Good morning, esteemed speakers, ladies and gentlemen.

Assalamualaikum and a very good morning to all.

1. Fintech is no longer at the edge of finance. Increasingly, it is becoming part of the architecture of finance itself. Over the past decade, digital technology and new business models have reshaped how financial services are delivered and accessed. Digital technologies now support a wide range of financial activities, from payments and customer onboarding to investment management, insurance, fundraising, compliance and risk monitoring.

2. This transformation is being accelerated by increasing digital consumerism with preference for convenient access to innovative financial solutions at a click. The rise of neobanks further illustrates this shift, with digital-first models widening access, lowering costs and supporting financial inclusion, particularly for traditionally underserved segments.

3. At the same time, fintech is moving beyond individual applications towards greater technological convergence. AI, digital assets, tokenisation and programmable finance are increasingly developing together - changing how value is moved, managed and accessed. As these technologies mature — they can also make cross-border transactions more seamless, connecting businesses, investors and markets across jurisdictions with greater speed and efficiency.

4. Across Asia, where economic and financial linkages continue to deepen, these developments are reshaping cross-border capital mobilisation and connecting businesses with opportunities across markets. This supports more inclusive participation in the region’s economic growth.

• According to KPMG’s Pulse of Fintech, fintech companies in Asia-Pacific attracted US$9.3 billion across 763 deals in 2025; and
• In the first half of 2026, the region recorded a further US$4.6 billion across 350 deals.

5. These figures indicate the scale of fintech activity across Asia Pacific. But the bigger story is how technology is increasingly becoming embedded in the region’s financial architecture — creating opportunities for greater connectivity, inclusion and cross-border participation.

6. As financial services become increasingly technology-driven and interconnected, innovation also changes the risk landscape. New delivery models can create new vulnerabilities, while familiar risks can take on different dimensions and transmit more quickly across institutions and jurisdictions. Our task is therefore to enable progress without allowing undue risk, to undermine investor confidence, market integrity or trust.

Ladies and Gentlemen,

7. Technology, in particular, requires a new vigilance. As financial services become more digital and sophisticated, regulators must remain alert to emerging vulnerabilities, including cybersecurity threats, operational disruptions, data protection concerns and the potential misuse of new technologies for financial crime. We must look beyond the technology itself to understand the business models it enables, the risks it creates and its implications for the wider financial system, while ensuring that appropriate safeguards keep pace with innovation. The objective is not to constrain technological progress. Innovation should neither be resisted simply because it is new, nor accepted unconditionally because it promises greater efficiency. Rather, it should be allowed to develop responsibly, resiliently and in a way that sustains confidence in the financial system.

8. This raises important questions for regulators. How should regulation respond when financial services are delivered through new technologies or business models? How do we address existing safeguards without creating unnecessary barriers to innovation? And how do we address risks that increasingly cross traditional regulatory and jurisdictional boundaries? These questions matter even more as Asia’s financial markets become increasingly connected and digital activity moves more easily across borders.

9. The answer is not to create a separate rulebook for every new technology. Regulation must evolve with the market and focus on the nature and scale of the activity, the risks involved and the potential impact on consumers or investors and the wider financial system. A proportionate and risk-based approach can provide appropriate safeguards while giving responsible innovation room.

10. It is against this backdrop that Labuan IBFC has developed its digital financial ecosystem — providing space for innovation while maintaining appropriate regulatory safeguards.

Ladies and Gentlemen,

The Labuan IBFC Digital Frontier

11. Labuan IBFC’s digital journey began almost a decade ago, in 2017. Since then, an early foray into digital finance, has grown into a broader segment of the Centre’s financial ecosystem, mirroring the acceleration of digital finance across Asia. New business models have entered the Centre, reinforcing the need to pair innovation with sound governance, safeguards and risk management.

12. For us, that balance is essential — to maintain market confidence, support sustainable growth and ensure that innovation contributes meaningfully to the wider financial ecosystem.

13. This balanced approach is reflected in how Labuan IBFC facilitates digital financial businesses. Rather than relying solely on conventional regulatory sandboxes, Labuan IBFC adopts a more flexible and market-oriented approach through a regulatory “toolbox”. Innovative solutions can be considered within existing business and licensing frameworks, with conditions and safeguards calibrated to the nature and risks of the proposed activity.

14. This does not mean relaxing standards. Expectations on governance, consumer protection, market conduct and financial integrity remain clear.

Esteemed Guests,

15. Digital financial services in Labuan IBFC now encompass a wide array of financial offerings, ranging from e-platforms for trading fiat and digital currencies to more complex activities, including digital asset exchanges and blockchain-based tokenisation for fundraising.

