The Deputy Governor of Bank Negara Malaysia (BNM) urged residents in rural areas and micro-entrepreneurs to use electronic or e-payment facilities to improve access for the rural and micro-entrepreneurs who cannot conveniently access banks located in their areas due to poor transportation networks and will reduce the need for banks to maintain so many branches and the lower costs would have positive effects for banks’ profitability.
Firstly, it begins with the assumption the residents in rural areas and micro-entrepreneurs have some sort of formal bank accounts with available funds or overdrafts in their accounts to make cash payments. They will also need devices that support digital financial services and affordable internet connectivity to enable them to carry out basic financial transactions remotely.
Previously and probably even now, those in the rural areas or are doing micro businesses have little incentive to use digital channels which they do not understand and do not have the financial literacy to understand how it works.
As they are generally in the low income group, they are more worried about the state of their personal finances than believing the promise that digital channels will help them in their lives and businesses. Thus, many in rural areas do not accept digital payments due to the high fees and set-up costs imposed by banks.
If BNM is really serious about pushing for greater financial inclusion amongst the rural people and the micro-entrepreneur community, they should first explore and building the necessary trust and confidence that customers need.
Especially now when there is an increasing trend of online scams being perpetrated against Malaysians.
Maybe if the unity government is to seriously consider the recent suggestion by a Member of Parliament for the unity government to legislate a law to hold banks accountable by making them reimburse scam victims for their losses, the plan to get those in the rural areas and the micro-entrepreneur community to migrate to digital channels will remain just a dream.
BNM should be working together with the Ministry of Communication and Multimedia to ensure that internet connectivity is stable and is offered at affordable rates to the rural areas. This is to encourage this underserved group to use the digital platform for their activities.
How does BNM expect greater financial inclusion in states like Kelantan, Sabah or Sarawak where connectivity is non-existent?
When poor individuals lack trust in the stability of the financial system, they will have little incentive to participate in the formal financial system, much less the digital financial system.
In fact, scammers have new tools that can get around bank security systems where they are able to read one-time passwords and they can even delete the SMS sent by banks, leading victims to believe they were not given any notification before fund transfers.
This lead us to the question of how responsive are the banks in Malaysia to reported scams involving their customers presently?
Answer is zero.
Almost all authoritative parties had done little to assist the victims.
Scam victims bring their issues to banks, who neither treat the issues as they should, nor provide any sort of compensation. The banks will refer their cases to the OFS. Victims are then advised to lodge a police report, which then in turn pushes the banks to investigate and vice versa.
Meanwhile, Bank Negara Malaysia remains indifferent and does not do anything.
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