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Financial Services Regulation, Innovation, Fintech, and AI in Cambodia: An Emerging Digital Economy

 


Introduction

Cambodia’s financial sector has undergone significant transformation over the past decade, driven by both domestic policy reforms and external technological advancements. As the country strives to modernize its economy, financial innovation has emerged as a crucial enabler of sustainable growth. Key drivers include regulatory modernization, the rise of fintech, and the increasing role of artificial intelligence (AI). In this article, we explore Cambodia’s evolving financial services landscape with a particular focus on regulation, innovation, fintech development, and AI adoption.

The Regulatory Landscape in Cambodia

Financial services regulation in Cambodia is primarily governed by two major institutions:

  • The National Bank of Cambodia (NBC) the central bank responsible for regulating banking, payment systems, and financial stability.

  • The Securities and Exchange Regulator of Cambodia (SERC) overseeing capital markets, securities, and related investment services.

National Bank of Cambodia (NBC)

The NBC has been proactive in updating its regulatory framework to accommodate financial innovation while safeguarding systemic stability. One of the most notable developments has been the implementation of the Bakong payment system, launched in 2020 (NBC, 2020). Bakong is a blockchain-based interbank payment infrastructure that supports real-time payments and facilitates interoperability among commercial banks, microfinance institutions, and mobile payment platforms.

The NBC has also issued several prakas (regulations) related to payment service providers (PSPs), e-wallets, and digital banking licenses (NBC, 2022). These regulations aim to:

  • Ensure consumer protection

  • Enhance financial inclusion

  • Mitigate risks related to money laundering and cybercrime

In addition, the NBC collaborates with international bodies such as the ASEAN Financial Innovation Network (AFIN) to remain aligned with global best practices.

Securities and Exchange Regulator of Cambodia (SERC)

SERC has worked to modernize capital markets by introducing regulations for corporate bond issuance, derivatives, and collective investment schemes (SERC, 2021). The growing interest in fintech-enabled investment platforms has prompted SERC to explore new regulatory measures that ensure transparency, investor protection, and market integrity.

Fintech Innovation in Cambodia

Fintech has played a critical role in expanding financial access in Cambodia, where a significant portion of the population remains unbanked or underbanked.

Growth of Mobile Payments

Cambodia’s fintech ecosystem is heavily centered around mobile payments and digital wallets. Popular providers such as Wing, TrueMoney, and Pi Pay have attracted millions of users by offering fast, convenient, and secure digital payment solutions (Asian Development Bank, 2021).

These platforms have helped bridge the financial inclusion gap, particularly in rural areas where traditional banking infrastructure is limited. According to the World Bank’s Global Findex Database (2021), Cambodia has seen significant growth in mobile financial services usage, making digital finance a critical tool for poverty reduction and economic empowerment.

Cross-Border Innovations

Fintech platforms in Cambodia are increasingly focusing on cross-border remittances, an essential service for the country’s sizable migrant worker population. The Bakong system itself supports cross-border payments with Laos, Malaysia, and Thailand, showcasing Cambodia’s regional leadership in digital financial integration (NBC, 2023).

The Emerging Role of Artificial Intelligence (AI)

While AI adoption in Cambodia’s financial sector is still at an early stage, its potential is increasingly recognized by regulators and industry leaders.

Applications of AI in Cambodian Finance

  • Fraud Detection and Risk Management: Financial institutions are exploring AI-based systems for real-time fraud detection, transaction monitoring, and credit risk scoring.

  • Customer Service and Chatbots: Several banks are piloting AI-powered chatbots to handle customer queries, reduce response times, and improve service efficiency.

  • Credit Scoring for Financial Inclusion: AI models can analyze non-traditional data (e.g., mobile phone usage, utility payments, social media behavior) to generate credit scores for individuals without formal credit histories.

Regulatory Considerations

The NBC has expressed openness to fostering responsible AI innovation but emphasizes the need for:

  • Ethical data usage

  • Consumer protection

  • Transparency in algorithmic decision-making

Cambodia has also begun collaborating with development partners such as UNESCO and the Asian Development Bank (ADB) to explore guidelines for responsible AI adoption in financial services (UNESCO, 2023; ADB, 2022).

Challenges and Opportunities

Challenges

  • Limited technical capacity in AI development and regulation.

  • Cybersecurity threats as digital financial services expand.

  • Data privacy and the absence of a comprehensive data protection law.

  • Financial literacy gaps among the general population.

Opportunities

  • Financial inclusion: AI-powered microfinance and mobile payments can reach previously unserved populations.

  • International partnerships: Cross-border fintech collaborations can drive regional economic integration.

  • Talent development: Institutions like Asia Tech Academy and universities in Phnom Penh are introducing AI and fintech training programs to build local expertise.

Cambodia’s financial services sector stands at the crossroads of innovation and regulation. Through careful policymaking, technological investment, and international collaboration, the country is building a financial system that balances innovation with systemic stability. Fintech and AI present both significant opportunities and regulatory challenges, but with continued efforts, Cambodia is poised to become a digital finance leader within Southeast Asia.

References

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