Session 1: Challenges & Opportunities: Emerging Frameworks for

Financial Consumer Protection & Education in Asia

Malaysia’s Experience

Arlina Ariff

Director, LINK & Regional Offices Department

Bank Negara Malaysia

13 December 2012

HKMA-SFC-OECD ASIAN SEMINAR

“Evolution of Financial Consumer Protection &

Education in Asia”

13 – 14 December 2012, Hong Kong

The Financial Consumer Protection Policy in Malaysia is

based on the objective of “fair treatment of consumers”

Desired outcomes for consumer protection framework:

fair dealings & fair treatment of consumers

enhanced informed participation in the financial

system by consumers

sustained public confidence & trust in the financial

system

Foundation for financial consumer protection framework in

Malaysia

2

Consumer protection initiatives in Malaysia support bigger

national objectives

→ participation by more informed

consumers

→ strengthen the position of consumers

through increased financial

competence

→ improve domestic consumption as a

real driver of growth

→ enable widespread access

→ enable underserved

communities to avail

themselves to financial

services

→ Better financial intermediation

→ ensuring responsible

business conduct

→ ensure availability of basic

financial products

→ rise of more prudent

financial management

→ greater demands for

financial services

→ more active consumerism

is envisaged to have a

pivotal role in driving

efficiency in the financial

services industry

→ greater demands for better

financial services

→ sustained & holistic

development of industry

3

Institutional set up for financial consumer protection

Set strategic

direction for

financial

education

Ensure

responsible

business

conduct

Ensure

availability of

basic

financial

products

Effective

disclosure

regime

Financial

education for

adults

Financial

counselling

Debt

management

programme

Advisory &

redress @

BNM

Advisory &

redress @

industry

Deposit

insurance

scheme

Alternative

dispute

settlement

mechanism

BNM AKPK FMB PIDM Financial services providers & Industry Associations

4

5

Bank Negara Malaysia drives financial education initiatives at the national level

Formulation of policies & setting strategic direction

Financial sector Master Plan 2001 – 2010 &

Financial Sector Blueprint 2011 – 2020

Defining roles of BNM, industry associations, other

agencies

Setting strategic direction

Integration into school curriculum; School adoption

programme; school financial club; adult education

via AKPK (Credit Counseling and Debt

Management Agency)

Identification of target groups and priority areas

E.g. school children; youths, lower income

households; teachers; rural communities.

5

Financial education strategies have evolved from information dissemination to a multi-pronged and targeted initiatives

When first launched in 2003, materials and information were

disseminated through websites and printed materials

Now, usage of more timely, interactive and speedy financial

education delivery tools.

SMS blast on consumer alerts

Targeted outreach programmes nationwide (including mobile

LINK)

Financial education and counseling to borrowers in financial

distress

More interactive web-based financial education efforts:

• bankinginfo; insuranceinfo; and islamicfinanceinfo

• consumer information and alerts via social networking service

e.g. facebook

6

Financial education is pursued to inculcate basic financial management as an essential life skill from an early age

BNM leverages on strategic partnership with the

relevant ministries, industry associations and

financial service providers

Financial education programmes for adults are

targeted to address specific risks and vulnerable

target segments

7

Enabling infrastructure to support financial

education initiatives are being strengthened for

more effective implementation

insuranceinfo - 25

booklets published. Also

provides car premium

calculator, consumer

checklists, etc.

bankinginfo - 26 booklets

published. Also provides

budget calculator, financial

calculator, comparative

tables, etc.

