Malaysia is a nation of untapped potential for financial inclusion. Its consumers are ready to embrace digital banking. Moreover, unserved groups in Malaysia fall short of conventional bank credit criteria, making digital banking a must. The study will examine Bank Simpanan Nasional’s efforts to fulfill its social mandate and increase access to all communities and rural areas.
The country has integrated financial inclusion as a key part of its economic development plan, the Financial Sector Blueprint, from 2011 to 2020. This blueprint aims to develop domestic financial infrastructure and institutional capacity of domestic intermediaries. It also focuses on addressing the challenges faced by PwDs. It aims to bridge the gap between underserved customers and mainstream banks.
Financial inclusion in Malaysia is defined as providing access to basic financial services and encouraging increased usage of these services. To achieve higher levels, financial inclusion requires extensive retail payments infrastructure, low-cost financial products, and cultural changes. In Malaysia, these challenges are met by policy and industry initiatives. Malaysia’s success is a testament to the efforts of both the government and financial sector over the past two decades.
Bank Negara Malaysia has been working with AFI to create a new financial inclusion index and key performance indicators to help measure progress. Bank Negara Malaysia has partnered with AFI and the Toronto Centre to create a financial inclusion index. It has also collaborated with the AFI to develop a digital bank and co-hosts virtual member trainings on digital banks. This partnership is a key part of the country’s financial inclusion efforts.
The National Financial Inclusion Strategy (NFIS) is the result of a comprehensive process of consultations between government and industry representatives. Its implementation is coordinated through the National Financial Inclusion Committee. This committee includes representatives of government departments, industry organizations, community groups, women’s organizations, youth groups, and credit-only microfinance institutions. It is chaired by the Minister of Finance.
Financial inclusion in Malaysia can be achieved by transforming the banking industry. This transformation will bring about lower servicing costs, increased access to banking services, and greater accessibility to financial products. The country’s financial services industry will also be able to offer a wider range of innovative products and services, and reduce its costs.
The digital banking industry is growing at a rapid rate, and Malaysia is no exception. Online banking has been widely available in Malaysia for several years, but not all services are yet fully available online. To overcome this problem, Bank Negara Malaysia is introducing a new digital banking framework by December 2020. The digital banking framework will allow all services to be conducted online.