Predictive models used for decision-making must be subject to regular reviews against consumer outcomes and redress channels need to be aligned with the digital experience. Indeed, we should be concerned that while the delivery of financial products and services is taking on increasingly digital dimensions, when something goes wrong, processes for consumers to seek redress are still heavily manual in nature. As for financial education, I am reminded of the old adage by Sir Francis Bacon: “Reading maketh a full man, conference a ready man, writing an exact man”. Today’s digital consumer – at least many of them – has neither the patience nor time to read, confer or write. In fact, this is almost the entire premise of digital financial solutions – brevity, speed and convenience. The short attention spans of financial consumers are further constrained by an overload of information and misinformation. Digital solutions that can efficiently deliver financial education to masses of people, while simultaneously providing capabilities to tailor knowledge and information to one’s personal circumstances (such as through loan affordability calculators), have gained increasing traction. However, the fact that digital interventions are more cost-efficient, accessible and scalable, do not automatically make them any more effective than more traditional interventions in the past that have failed to achieve a consistent and lasting impact in changing behaviour. We need to develop reliable insights into behavioural influences that may help or prevent consumers from making good financial decisions. This sounds simple in theory, but is as complex as an understanding of human psychology itself.
The region as a whole is an active hive of experimentation in digital financial services, supported by favourable consumer demographics, particularly the digitally savvy youth. In Southeast Asia, digital financial services is estimated to contribute about 5% of the total revenue for the financial sector this year. This share is expected to more than double to 11% within the next five years, driven among others by digital lending, investment, remittance and insurance products. Here in Malaysia, the most recent demand side survey on financial capability and inclusion indicated that four in ten Malaysians utilise internet banking services, up from just one in ten as recently as three years before. This trend is expected to intensify, with the expansion in digital product offerings and growing acceptance of online financial services. 1/3  BIS central bankers' speeches  Building trust and confidence Digitalisation can also be a powerful force for sustainable financial inclusion. By lowering costs and increasing scale and reach, it has become a means for providing access to essential financial services such as e-payments, micro-insurance and online remittance to previously underserved segments. Other innovations such as banking and insurance aggregators are also helping consumers make better financial decisions, in turn, increasing their confidence in using financial services.