06/08/2025

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WEDNESDAY | AUG 6, 2025

M’sia eyes high-quality, high-value investments

Financial service providers increasingly adopting AI: Survey KUALA LUMPUR: Financial service providers in Malaysia are increasingly adopting artificial intelligence (AI), the central bank’s AI Survey 2024 shows. The survey found that in 2024, 71% of banking institutions and development financial institutions, and 77% of insurance and takaful operators had implemented at least one AI application. “Notably, in 2024, 71% of banking institutions and DFIs had implemented at least one AI application, an increase from 56% in the previous year. Similarly, 77% of ITOs had adopted at least one AI application, compared to 58% in the previous year,” according to Bank Negara Malaysia’s (BNM) discussion paper on Artificial Intelligence in the Malaysian Financial Sector yesterday. BNM said over 60% of banking institutions and insurers view AI as a strategic priority over the next one to three years. “This trend looks set to continue in the coming years, as over half of the respondents agreed that AI has the potential to generate significant new value for both their organisations and consumers.” The central bank stressed it remains vigilant to developments in AI and closely monitors its usage across financial service providers. “As AI technologies and the state of adoption in financial service providers continue to grow and evolve, we recognise that AI use may introduce new risks that are not adequately addressed by the existing regulatory framework.” BNM said an escalation in supervisory focus may be considered if AI-related risks become more material, in line with the principles of parity, proportionality, and neutrality. “For example, due to widespread use of AI applications in critical functions or to replace human decision making. Where relevant, we may explore the need to introduce new regulatory expectations should the need arise in the future,” it said. The central bank said it closely monitors five technological developments and innovation in the financial sector to shape its future regulatory and supervisory approach on AI. The discussion paper seeks to share and obtain feedback on BNM’s posture on responsible AI innovation in the financial sector; the proposed regulatory approach for AI, as well as industry guidelines on responsible use; and general development approach including priority areas for greater innovation and industry-led collaboration. BNM said it aims to facilitate and encourage responsible adoption and use of AI across the financial sector in a manner that will advance better consumer outcomes and its broader policy objectives. The central bank interviewed select local financial industry players throughout 2024 and issued an updated industry-wide survey which received responses from 1,207 financial service providers.

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

o Country strengthens position, channels focus to sectors that will shape the future, such as AI, semiconductors and RE

KUALA LUMPUR: Malaysia is strengthening its position as a premier destination for high quality, high-value investments in Southeast Asia under the 13th Malaysia Plan (13MP or RMK13), said Finance Minister II Datuk Seri Amir Hamzah Azizan. He said Malaysia is channelling its focus to sectors that will shape the future such as artificial intelligence (AI), semiconductors and renewable energy to drive this ambition. “These industries are not just growth drivers; they are the building blocks of a resilient, future-ready economy,” he said in his speech at MyFintech Week 2025 yesterday. Amir Hamzah said Malaysia is also accelerating the development of other in dustries, revitalising the global services sector and enhancing retail and logistics efficiency. “We are also breathing new life into our creative economy, or ‘orange economy,’ by promoting high-value local content rooted in Malaysia’s rich art, culture and heritage,” he added. Malaysia must strengthen its capabilities and rethink strategies to stay competitive amid global uncertainty and domestic challenges, Amir Hamzah said. “To navigate this, we must strengthen our core capabilities and boldly reinvent strategies to stay ahead.” Amir Hamzah said Malaysia’s financial sector has made commendable strides over the decades. “Most recently, under the Financial Sector Blueprint 2022-2026, it has strengthened its foundations, broadened access, and em braced digital transformation.” He said Malaysia’s financial sector now contributes meaningfully not only to gross domestic product (GDP), but to national development outcomes, from SME financing and Islamic finance leadership to digital payments and social protection mechanisms. “Yet, progress must continue. Under RMK13, the financial sector is identified and recognised as one of seventeen high growth, high-value and high-impact strategic sectors that will support enhanced economic di versity.” In doing so, Amir Hamzah said, the

Amir Hamzah (centre) after the launch of MyFintech Week at Sasana Kijang yesterday. Also present are Bank Negara Malaysia governor Datuk Seri Abdul Rasheed Ghaffour (second, left), Securities Commission Malaysia executive chairman Datuk Mohammad Faiz Azmi (second, right), AICB chairman Tan Sri Azman Hashim (left) and Fintech Association of Malaysia president Anil Singh Gill (right). – BERNAMAPIC

