50 Years On: Association of Banks in Malaysia’s legacy of trust and service

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By DayakDaily Team

KUCHING, Oct 25: For half a century, The Association of Banks in Malaysia (ABM) has been a pillar of support for the nation’s financial growth and stability. Through its initiatives, ABM has worked tirelessly to foster economic progress, consumer protection, and sustainable development, making a meaningful difference in the everyday lives of Malaysians.

Improving financial inclusion

ABM’s mission to promote financial inclusion has been a defining feature of its work. The association has focused on reaching underserved communities, including the B40 income group, persons with disabilities (PWD), and small and medium enterprises (SMEs).

To improve financial access in rural areas, banks have expanded agent banking networks, bringing essential services closer to underserved communities. This effort helps overcome the Sarawak state’s geographical challenges and enhances financial inclusion.

ABM member banks have consistently supported SMEs, which are recognised as the backbone of the economy, contributing nearly 40 per cent to Malaysia’s gross domestic product (GDP). As at end July 2024, the outstanding SME financing stood at RM401.8 billion. By making financial services accessible to all, ABM has played a crucial role in fostering economic growth across the nation.

Strengthening Consumer Protection

In an era where digital banking is the norm, ABM has prioritised the security of consumers. The rise of financial scams and cybercrime has led ABM to work closely with its members and other key stakeholders to implement various proactive measures to combat financial scams. These include the establishment of the National Scam Response Centre (NSRC) and National Fraud Portal, tightening fraud detection rules and triggers, introduction of more secure ways to authorise transactions, and dedicated fraud hotlines.

ABM and its members have been running the #JanganKenaScam campaign, which is a collaborative effort by the banking industry aimed at raising more widespread awareness about financial scams to the public and providing easy-to-remember tips on how to avoid being scammed. This leads to a more empowered society, to be able to manage better with challenging risks of fraud and scams, among others.

These measures are designed to provide a more secure environment to enable Malaysians to transact online with confidence. ABM’s commitment to consumer protection reflects its broader goal of building trust between the banking sector and the public.

Championing Sustainability and Green Finance

As Malaysia continues to navigate the challenges of climate change, ABM has been instrumental in steering the banking sector towards more sustainable practices. ABM member banks have reduced their carbon emissions from their internal operations. In Sabah and Sarawak, some banks have successfully changed their electricity supply to solar and hydroelectricity. Banks are also working with their suppliers and customers to adopt more sustainable practices.

ABM member banks have been reaching out to schools, including in Sabah and Sarawak, to provide climate education to the students. They have also implemented various projects at schools to reduce the greenhouse gas (GHG) emissions.

By promoting sustainable finance, ABM ensures that Malaysia’s economic growth does not come at the expense of the environment.

ABM’s role in fostering a low-carbon economy is crucial, particularly as the world shifts towards greener solutions. The association’s efforts to integrate sustainability into banking practices help position Malaysia as a leader in green finance within the ASEAN region.

Empowering Young Malaysians from Underprivileged Communities

Financial literacy and empowering the youth has been another cornerstone of ABM’s work. Through initiatives like the Financial Industry Collective Outreach (FINCO), ABM and its member banks have reached over 930,000 students across Malaysia since 2017.

These programmes aim to equip the younger generation with the tools to help them succeed in life, such as English proficiency, life aspiration and financial literacy. In East Malaysia, FINCO programmes have benefitted over 6,500 students, and close to 120 teachers have been trained in 2024.

Supporting Nation-Building Efforts

Beyond individual consumers, ABM member banks have been a driving force behind Malaysia’s infrastructure development. Member banks have financed over RM150 billion in national infrastructure projects, from transportation to healthcare.

Infrastructure development, including initiatives under the Sarawak Corridor of Renewable Energy (SCORE), has also received strong financial support from the banking industry, boosting connectivity and industrial growth.

ABM’s involvement in nation-building extends to times of crisis as well whereby during the Asian Financial Crisis and the COVID-19 pandemic, ABM member banks provided financial relief, including loan moratoriums and targeted repayment assistance. These measures helped stabilise the economy and protect jobs during challenging periods.

Collaboration for Lasting Impact

ABM’s success over the past 50 years has been underpinned by its strong collaboration with key stakeholders. Working closely with institutions like the Central Bank of Malaysia and the Securities Commission, ABM has played an important role in shaping policies that promote growth and stability within the banking sector.

Partnerships with organisations such as Leadwomen and TalentCorp are furthering impact on the banking industry’s inclusivity and alignment with national development goals with the steer from the Central Bank of Malaysia driving the Financial Inclusivity and Development agenda from the top. As ABM celebrates its 50th anniversary, it remains focused on addressing emerging challenges, particularly in sustainability and financial innovation.

Looking Ahead

ABM represents 26 commercial banks, and its efforts have ensured that banking in Malaysia is both resilient and inclusive. As ABM looks to the future, its role in fostering economic resilience and promoting sustainable development remains critical. The association’s commitment to innovation and collaboration ensures that the banking sector will continue to be a driving force in Malaysia’s socio-economic progress.

ABM member banks are continuing to play a crucial role, contributing across financial inclusion, SME growth, digital transformation, and sustainable development. With a legacy of trust, service, and community engagement, ABM is poised to lead the way toward a more inclusive, and sustainable future, impacting lives. — DayakDaily

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