Image credit: The Star

PETALING JAYA: 2022 will not only be a pivotal recovery year for Malaysia, but also a rare opportunity to reform and future-proof ourselves according to Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.

The Financial Sector Blueprint 2022 to 2026 (FSB) will be critical for the financial sector to navigate the oncoming challenges and opportunities – in turn, complementing the 12th Malaysia Plan (12MP).

“The road ahead will require nothing less than a whole-of-nation approach involving the government, regulators, the private sector, civil society organisations, and the financial community,” said Zafrul in his opening speech for MyFintech Week 2022 and the launch of the FSB held virtually today.

He laid out the key expected outcome of the five-year blueprint. They are advancing digitalisation of the financial sector, providing meaningful choice and access for consumers; and to increase the vibrancy of the funding ecosystem to meet Malaysia’s economic needs.

In addition, it is also expected to spur wider adoption of green finance and sustainability practices.

With the blueprint drawn, the minister exclaimed now it’s time to act.

“In this regard, I urge the financial sector to collaborate with the government in building back better.”

On the FSB, Bank Negara Malaysia (BNM) governor Datuk Nor Shamsiah Mohd Yunus said the financial sector will continue to have a central role in providing solutions to the challenges ahead.

“Be it in bringing about an orderly transition to a greener economy, or helping households and businesses become more resilient to financial shocks in an increasingly dynamic and fast changing economic environment,” she said.

Towards this goal, the central bank has identified five priorities through the formulation of the blueprint.

The first being funding the economic transformation. With the financial sector’s strong foundation Shamsiah believes the industry is well-positioned to play a stronger role in leading transformation and changes at the industry level.

There is also a need to improve the financial well-being of households and businesses by fostering conditions for greater market dynamism to respond to the changing needs of the economy and society.

“This calls for more and diverse actors in the financial system, operating within well-defined parameters that encourage healthy competition and innovation, alongside prudent and responsible conduct,” she elaborated.

In turn, the next priorities identified in the blueprint is to advance digitalisation in the sector; positioning the financial system to facilitate and orderly transition to a greener economy and advancing value-based finance through thought leadership in Islamic finance.

On this issue, Shamsiah said the central bank’s conviction on the purpose of finance is to serve the needs of the real economy, improving lives and livelihoods.

Ultimately, she believes financial services must help people and businesses grow their wealth, engage in trade and commerce, and build resilience. It must help customers manage financial risks and adverse events – including climate and environment related risks to secure lasting prosperity.

“To this end, the blueprint seeks to align the financial sector with the national aspiration to not only become a high value-added and high-income economy, but also lay a solid foundation for a more dynamic, inclusive and sustainable development path.”