In his address at the recent FOMCA Conference, he shared:
The national strategy rests on three main thrusts – the three “Cs”:
- Clarity: In terms of having a clear vision to realise financial well-being of Malaysians.
- Collaboration: Financial literacy is a shared responsibility and, therefore, requires strong collaboration of all stakeholders.
- Commitment: Is towards having an outcome-oriented approach to implementation.
The first is “Clarity”. We have a clear vision -- to realise financial well-being of Malaysians by advancing and elevating financial literacy. Our vision aims to shape the society characterised by - responsible financial behaviour; the ability to manage finances well; and to achieve financial security. A population with a high-sense of financial well-being has the financial freedom of choice to enjoy life.
Financial well-being is a pre-condition for a more productive, resilient and inclusive economy. Indeed, the journey to attain individual financial well-being is a journey worth taking and it will be a long journey too. Thus, over the longer run, the implementation of the national strategy will be aligned to the longer term Government aspiration under the Finance Cluster initiative of the Transformasi Nasional 2050 -- or the TN50. I therefore welcome further views and ideas from the audience during this conference on your aspirations to achieve financial well-being of our future Malaysia.
Financial well-being is not about being rich. Rather, it is about the ability to live within means and making responsible financial decisions. The state of financial well-being of an individual is a reflection of two factors -- firstly, his or her level of financial literacy, and secondly, a person’s economic background.
Unfavourable personal and economic circumstances, for instance, like most of us – coming from low and middle income families living in a city, may be more dependent on external factors and are not easily changed. Financial literacy, on the other hand, resides within an individual where we have control. Given the right intervention, motivation and discipline, an individual’s level of financial literacy can be improved from within. More importantly, such interventions can also become an important element to uplift a person’s personal and economic circumstances.
The reverse is also true - absence of financial literacy may reverse financial well-being. We have seen many situations where individuals with favourable circumstances, such as high income professionals, nevertheless, fall into financial problems due to poor personal financial management. On the other hand, we often hear of people with less favourable personal and economic circumstances living comfortably within their means by practicing a “prudent and modest lifestyle”.
The aspiration and objectives of a national strategy for financial literacy have been carefully articulated by the Financial Education Network (FE Network), which was established in late 2016. Strategic outcomes, priority areas and target groups have been identified. The national strategy for financial literacy have identified five strategic priorities which cover all life stages – from nurturing values among young children, to inculcating positive behaviour for adults and preparing Malaysians to retire comfortably. Specific action plans would be formulated to reach out to the masses as well as meeting the needs of specific target groups.
The second key thrust is “collaboration”. I believe that shared responsibility and concerted efforts are integral to the successful implementation of the national strategy to realise our desired outcome. It requires strong and long-term efforts by all stakeholders, including regulators, private and public sectors, non-governmental associations and the consumers themselves to realise the desired outcome of improving financial literacy.
Each stakeholder has its own strength. While some are subject matter experts providing reliable financial education to the targeted audience, others may have access to critical contact points to reach out to the masses. Often times, many agencies are also well-positioned to leverage on “teachable moments” such as at the stage of starting a job; getting married; or preparing for retirement, where key financial decisions are made. The national strategy will be a catalyst for the stakeholders to leverage on each other’s strengths, resources, expertise or even authority in providing a holistic financial education and in reaching out to Malaysians nationwide. We would anticipate some nudges or policy changes by relevant stakeholders in order to influence behavioural change in consumers.
Over the recent years, concerted efforts between the private and public sectors have resulted in a number of specific financial education initiatives being implemented. For example, financial education elements are integrated into the school curriculum for Year 1, Year 4 to 6 and Secondary 1 following effective collaboration between the Ministry of Education and Bank Negara Malaysia. I am pleased that financial institutions and the private sector are also playing their roles to strengthen learning in the classroom through extra-curricular activities in their respective signature financial education programmes. Moving forward, more can be done to instil positive financial values among the 5 million school children through greater sharing of responsibility.
I would also like to acknowledge FOMCA’s on-going initiatives in financial education over the years. Indeed, FOMCA has been a valuable partner in the education segment. I wish to take this opportunity to welcome FOMCA’s willingness to join hands with the FE Network to elevate financial literacy of our consumers under the national strategy.
FOMCA, through its affiliates and extensive network nationwide, is well-positioned to contribute on two fronts. The following are my suggestions. Firstly, FOMCA can further expand outreach to educate and create awareness on the importance of financial literacy, particularly to the informal sectors. It is important that our financial education initiatives can be reached to the masses.
Secondly, FOMCA can serve as a medium to inspire the thinking and outlook of various non-governmental consumer groups - in order to place higher importance for financial education in their agenda. Engagements with associations for women, parents, youths, athletes and even artistes can help convey financial education concerns and realign mind-sets at the organisational level.
Financial education is also a two-way process. For it to be impactful, consumers themselves need to play a role and take charge of their financial well-being. Rather than ‘living for today’, the culture of ‘living within means’ should take centre stage in our society. This paradigm shift is critical to generate a financially responsible society.
The third and final thrust is “Commitment”. Let me quote Abraham Lincoln, “Commitment is what transfers a promise into reality”. Unless full commitment is made, elevating literacy levels and achieving financial well-being will remain as only hopes and dreams of Malaysians.
The FE Network is committed to play a leadership role to achieve the targeted outcomes of our national strategy. I urge other stakeholders to join us and to embark on this journey together. Commitment from various agencies at different levels is pertinent, especially in areas where they have the greatest strength.
Financial education initiatives under the national strategy will be inclusive, be evaluated and enhanced over time to ensure that they remain relevant and impactful. To this end, I encourage the agencies represented here today to identify the levers that contribute to better financial decisions by consumers in different circumstances through consumer behavioural studies. Results of such studies can help in the improvement of financial education initiatives, and serve as a powerful tool to instil commitment of consumers. Take the lead from FOMCA, which has the experience and expertise to embark on this approach.
We need to elevate the financial literacy of Malaysians through a national strategy for financial literacy which will chart our journey in realising the financial well-being of Malaysians.
However, having a national strategy is only meaningful if it delivers what it is designed to achieve. This journey will indeed take time, but it is worthwhile, as ‘big journeys always begin in small steps’.
For the Deputy Governor’s full speech at the conference, click here.
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