Attention at the highest management level is therefore vital to ensure the formulation of the most appropriate ICT strategies for banks to remain competitive. The new banking environment is about differentiating banking products and services that provide increased choices, control, security and accessibility. The ability of financial institutions to deliver products and services in the most efficient and effective manner will be key to determining performance and relevance. In this area, financial institutions in Malaysia have not been behind in embracing the rapidly evolving technologies and in taking initiatives to enhance the delivery channels. There are 12 banks offering Internet banking facilities while five have introduced mobile banking. The adoption of chip technology now also offers new forms of payment choices and higher security to the public. The introduction of the Bankcard to replace the magnetic stripe ATM cards and efforts towards migrating to EMV compliant credit cards before end-2004 is indeed an important step forward. A further development has been the introduction of the MEPS Cash, the national e-purse scheme as an alternative electronic payment mode to using cash for making retail payments. The ATM machines of the participating banks and terminals at retail outlets are being upgraded to facilitate MEPS Cash transactions. With these developments, specific programmes need to be implemented to promote the usage of MEPS Cash among the public and business entities. Indeed, this e-payment program is a good start to promote a wider use an acceptance of this means of payment.
In this respect, I note that the banking industry has drawn up a communication strategy to raise consumers awareness of its convenience, speed and efficiency and to encourage its use. A smooth functioning payment system is critical to the effective functioning of the economy. As the payment systems continue to evolve, Bank Negara Malaysia, will continue to facilitate and foster the safety and efficiency of the payment systems to safeguard public interest. To enhance the efficiency of the payment systems, Bank Negara Malaysia has recently reviewed the legal and regulatory framework of the payments system. A comprehensive legislation on the payment systems is being put in place to provide the mandate for Bank Negara Malaysia to effectively oversee and facilitate greater development of the payment systems. The legislation would also promote a conducive and liberalised environment for the modernisation of the payment systems in Malaysia. Several policy decisions have also been made. Access to the payments system has been broadened with the relaxation of the policy on the offering of payment gateway services and issuance of credit cards. Banks are allowed to operate their own payment gateways and non-banks are permitted to issue credit cards if they have established line of credit mechanism from the banks, or have set up a joint venture company with the banking institutions.