BUILDING TRUST IN DIGITAL FINANCE
MALAYSIA is moving towards a cashless society. Using cash is losing ground to electronic payments. Credit and debit card expenditure is expected to reach RM387 billion this year.
The trend of cashless payments accelerated during the Covid-19 pandemic. According to Bank Negara, 68.9 per cent of transactions at physical premises were contactless in 2022, up from 64.6 per cent in 2021. Electronic payments grew from 9.3 billion transactions in 2022 to 11.5 billion transactions in 2023.
Digital financial services offer many benefits, but there are also risks, including the worsening digital divide, making vulnerable groups more isolated in the digital economy. Twelve per cent of the population, or about four million Malaysians, mostly from rural areas, cannot access financial services.
There are also concerns about security in the face of cyberattacks, phishing, scams, hacking and data breaches.
This has affected the public’s confidence in digital banking. Digital financial services involve vast amounts of personal and financial data, which are increasingly at risk of manipulation for profit.
According to Bank Negara, poor awareness, trust and digital financial literacy are barriers to adopting digital financial services.
Consumers International (CI) is advocating for better transparency in digital finance. All consumers should be empowered to make informed decisions about digital finance.
The Federation of Malaysian Consumers Associations supports CI and calls on all stakeholders in the digital finance ecosystem to end poor practices and ensure information for consumers is transparent, accurate, complete, easy to find and understand.
Campaigns should be carried out to raise awareness among vulnerable groups, especially low-income communities and the aged population, about the benefits and potential risks associated with digital financial services.
Digital literacy programmes should be offered to help vulnerable groups navigate digital financial platforms.
Robust privacy and data protection measures are essential to safeguard personal and financial data.
Educating consumers about data security and privacy rights is crucial in boosting awareness and trust in digital financial services.
Finally, service providers need to establish effective, timely and robust reparation systems to ensure consumers have access to justice and fairness.
Consumer redress mechanisms need to be accessible and provide speedy solutions to aggrieved consumers.