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Financial Services
Last Updated : 17/3/2017 11:23 AM
 

Where we are today
The importance of the financial services sector to the Malaysian economy has been growing over the past decade, with the financial services sector's share of GDP growing from an average of 9.9 percent of GDP between 2000 and 2005 to an average of 10.9 percent over the period 2006 to 2009. However, the sector faces critical challenges, including lack of scale, lack of liquidity and diversity in the capital markets, low levels of financial literacy and competition from regional financial centres such as Singapore, Hong Kong and increasingly Indonesia.

Vision for the future
We aim to evolve Malaysia's financial services sector to serve the needs of businesses and consumers in a high-income economy and to increase its depth and regional and global market shares in select niches.

Targets and aspirations
The Financial Services NKEA is targetted to raise total GNI contribution by RM121 billion to reach RM180 billion by 2020. In addition, through this NKEA, an additional 275,000 jobs will be created, with 56 percent of them offering an average income of above RM4,000 per month.

In order to achieve this vision, we have identified a portfolio of EPPs for the financial services sector along four strategic thrusts. 

  1. Strengthen the core
    We will ensure all facets of the industry remain healthy and vibrant and are able to effectively and efficiently support the needs of businesses and consumers. This means revitalising our capital markets, deepening and broadening our bond markets, transforming developmental finance institutions and creating an integrated payments ecosystem.

  2. Serve the needs of the high-income population
    We will evolve the products and services that financial institutions offer to serve the changing needs of our citizens and residents as the nation migrates towards higher-income status. This means insuring our population, accelerating the growth of our private pensions industry and spurring the growth of our wealth management industry.

  3. Develop new growth sectors 
    We will seed new sectors for growth, starting with accelerating and sustaining a significant asset management industry.

  4. Go on the offensive
    We will encourage our financial institutions to go on the offensive and tap external markets for their continued growth. This means developing regional bank champions and becoming the indisputable global hub for Islamic finance.

Enabling growth
Achieving our growth targets of growing the financial services sector by three times by 2020 will require cumulative funding of RM211 billion over the next 10 years. The public sector is expected to provide 4 percent of this investment. 

Underlying all of these initiatives are industry-wide barriers that need to be addressed, some urgently and dramatically, or we will fail to deliver on these aspirations. These include devising ways to create an attractive business environment for international and long-term capital, improving our ability to attract, develop and retain talent, organising a more seamless regulatory environment, improving tax competitiveness and improving Malaysia's reputation or brand in financial services.

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