Bank Negara advances key initiatives to boost digitalisation
KUALA LUMPUR: Bank Negara Malaysia (BNM) is advancing several key initiatives to boost digitalisation in the country, as a future-ready system needs more than new technology and business models.
BNM governor Datuk Seri Abdul Rasheed Ghaffour said the central bank has released a Discussion Paper on Artificial Intelligence (AI) today, outlining the central bank's regulatory and developmental approach, including priority areas for industry-led collaboration and responsible adoption of AI in financial services.
"By the end of this year, we will issue an Exposure Draft on Open Finance, setting out our vision for a data-driven and customer-permissioned data sharing ecosystem.
"We will publish a Discussion Paper on Asset Tokenisation, outlining potential use cases and safeguards for safe adoption of tokenisation," he said in his opening address at the MyFintech Week 2025 here today.
Abdul Rasheed emphasised that a future-ready system calls for secure digital identity and data sharing frameworks, robust data governance, effective cybersecurity and a regulatory foundation that enables inclusive, responsible and trusted innovation.
He added that the recently launched Digital Asset Innovation Hub enabled experimentation with real-world use cases, such as programmable payments and supply chain finance.
These efforts complement BNM's regulatory sandbox and the Securities Commission's initiatives, which provided a regulatory framework for digital asset investments since 2019, he said, noting that digital assets were increasingly shaping financial services, offering efficiency and new delivery models.
Abdul Rasheed said digital assets' potential is significant and cannot be ignored, and emphasised that BNM's approach continues to be guided by clear principles.
"We are 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 preserve financial stability and public trust,' he said.
He said the central bank is also enhancing the wholesale payment systems to support market resilience and cross-border flows, including exploring the future of money through 'Project Mawar' -- BNM's wholesale central bank digital currency initiative -- and collaborations with the BIS Innovation Hub.
Abdul Rasheed said digitalisation is transforming insurance and takaful, with innovations like digital roadside assistance.
"Digital banks, as well as digital insurers and takaful operators that will soon be licensed, are set to bring fresh thinking, digital-native models and a sharper focus on underserved segments, improving customer experience and catalysing broader transformation across the industry,' he added.
BNM is also fostering innovation through the Climate Finance Innovation Lab under the Joint Committee on Climate Change with the industry.
The initiative brings together public, private and philanthropic players to test new financial instruments, including those based on Islamic finance, that can cohesively address environmental and socioeconomic risks.
Themed 'Ideate, Innovate, Co-create: Shaping the Future of Finance', the third instalment of MyFintech Week 2025 was organised by BNM, the Securities Commission Malaysia, the Asian Institute of Chartered Bankers, Fintech Association of Malaysia, and Malaysia Digital Economy Corporation, held from Aug 4-7. - Bernama
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
an hour ago
- New Straits Times
AI search pushing an already weakened media industry to the brink
GENERATIVE artificial intelligence assistants like ChatGPT are cutting into traditional online search traffic, depriving news sites of visitors and impacting the advertising revenue they desperately need, in a crushing blow to an industry fighting for survival. "The next three or four years will be incredibly challenging for publishers everywhere. No one is immune from the AI summaries storm gathering on the horizon," said Matt Karolian, vice-president of research and development at Boston Globe Media. "Publishers need to build their own shelters or risk being swept away." While data remains limited, a recent Pew Research Centre study shows that AI-generated summaries now appearing regularly in Google searches discourage users from clicking through to source articles. When AI summaries are present, users click on suggested links half as often compared with traditional searches. This represents a devastating loss of visitors for online media sites that depend on traffic for advertising revenue and subscription conversions. According to Northeastern University Professor John Wihbey, these trends "will accelerate, and pretty soon, we will have an entirely different web". The dominance of tech giants like Google and Meta had slashed online media advertising revenue, forcing publishers to pivot toward paid subscriptions. But Wihbey said that subscriptions also depend on traffic, and paying subscribers alone aren't sufficient to support major media organisations. The Boston Globe group has begun seeing subscribers sign up through ChatGPT, offering a new touchpoint with potential readers, Karolian said. However, "these remain incredibly modest compared with other platforms, including even smaller search engines". To survive what many see as an inevitable shift, media companies are increasingly adopting GEO (Generative Engine Optimisation) — a technique that replaces traditional SEO (Search Engine Optimisation). This involves providing AI models with clearly labelled content, good structure, comprehensible text and strong presence on social networks and forums like Reddit that get crawled by AI companies. But a fundamental question remains: "Should you allow OpenAI crawlers to crawl your website and your content?" asks Thomas Peham, CEO of optimisation startup OtterlyAI. Burned by aggressive data collection from major AI companies, many news publishers have chosen to fight back by blocking AI crawlers from accessing their content. Some progress has been made on this front. Licensing agreements have emerged between major players, such as the New York Times and Amazon, Google and Associated Press, and Mistral and Agence France-Presse. But the issue is far from resolved, as major legal battles are underway, most notably the New York Times' suit against OpenAI and Microsoft. Publishers face a dilemma: blocking AI crawlers protects their content but reduces exposure to potential new readers. Faced with this challenge, "media leaders are increasingly choosing to reopen access", Peham observed. Yet even with open access, success isn't guaranteed. According to OtterlyAI data, media outlets represent just 29 per cent of citations offered by ChatGPT, trailing corporate websites at 36 per cent. And while Google search has traditionally privileged sources recognised as reliable, "we don't see this with ChatGPT", Peham said. The stakes extend beyond business models. According to the Reuters Institute's 2025 Digital News Report, about 15 per cent of people under 25 use generative AI to get their news. Given questions about AI sourcing and reliability, this trend risks confusing readers about information origins and credibility, much like social media did before it. "At some point, someone has to do the reporting," Karolian said. "Without original journalism, none of these AI platforms would have anything to summarise."
The Sun
2 hours ago
- The Sun
Financial service providers increasingly adopting AI: Bank Negara survey
KUALA LUMPUR: Financial service providers in Malaysia are increasingly adopting artificial intelligence (AI), according to the central bank's AI Survey 2024. 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' today. 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 respondens 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. 'This means that while new innovations, such as AI, are given the opportunity to flourish, associated risks that may negatively impact system-wide stability, consumer outcomes, and confidence in the financial sector will need to be managed effectively.' BNM interviewed select local financial industry players throughout 2024 and issued an updated industry-wide survey to gain insights into recent advancements on AI within the Malaysian financial sector. The AI Survey 2024 received responses from 1,207 financial service providers.
The Sun
3 hours ago
- The Sun
BNM laying regulatory groundwork to ensure responsible, inclusive and trusted innovation in financial sector
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. 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 today. 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 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. '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 collaboration and responsible adoption of AI in financial services.' Second, Abdul Rasheed said, by year-end this 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. 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, sustainability and demographic shifts. Technologies such as generative AI and blockchain are transforming business models and redefining consumer expectations.' On a separate development, the 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.
