BNM Raises Compliance Bar for FinTech E-Wallets

August 8, 2025 • FinTech News
BNM Raises Compliance Bar for FinTech E-Wallets

Stricter Requirements for Fintech Sector

Malaysia’s central bank (BNM) has released new draft rules effective January 2025, significantly strengthening anti-money laundering (AML) and counter-terrorism financing (CFT) requirements for e-money providers. The updated framework raises compliance standards for e-wallets and fintech firms, focusing on four key areas:

Enhanced Customer Checks

  • Stricter identity verification for all users

  • Mandatory screening against global sanctions lists

  • Continuous monitoring for high-risk customers (PEPs, large businesses)

  • Automated tools required to replace error-prone manual processes

Real-Time Transaction Monitoring

E-money issuers must now:
✅ Detect unusual activity using AI or rules-based systems
✅ Flag mismatched behavior versus customer profiles
✅ Exempt limited-use products (e.g., gift cards)
✅ Apply stricter rules for “Eligible EMIs” with higher capital requirements

Stronger Governance Demands

Firms must demonstrate:

  • Board-level oversight of compliance programs

  • Dedicated compliance officers

  • Regular audits and training

  • Documented controls for license retention

Why This Matters Now

The changes follow recent enforcement actions, including:

  • RM600,000 fine against TNG Digital (2023)

  • Growing e-money usage across Malaysia

  • Increased regulatory focus on financial crime prevention

Technology Solutions Emerge as Essential

BNM explicitly discourages manual compliance, urging adoption of modern tools like Flagright’s AI platform which offers:

  • Real-time transaction monitoring

  • Automated sanctions screening

  • Dynamic risk scoring

  • No-code rule adjustments

Industry Impact and Deadlines

Financial institutions must:

  1. Review systems by Q3 2024

  2. Implement changes before January 2025 deadline

  3. Prioritize tech investment to avoid penalties

Non-compliance risks:

  • Hefty fines

  • License suspension

  • Reputational damage

The Bigger Picture

BNM’s move signals that compliance is now competitive advantage in Malaysia’s fintech sector. Firms that modernize quickly will gain trust and market share in Southeast Asia’s rapidly growing digital payments landscape.