MALAYSIAN BANKING SECTOR ACCELERATES AI ADOPTION FOR SMARTER, ETHICAL COMPLIANCE

KUALA LUMPUR, Nov 10 (Bernama) -- Malaysia’s banking industry is accelerating the use of artificial intelligence (AI) to strengthen compliance, risk management and fraud detection.

However, this must be done responsibly, with strong human oversight, said Asian Institute of Chartered Bankers (AICB) chief executive Edward Ling.

He said the rate of AI adoption among Malaysian financial institutions (FIs) is encouraging, as AICB’s 2025 Workforce Survey found that 57 per cent of FIs indicated they are in the early stages of AI adoption, although the pace differs depending on each institution’s readiness.

“A few years ago, our focus was on building awareness. Today, the landscape has evolved, and the conversation has shifted beyond awareness; we are firmly in the adoption and implementation phase,” he said during a media roundtable held recently in conjunction with the 15th International Conference on Financial Crime and Counter Terrorism Financing (IFCTF).

He highlighted that AICB’s Chief Risk Officers’ (CRO) Forum, supported by Bank Negara Malaysia (BNM), has also spearheaded Malaysia’s first AI Governance Framework for financial services.

Recently launched, the industry-led initiative is designed to help banks integrate technology responsibly and ensure public trust in the financial system remains intact.

“The CROs have come together to develop a comprehensive AI governance framework that will guide Malaysia’s financial industry in adopting AI responsibly, safely and in a future-ready manner, underscoring the industry’s commitment to maintaining trust in the financial system.

“As financial institutions accelerate their use of AI, those seeking to exploit technology are also becoming more sophisticated, and at times, they may move faster than us. This is precisely why Malaysia must begin its AI journey on the right footing, with clear safeguards and strong governance in place,” he added.

Ling said the future of banking will be defined by how effectively the workforce adapts and upskills for an AI-driven era.

He added that AICB’s Future Skills Framework (FSF), together with the newly launched FSF Xcel — Malaysia’s first digital skills assessment platform for the financial sector — plays a pivotal role in helping financial professionals identify skill gaps and prepare for the industry’s accelerating digital transformation.

“We introduced the FSF in July last year to identify current and emerging skills required for banking professionals. To make the framework more actionable, AICB has now launched FSF Xcel, an AI-driven platform that helps professionals identify their skill gaps, benchmark their capabilities and chart personalised learning pathways based on real-time data,” he said.

With more than 40,000 employees expected to see their roles evolve due to automation and technological augmentation, and 67 per cent of institutions reporting moderate proficiency in key digital skills, this further underscores the need for targeted upskilling.

Ling added that the role of the compliance officer is evolving, with professionals now expected to become technologists and data storytellers — applying advanced digital literacy, data interpretation and analytical capabilities to strengthen governance and safeguard the integrity of the financial system.

Meanwhile, Oracle Financial Services senior vice president for finance, risk and compliance product development, Jason Wynne, said AI is helping FIs address the root causes of financial crime — shifting from predicting false positives to building intelligent behavioural models that better understand risk.

“We want to enable banks to have investigators spend less time gathering data and more time making high-impact decisions,” he said.

Wynne said Oracle’s proprietary multi-agent AI Investigators completely transform case investigation workflows by autonomously surfacing critical insights, building case evidence and generating recommendations that significantly enhance investigation quality, accuracy and speed.

“The future of compliance is not just technology; it is humans plus AI. Institutions that master the collaboration between the two — grounded in explainability, agility and control — will be better equipped to stay ahead of their risks,” he added.

He said Oracle’s enterprise-scale analytics platform enables behavioural models expertly tailored to identify high-risk indicators and red flags, while its data-driven and transparent approach to anti-money laundering and compliance has empowered more than 200 global financial institutions.

He added that Oracle’s solutions integrate seamlessly with its robust suite of financial services applications, embedding a data-driven decision-making approach that reinforces the shared goal of future-proofing the financial ecosystem through collaboration, trust and innovation.

The IFCTF 2025, organised by AICB and its Compliance Officers’ Networking Group, took place from Nov 4–6, 2025, at the Malaysia International Trade and Exhibition Centre (MITEC), Kuala Lumpur.

Supported by BNM, the Securities Commission Malaysia and the Labuan Financial Services Authority, the three-day conference brought together more than 1,200 banking and compliance professionals and over 50 global experts to explore how technology is transforming compliance, risk management and financial crime prevention.

-- BERNAMA