This is the most tangible way to ensure a high level of competency in the wealth management industry. Sound market conduct Competency without integrity is useless at best, and dangerous at worst. A second imperative for successful private banking is therefore to strengthen market conduct. At its core, private banking is about trust. This means acting with integrity, putting the interests of the client first and safeguarding the confidentiality of the client at all times. Let me highlight two areas for improvement. First, we are seeing increasing cases of mis-selling and mis-conduct in the private banking space. Such practices are ultimately self-defeating. Wealth managers must move away from a transaction-driven approach of pushing products to a client-centred approach that focuses on customised advice to meet long-term needs. Private banks must move away from remuneration structures that rely primarily on commissions, or which are biased towards rewarding staff for recommending certain investment products. Dealing fairly with customers must be made a priority. The Private Banking Code of Conduct developed by the industry sets out principles for proper business conduct by private banks and their staff, and seeks to enhance transparency to clients. MAS’ Guidelines on Fair Dealing emphasise the responsibilities of the Board and Senior Management of financial institutions to deliver fair dealing outcomes to customers and instill a culture of fair dealing that goes beyond compliance with regulatory requirements. Second, the aggressive poaching of private bankers and rapid churning of professional staff are not healthy for the industry.
Ladies and Gentlemen, Bank Negara Malaysia attaches great importance to payment system efficiency and will also continue to promote its security, reliability and efficiency, together with the industry and payment service providers, to foster an innovative payments industry. The FPX platform is an excellent example of this collaborative effort, and I wish to commend MEPS, and the pilot group of banks and corporations for their tremendous effort and commitment in developing the FPX solution. The launching of the FPX marks an important milestone in the development of Malaysia’s payments system. Thank you. 2  BIS Review 63/2004