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
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.
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.
Serve the needs of the high-income population
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.
Develop new growth sectors
We will seed new
sectors for growth, starting with accelerating and sustaining a
significant asset management industry.
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.
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
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.