16. Within this broader digital proposition, the Islamic Digital Asset Centre, or IDAC, represents an important strategic digital initiative for Labuan IBFC. One of IDAC’s principal propositions is the development of Shariah-compliant securities tokens, known as RAMZ. Through tokenisation, eligible Shariah-compliant assets such as securities, sukuk and real-world assets can potentially be structured into digital units, facilitating fractional participation, transparent records of ownership and access to regulated trading infrastructure. The current IDAC ecosystem also includes a Shariah and ESG-compliant digital asset exchange, an Islamic digital bank regulatory sandbox, and initiatives involving social-finance applications such as zakat, waqf and Hajj-related services.

17. These propositions demonstrate that digital innovation and Islamic finance need not develop on separate tracks. The principles of transparency, responsible ownership, asset-backing and ethical conduct can complement the capabilities of blockchain and programmable finance.

Regulating Risks, Not Merely Technologies

18. Recognising the need for regulatory approaches to remain sufficiently agile, Labuan FSA adopts a phase approach to digital financial regulations. This is to enable priority areas to be addressed progressively, while giving due attention to risks that could affect the stability and orderly development of the Centre’s digital financial services sector.

19. More importantly, regulation should focus not only on the technology being used, but on the risks created by the underlying activity. This is why technology-neutral and outcomes-focused regulation is important. Activities presenting equivalent risks should receive equivalent regulatory attention, irrespective of the technological platform or terminology used. The nature and intensity of the regulatory response should take into account the size, complexity, interconnectedness and potential impact of the activity concerned. Achieving consistent regulatory outcomes does not necessarily require an identical response to every institution or business model. What matters is that the regulatory response remains commensurate with the nature and level of risk involved.

20. In a nutshell, to remain relevant, a financial centre must provide-

• certainty without becoming too rigid,
• flexibility without compromising standards, and
• speed without sacrificing scrutiny.

This balance underpins Labuan FSA’s regulatory approach. It enables us to assess innovative business models within clearly defined parameters, while recognising that technology and market practices can evolve faster than conventional rulemaking cycles.

Ladies and Gentlemen,

21. As digital finance expands, scrutiny of digital financial crimes and regulatory enforcements is also intensifying. Regulators increasingly focus on outcomes — whether risks are understood, controls are effective, and red flags are escalated early. This is especially important in sanctions compliance and beneficial ownership, where institutions must screen exposures continuously, look beyond legal structures, and assess whether arrangements make real commercial sense. Technology - from AI and RegTech to blockchain analytics can strengthen detection, but it must support, not replace, the sound judgement of compliance officers.

22. Our objective is clear. Labuan IBFC’s strength rests not only on efficiency and flexibility, but on credibility. Trust is what sustains an IBFC — trust in its laws, regulations, institutions and financial flows. Labuan IBFC is therefore not about light-touch compliance, but proportionate, risk-based and internationally aligned compliance. In short, not LIGHT-touch regulation, but RIGHT-touch regulation — enabling legitimate business to grow while keeping the system trusted.

23. Malaysia’s 2025 mutual evaluation by FATF provides a useful and credible reference point. It highlighted the strengthening of Malaysia’s legal framework and supervisory approaches since the previous assessment and recognised the country’s, including Labuan’s robust framework, for supervising financial institutions and virtual asset service providers.

24. We are not resting on our laurels. We continue to strengthen supervisory capability and regulatory implementation, including through the Supervisory Intelligence System, or SIS - a standardised platform for managing regulatory applications and submissions, including compliance, audit, AML/CFT, Shariah and e-KYC-related reports. This reflects the wider usage of technology in strengthen data governance, regulatory reporting and supervisory effectiveness.

25. Capability building and cross-border regulatory cooperation are equally important. We will continue to engage financial institutions, fintech companies and professionals to understand emerging technologies, business models and associated risks. At the same time, closer cooperation among regulators is essential to support timely information sharing, supervisory coordination and consistent implementation of international standards, while reducing opportunities for regulatory arbitrage.

Conclusion

26. The financial frontier will continue to move — driven by AI, digital assets and business models we may not yet fully anticipate. Our task as regulator is not to stand in front of that frontier, nor simply follow behind it. It is to help shape the conditions in which innovation can move forward responsibly.

27. For Labuan IBFC, that means remaining open to innovation, firm on integrity, flexible in approach and clear in expectation. Ultimately, technology may change how finance is delivered — but trust will remain the currency on which finance depends.

On that note, I wish all of you a productive and insightful Asia Fintech Forum 2026.

Thank you.