Overview

The Malaysian banking industry will become more competitive in the future as a result of Bank Negara Malaysia's foray into sustainable and ethical banking efforts, as well as digital banking, with the issuing of five digital banking licences (BNM). Sustainable finance relates to investment decisions that consider the environmental, social and governance (ESG) factors of an economic activity or project. Over the past three years, Malaysia has seen consecutive years of growth in the volume of sustainable debt issuances. In 2021, Malaysia saw a 306% increase from 2020, with a volume of RM8.425bil in such issuances. This upward trend has continued and year-to-date, the nation has achieved a record RM10.64bil in sustainable debt issuances. This figure is anticipated to rise further. Social finance is likewise positioned to play a larger role in the industry, successfully complementing the environmental, social, and governance (ESG) goal by integrating inclusivity into the country's future financial ecology. As the financial sector evolves, so will skills and employment, making it critical for the country to have a highly skilled workforce that understands the broader areas of responsible finance and the ethical and social purpose of banking that extends beyond financial returns.