Financial industry must set standards digital revolution
KUALA LUMPUR: There will be an increasing need for financial industry players to come together and set the standards for novel areas of practice to cater for the digital revolution, Bank Negara Malaysia ( BNM) said.
Deputy Governor Jessica Chew Cheng Lian said the digital revolution such as artificial intelligence and big data in finance not only created opportunities for innovation, efficiency and growth but also brought new risks and challenges.
“It (digital revolution) also created difficult ethical questions on lines that should be drawn to prevent unfair, systematic discrimination against specific groups, for instance, the inappropriate use of personal data and excessive volat i l it ies from high-
It (digital revolution) also created difficult ethical questions on lines that should be drawn to prevent unfair, systematic discrimination against specific groups, for instance, the inappropriate use of personal data and excessive volatilities from high-frequency trading. Jessica Chew Cheng Lian, BNM Deputy Governor
frequency trading,” she said. Chew was speaking at the launch of the Financial Services Professional Board (FSPB) Professional Code for the financial services industry yesterday. She jointly launched the code with FSPB chairman Tan Sri Mohd Munir Abdul Majid. She said as the industry navigated these issues, it had never been more critical to have a shared commitment to a common set of values in order to build trust with customers, employees, other financial institutions, and the public at large. “There are compelling economic, not just social or moral, reasons to do so. “It encourages healthy competition, more efficient and sustainable markets, and consistently high levels of performance over the long term,” she explained. Chew said deliberate and sustained ef- forts by the industry would be needed to engage, communicate, educate and internalise these shared values.
“By pooling inputs across the industry, richer worked examples can be developed to shed light on how ethical principles should apply in practice,” she said.
The consequences of misconduct should also be clear and unambiguous to firmly entrench behavioural norms, both within individual financial institutions and at an industry level, she added.
On the central bank’s part, Chew said it would continue to provide a credible deterrent against misconduct through enforcement actions.
“We will continue to pursue investigations and enforcement actions into serious conduct breaches to the full extent of powers provided under laws administered by BNM,” she said.
For cases beyond the limits of BNM’s powers, Chew said, the central bank maintained close cooperation with other authorities to facilitate investigations and enforcement actions. — Bernama