KUALA LUMPUR: Demographic shifts, especially rapid urbanisation, provide a new context of challenges in pursuing meaningful financial education strategies to achieve effective and responsible financial management in communities, said Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz.
She said Asia had experienced the most rapid demographic change in the world in the recent two decades and several of its economies had to face new challenges, including slower population growth, rapid ageing, intensification of urbanisation, and the consequences of increasing life expectancy.
She said Asia’s urban population is projected to grow to 56% in 2030 from 43% in 2010 and rise further to 64% in 2050. Accompanying this is the growth of mega cities with populations exceeding 10 million, she added.
Zeti said this in her opening keynote address at the 11th Citi-FT Financial Education Summit 2014, on, “Expanding Opportunity Through Financial Capability: Urban Innovations and Partnership” yesterday.
She said it is recognised that economic growth and development, no matter how stellar, will fade when inequality sets in and income disparities widen. “Hence, balanced growth is an important imperative for socio-economic progress.
“To address this, inclusive growth has gained prominence among policymakers in the region, and this needs to be further reinforced by strategies targeted at preparing individuals to be well equipped to adjust to new economic, financial and social realities that confront them.
“A lack of awareness of different types of financial products, low level of confidence and poor knowledge of how products work, are barriers to financial inclusion and become more acute in increasingly complex and technology-driven financial systems,” she said.
According to Zeti, financial education as such, has an important role to break such barriers and this will require more innovative approaches, broader partnerships and deeper understanding of social attitudes.
She said the commitment to financial education should be a natural extension of the financial industry’s commitment to a professional and ethical conduct of business, and strategies need to be accompanied by a strong focus on developing a robust consumer protection regime.
Citibank Bhd chief executive officer Lee Lung Nien said the bank through its financial education efforts since 2003, has supported the central bank’s efforts in addressing the local financial capability gap and has contributed US$2 million (RM6.7 million) in Citi Foundation grants. — Bernama
This article first appeared in The Edge Financial Daily, on November 6, 2014.