2030 (above RM600 billion in 2024), driven by the National Semiconductor Strategy to attract multinational corporations, develop local firms, drive investments, research and development and skills development. To support the digital economy, the government aims to achieve 98% 5G coverage across populated, industrial and rural areas. It also plans to digitise public services by rolling out MyDigital ID and offering 95% of federal public services online. The 13MP targets 35% renewables by 2030 via a new electricity market, energy storage systems, smart grids, inter-region integration, green hydrogen and the exploration of nuclear through the National Energy Transition Roadmap (NETR). The plan aims for 35% renewables by 2030 via a new electricity market, energy storage systems, smart grids, interregion integration, green hydrogen and the exploration of nuclear through the NETR.

financial system must evolve as a catalyst for Malaysia’s transition to a value-creation based economy, by fostering a culture of innovation. “Turning the aspirations of RMK13 into reality will require unwavering commitment, innovative policies, and close cooperation across all sectors of society.” The government unveiled the 13MP on July 31, setting the course for the next five years. In the 13MP, RM611 billion worth of investments are earmarked for the country, with over a third (RM227 billion) allocated to boost economic sectors. Government-linked investment companies and government linked companieswill allocate RM120 billion to support this initiative. The government will develop an AI-driven ecosystem through the National AI Action Plan 2030 to drive talent development, research and technology commercialisation to support AI adoption. It targets RM1 trillion in electrical and electronic product exports by

BNM preparing regulatory groundwork for tech-driven financial industry KUALA LUMPUR: Bank Negara Malaysia (BNM) is developing regulatory groundwork for three emerging technologies – artificial intelligence, open finance and asset tokenisation – to ensure innovation in the financial sector is responsible, inclusive and trusted. preserve financial stability and public trust.” At the same time, he emphasised that the central bank remains open to innovation that brings genuine value to the economy and supports productive use cases. year, it will issue an exposure draft on open finance to set out the central bank’s vision for a data-driven and customer-permissioned data sharing ecosystem. governor said that as Malaysia approaches the final phase of the Financial Sector Blueprint 2022-2026, BNM and the Securities Commission have begun work on the next phase.

“BNM and the Securities Commission have begun work on a new set of priorities and strategies beyond 2026,” he said, adding that BNM is working closely with the SC to align their visions, recognising that Malaysia’s financial future must be built on coherence and shared purpose. The next iteration will ensure our financial system continues to evolve with clarity and ambition,” Abdul Rasheed said. Looking back, he concluded that the Financial Sector Blueprint 2022-2026 has shaped a more inclusive, resilient and innovation-ready financial sector. “But the future demands greater agility, deeper collaboration and bolder thinking,” he said.

Third, BNM will publish a discussion paper on asset tokenisation outlining potential use cases and safeguards for safe adoption of tokenisation. Abdul Rasheed said Malaysia’s net-zero targets demand innovative financial solutions, while an ageing population calls for inclusive and forward-looking financial policies in long term welfare, healthcare and social protection. “The financial sector is being reshaped by three powerful forces: digitalisation, sustain ability and demographic shifts. Technologies such as generative AI and blockchain are transforming business models and redefining consumer expectations.” On a separate development, the central bank

“But we also remain cautious of developments that introduce undue risks or operate outside the safeguards needed to preserve financial stability and public trust,” he said. Abdul Rasheed outlined three forthcoming regulatory initiatives as part of BNM’s efforts to prepare the financial system for future trends, “First, we released a discussion paper on artificial intelligence today (Tuesday), outlining our regulatory and developmental approach, including priority areas for industry-led colla boration and responsible adoption of AI in financial services.” Second, Abdul Rasheed said, by year-end this

Governor Datuk Seri Abdul Rasheed Ghaffour said digital assets are increasingly shaping financial services, offering efficiency and new delivery models. “Their potential is significant and cannot be ignored,” he said in his speech at MyFintech Week 2025 yesterday. Abdul Rasheed stressed that the central bank is open to innovation that brings genuine value to the economy and supports productive use cases. “But we also remain cautious of developments that introduce undue risks or operate outside the safeguards needed to