islamicfinanceinfo - info on

Islamic banking

and takaful products and

services, concepts, principles

and tools to manage finances

8

Credit Counseling And Debt

Management Agency

www.akpk.org.my

Financial Mediation Bureau

www.fmb.org.my

www.smeinfo.com.my

Contact details on

BNM’s website

Complaints

Unit @ FSPs

Small Debt

Resolution

Scheme

SME Special Units

at FSPs & BNM –

assist SMEs on

financing

Avenues to seek redress

and help

ABM Connect

LINK and Regional Offices

• BNMLINK

• BNMTELELINK, SMS

15888

• MOBILE LINK

• Complaints Management

and Advisory

The Association of

Banks in Malaysia

• www.abm.org.my

• eABM Connect

• Toll Free Helpline

A unit within BNM

Implementation of financial consumer protection & education

strategies done through multiple channels

LINK & Regional

Offices

9

http://www.fmb.org.my/index.htm

Resolution & Mediation Roles

1

Public

Interface

Channels

LINK & Regional Offices Consumer Protection Framework

Collaborators

Desired

Outcomes

i. Retail banking

ii. Insurance &

Takaful

iii. SME issues

i. Fees & Charges

ii. Misrepresentation

iii. Fair debt collection

iv. Responsible

financing

v. Transparency &

disclosure

i. Illegal deposit

taking

ii. Illegal forex scam

iii. Internet Scam

i. Illegal deposit taking

& investment scam

ii. Managing debts

iii. Basic banking &

insurance services

iv. Access to financing

• Consumer Market Conduct

Dept.

• Dev. Financial Enterprise

Dept.

• Supervision Department

• Financial Institutions

• NGOs

• Enforcement Agencies

• Media

• Special Investigation Unit

• Financial Intelligence Unit

• Financial Surveillance

Dept.

• Government Agencies

• SME Corp

• AKPK

Internal External

Business Conduct

Financial Surveillance

Financial Inclusion, Education & Promotion

2 3 4

Effective Policy Formulation & Implementation

Effective Enforcement &

Supervisory Action

Heighten Financial Inclusion

Responsible Usage &

Investment High Satisfaction

10

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Expanded channels to provide greater outreach

BNMLINK One-stop reference point for walk-in visitors

BNM

TELELINK

Engagement

via

telephone,

e-mail,

official

forms, letter

or

fax

Integrated

Contact

Centre

(ICC)

Comprehensive

customer

service

provided by

BNMLINK,

BNMTELELINK

and Consumer

Redress &

Advisory Unit

for banking,

insurance and

SMEs

2005

Mobile

LINK

counter

Expanded

outreach

• LINK & ROs

Dept Strengthened

presence at regional level

– effective execution of the Bank’ strategic mandate

• Mobile LINK

coach launch Greater

outreach to underserved communities for financial inclusion

• BNM LINK at

6 BNM

branches

• SMS Service

Complement

existing

channels

11

2007 2008 2009 2010 2011 2012

• Social Media

via Facebook &

Twitter

complement

existing channels

• Mobile LINK

Coach

Deployment

Heighten

financial

inclusion at

underserved

communities

Innovative outreach channel… Mobile LINK

• An innovative channel to achieve greater outreach in serving communities of semi-urban and rural areas

• Mobile LINK Coach was launched on 9 Dec 2011

• Terminals in coach are connected to credit reports, Consumer Redress Mechanism System (CRMS) and BNM’s website

(As at 28 September 2012)

No. of districts covered 26

No. of mukim covered 35

Total participants 13,175

Take-up rate for financial services 21%

(RM5 mil)

12

0

20

40

60

80

100

120

140

160

180

200

2005 2006 2007 2008 2009 2010 2011 2012

LINK

TeleLINK

Mobile LINK

CMA

• Between 2008 and 2012( Jan-Sept), cases for redress had increased by 130% (from 133,439 to

307,356)

• Expect to increase further since Mobile LINK is now fully operational

• In 2012 (Jan-Sept), total daily average of engagements: 1,607 through various channels

LINK : 973 engagements/issues

TeleLINK : 598 engagements/issues

Consumer Redress & Advisory (CRA): 36 engagements/issues

• Since the inception in Nov 2010 until Sept 2012, Mobile LINK had attended to 16,218 customers.

Total consumer engagements (‘000)

Services rendered by BNM… more than 1 mil financial consumers over years…

13

Thank you

BANK NEGARA MALAYSIA CENTRAL BANK OF MALAYSIA