BNM: Wider Adoption Of Digital Financial Services Hindered By Low Awareness, Limited Financial Literacy
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Certain segments of the Malaysian public continue to avoid tapping into digital financial services (DFS) due to several reasons, said Bank Negara Malaysia (BNM). These include factors such as low awareness, trust, and confidence, as well as limited digital financial literacy.

Highlighted in its recently published Annual Report 2022, the central bank said that this serves as a reminder of the importance of financial literacy for Malaysians from all backgrounds, especially as a life skill. If picked up, consumers will have the necessary knowledge and resources required to conduct their daily financial activities responsibly and confidently, including those performed via digital financial service providers.

“Enhanced financial literacy, including digital financial literacy, ultimately empowers consumers to take better advantage of DFS in managing their day-to-day finances, leading to better lifestyle choices and wellbeing,” said BNM, adding that consumers need to know how to identify the right products and services for themselves, including for investments. This is especially since there has been a significant growth in the number of financial apps and tools in the market.

That said, BNM also reminded that the adoption of DFS is not necessarily the sole indicator of someone possessing good financial literacy knowledge. Drawing from the findings of its Financial Capability and Inclusion Demand Side Survey 2021 (FCI Survey 2021), BNM said that about 74% of Malaysians are shown to have adopted DFS, but the level of digital financial literacy among Malaysians is still generally low.

“This gap would increase the risks of consumers falling prey to online fraud such as phishing, hacking attacks, unauthorised use of data, and being used as mule accounts. Reported cases of victims falling prey to financial fraud and scams point to the compromise of personal information as the dominant risk factor,“ BNM stressed.

The central bank emphasised that it is crucial for DFS users to learn and build good cybersecurity habits – as part of their financial literacy education – to protect their personal information. This can go a long way in reducing the chances of becoming a scam victim.

(Sources: BNM, The Sun Daily)

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