Malaysian small- and medium-sized enterprises (SMEs) could greatly benefit by adopting blockchain technology in 2020, as the decentralized ledger technology (DLT) allows businesses to become more independent by using a decentralized network while ensuring more transparency for all stakeholders.
A World Bank report from 2017 predicted that the fintech industry in Malaysia will experience rapid growth until the year 2023, according to The Edge Markets.
Initially, Malaysian financial institutions adopted fintech for their operations, but Malaysian SMEs are now also starting to embrace new technology to drive their business.
As over 35% of Malaysia’s gross domestic product is accounted for by SMEs, these local businesses can help boost the nation’s economy by embracing technologies such as blockchain.
With DLT, small businesses can manage their own information security as records are made on a shared database, allowing different parties to access information without relying on a centralized entity to control the data.
Moreover, the immutable characteristic of blockchain means all information stored cannot be amended without alerting other users in the system.
Meanwhile, with blockchain technology, Malaysian SMEs will be able to seek new funds from international investors as blockchain crowdfunding platforms allow potential investors to access necessary information about the project.
Blockchain-powered platforms also allow domestic and overseas transactions to be made with more transparency, thus boosting local businesses that may not have been able to access international clients before the introduction of this technology.
Today, innovation is not only happening among private companies, as organizations such as the Malaysia Digital Economy Corporation and the FinTech Association of Malaysia work with local universities to develop use cases for blockchain and help grow SMEs with this new technology.
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