Closely related to this is the need to strengthen the framework for consumer protection to provide an avenue for redress in cases where consumers are placed in a disadvantaged or unfair position resulting from financial transactions taken due to lack of transparency and understanding. The move towards the adoption of the supervised market approach requires continuous efforts to enhance product disclosures and to elevate the level of financial literacy of consumers. Dealing with consumer awareness and education require considerable time and commitment. While recognising the potential benefits of liberalisation to the domestic financial system, the need to ensure the proper sequencing, and to manage the liberalisation process must be accorded importance. Financial systems in emerging economies have and are expected to continue to play a significant role in the economy. As such, the process of international integration of the domestic financial system has to be paced with developments in the domestic system so as to ensure that the system is adequately prepared to cope with the challenges arising from the liberalisation process without destabilising effects on the domestic economy. The liberalisation process must be managed with respect to identifying the potential sources of risks to the system.
The development of the venture capital industry, a better framework for SME financing and the provision of micro financing continue to be important priorities to ensure that credit is made available to all segments of the economy, as well as to support the growth of new areas and industries. Increased focus on developing these financing modes has been supported with higher public sector budget allocations for the venture capital industry and for specific development financial institutions to channel micro-credit to small micro-enterprises. Priority has also been accorded to investment in information and communications technology by the banking sector. With the completion of the consolidation exercise, domestic banking institutions have actively embarked on upgrading their systems, including in product delivery, risk management and information systems. The adoption of technology in the Malaysian banking system has predominantly been to automate business processes. However, more recently technology has been used as a tool to assess and drive business performance. With competition in the market becoming increasingly intense, the ability to understand the drivers of performance and the ability to make prompt response is vital to remain competitive. Business delivery channels and business processes have also been reviewed to enhance efficiency levels and service quality to the customers. Many have formed strategic alliances with partners to enrich their value proposition to their customers through cross-selling of products and services. Indeed, the Malaysian banking industry has now become more consumer-centric.