A National Conference themed “Towards an Effective Financial Education Strategy for Malaysia” was organised on the 3 October 2017 at Lanai Kijang Kuala Lumpur. The Conference was organised by Era Consumer, the Federation of Malaysian Consumers Organisations Malaysia (FOMCA) and the Financial Literacy Association of Malaysia (FLAME) with the cooperation of Bank Negara Malaysia and supported by Citi Foundation.
The Conference was aimed at moving forward towards formulating and implementing a national financial education strategy in which all Malaysians, especially those most in need, would have access to financial education.
About 150 participants from various sectors – government agencies, banks and insurance companies, financial industry associations, financial planners, non-profits as well as worker organisations, youth organisations and women organisations – participated in the Conference.
Mr. Lee Lung Nien, the Chief Executive Officer of Citi Malaysia presented the welcoming address and he further emphasised Citi Malaysia’s continuous commitment towards enhancing financial education in Malaysia.
The Keynote of the Conference was presented by Mr. Sheik Abdul Rasheed bin Abdul Ghaffour, the Deputy Governor of Bank Negara Malaysia. He suggested that four factors contributed to the need for financial literacy.
Firstly, Malaysians tend to have low financial resilience and are thus vulnerable to financial shocks. Secondly, many consumers focused on instant gratification, leading to less than optimal financial decisions. Thirdly, many Malaysians do not practice long term financial planning.
Finally, Malaysians still lack understanding of risk and return and thus are not able to make rational financial decisions. He reiterated that in this context, financial education would encourage consumers to better manage their finances, plan for the future and manage risks associated to financial matters.
As a way forward to address these challenges, the Deputy Governor, shared that efforts were currently on the way to formulate a five year national strategy to elevate financial literacy. The national strategy would rest on three main thrusts; clarity, collaboration and commitment.
Clarity means having a clear vision to realise financial well-being. The vision aims to shape society characterised by responsible financial behaviour. Collaboration means that financial literacy is shared responsibility and thus required the strong collaboration of all stakeholders including regulators, private and public sectors, non-governmental associations and consumers. Finally, commitment means an outcome oriented approach to implementation. Through commitment, plans and expectations can be transformed into realities.
He concluded by reiterating that a national strategy for financial literacy was currently being formulated to chart the journey in realising financial well-being of all Malaysians.
Next, Dato’ Dr. Paul Selva Raj, President of Era Consumer and Senior Researcher with the Consumer Research and Resource Centre (CRRC) presented a talk of the “Ecological Perspective of Financial Behaviour: Implications for Policy and Practice”. In his presentation, he emphasised that financial education was important but not enough to change financial behaviour. A more ecological perspective was needed to understand as well as to change financial behaviours.
The third presentation of the day was by Mr. Peter Kell, Deputy Chair of the Australian Securities and Investments Commission (ASIC) who shared his experiences of the formulation and implementation of the national financial education strategy in Australia. The first national financial education strategy was launched in 2011 and the second strategy was launched in 2014. An essential component of the formulation and implementation of the strategy was the collaboration with many stakeholders.
The vision of the national strategy is to “improve the financial wellbeing of Australians by advancing their financial literacy”. There are five strategic priorities; three for individuals, families and communities and two for policy and program development. For the individuals, families and communities, the three priorities are educating the next generation particularly through the formal education system, increasing the use of free, impartial information, tools and resources and providing quality targeted guidance and support. For the policy and program development, the two priorities are strengthening coordination and effective partnerships and improving research, measurement and evaluation.
In summarising the way forward from the Conference, Dato’ Dr. Paul was thankful the Bank Negara Malaysia was committed and already formulating a National Financial Education Strategy. He emphasised a continuous process collaboration with all relevant stakeholders in the formulation and implementation of the National Financial Education for Malaysia.