Priority 4: Empowerment through consumer protection and education The fourth area relates to the greater empowerment of consumers through consumer protection and education. Both the financial service industry and the financial consumers have an important respective role for financial inclusion to transition to a higher level. Financial inclusion is best achieved when consumers are assured of fair treatment. In developing financial products by the service providers, of great importance is their professional and ethical conduct. Here, the role of the Board and senior management of such financial service providers need to set the right culture, policies and incentive systems that support fair and responsible business practices. Policies that promote responsible market conduct that is reinforced by transparent disclosure requirements will be important in advancing responsible financial inclusion. A key aspect of a successful financial inclusion agenda is also building financial capability of consumers so that they can meaningfully participate in the financial system. Financial education, as with other forms of education, is a powerful agent of empowerment. It empowers consumers with the knowledge, skills and tools to build, manage and protect their personal wealth. In Malaysia, efforts to systematically build financial capability among the population began almost twenty years ago, in 1996, when a National Savings Promotion Campaign was launched to enhance awareness on the importance of savings, including among school children. Since then, a more holistic and comprehensive consumer financial education programme for both children and adults has been implemented for more effective participation in the financial in the financial system.
The nature and quality of the financial services and the nature of the participation in the financial system is equally important. The poor are confronted with challenging circumstances, such as low and irregular income that makes monthly debtservicing difficult, or living in remote rural areas which have no financial services access points, or long working hours that prevent visiting bank branches within the conventional operational hours. As a result, many of the marginalised may have financial services made available to them, but it may not be at the needed conditions or quality that can provide the real promise of upward economic mobility. Access, therefore needs to be complemented by the quality of the financial services. Of importance is the innovation and design of consumer products which have characteristics  BIS central bankers’ speeches  1  that are linked to the goal of welfare improvements for the underserved. There is a greater need for features that are responsive to the constraints faced by those that have been marginalised. Flexible microfinance for the agricultural sector for example, addresses the cash flow mismatches between fixed repayments to banks and the irregular income flow of the farmers due to the seasonality of crops. A further innovation has also involved the creation of platforms for matching savers with those that need financing.