboration with digital economy stakeholders.

I also had the opportunity to meet with Dato’ Azmar Talib, CEO of Tun Razak Exchange (TRX). We had a great discussion on MDEC’s investment promotion activities to support TRX and Bandar Malaysia.

Our recently announced DIF5 strategy allows us to focus on bringing digital investments and sustainable ecosystem development programmes in both Islamic Digital Economy and FinTech–two segments crucial to the development of the economy and the expansion of financial access across the country.

Last week also ended on a good note. By the good graces of the Prime Minister and the Malaysian government, the creative industry is allowed to resume operations from 9 September.

This is a tremendous step towards national recovery, and a relief to more than 19,000 companies in the industry. MDEC has been doing our best to bolster this important segment throughout the pandemic, with initiatives that include the Digital Content Creators Challenge and the Digital Content Grant.

Now it is time for us to redouble our support and help them overcome the rocky terrain as they reopen during an ongoing pandemic.

Digital Sovereignty is something Malaysia must build and uphold for ourselves. To do so, we need to empower the people to take that step with us through the right tools, access, and support.

We need to stand #DigitalUnited.

Yours, Mahadhir @ maDEQ


Assalamualaikum Warahmatullahi Ta’ala Wabarakatuh and Salam Sejahtera,


This has been my first (short) week at MDEC, and it has been an eventful one at that. My week was filled with several important visits to the Ministry of Finance and the Ministry of Communications and Multimedia.

My courtesy visit to YBhg. Dato’ Sri Mohammad Mentek, KSU of KKMM & Board Member of MDEC, on my 1st day on the job was filled with amanat and a list of priorities to be addressed.

I also paid a courtesy visit to YBhg. Dato’ Asri Hamidon, Secretary General of Treasury and the Director of Agensi Pelaksanaan Ekonomi Dan Koordinasi Strategik Nasional (LAKSANA) of MoF, YBhg. Dato Shahrul Nazri Abdul Rahim at the Ministry of Finance.

I was invited to the inaugural meeting of the Consultative Council on Foreign Policy chaired by YB Dato’ Saifuddin Abdullah, the Minister of Foreign Affairs, and I am certainly looking forward to the role MDEC will playing in contributing to the Council’s output.

In the weeks to come, I will continue to engage with more industry stakeholders and Government officials to listen and discuss how we can achieve the objectives in MyDIGITAL together.

I plan to strengthen collaborations with other digital ecosystem drivers, including the Malaysian Investment Development Authority (MIDA) through the Digital Investment Office (DIO) to continue supporting investments in our digital economy.

It is equally important that I say how privileged I am to be given the opportunity to work alongside the experienced and passionate MDEC team, made even more meaningful as MDEC marks its 25th anniversary Silver Jubilee year.

For 25 years, MDEC has indisputably affected change in the ICT and digital ecosystem of Malaysia. For me, MDEC has always represented the way forward, not just for the digital economy and tech industry, but also for the nation.

While the pandemic has certainly posed a challenge, I have witnessed the resilience and determination that my new colleagues have exhibited to ensure progress is achieved. The digital movement is sweeping swiftly across the country, and I believe that our experience, innovation, and ability to execute will enable us to be at the forefront of this movement.

Change can be unsettling, but in change, lies opportunities. We must be clear on delivering the best possible experience for our industry, investors and our people, by keeping it simple and customer-focused.

I commit to always communicate openly and transparently and I’d like to encourage everyone to do the same. I want to hear your thoughts and ideas. I want to hear what you think, what we could do differently and better.

This has not been an easy time for our families and businesses. The landscape is changing faster than ever. There are key issues around health, income, and mental wellbeing. We can address this with a digital approach, and with urgency.

MDEC is driven by great people with proven expertise. I am confident that together, with all our stakeholders and partners, we will succeed in establishing Malaysia as the Heart of Digital ASEAN. In closing, I also want to pay tribute to all my predecessors over the past 25 years who have contributed towards the success of MDEC. A united team can most definitely turn any dream into a reality. 

I look forward to connecting with all of you in due time, perhaps over food or sports – my passions!

Till then, stay safe and let’s all do our part to build a better Malaysia together. 


Mahadhir @ maDEQ

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