GENERATIVE AI COULD UNLOCK US$113.4 BLN WORTH OF PRODUCTIVE CAPACITY- AICB

The banking sector is looking closely at the opportunities offered by generative artificial intelligence (GenAI) as it has the potential to unlock US$113.4 billion in productive capacity in the Malaysian economy.

The Asian Institute of Chartered Bankers (AICB) chairman Tan Sri Azman Hashim said the financial sector has always been a pioneer in technological innovation, and the banking sector has been using AI in its value chain for some time.

“We, as stewards of the country's financial health, recognise the pivotal role that the banking industry plays in building the nation's burgeoning digital economy,” he said in his welcome address at the Malaysian Banking Conference 2024: Banking in the Era of GenAI - Reshaping Banking, Innovating for the New Economy, and Accelerating Sustainability.

Organised by AICB and the Association of Banks in Malaysia (ABM) from 10th to 11th July, 2024, the conference sought to facilitate deeper conversations on the transformative potential of GenAI in shaping the future of banking.

The conference highlighted GenAI's role in elevating Malaysia's financial sector to the next level and how banks could embrace and scale GenAI responsibly, transitioning from experimentation to delivering powerful digital transformations across banks' operations and supporting a just transition.

With these developments comes the need for future-fit banking talents with the skills and knowledge to drive an AI-powered just transition, he said.

Azman also said the institute will launch courses on environmental, social, and governance, digital, and AI themes to support the industry's capacity-building needs.

He said the Future Skills Framework (FSF), an initiative led by AICB with the Islamic Banking and Finance Institute Malaysia and the Malaysian Insurance Institute will be launched on 22nd July.

“The FSF is a pivotal component of Bank Negara Malaysia's Financial Sector Blueprint 2022–2026 and aims to propel skills mastery and constant learning across the financial sector talent ecosystem, fostering a future-ready workforce, and advancing Malaysia's financial industry,” he said.

The Malaysian Banking Conference 2024 drew over 600 delegates from local and international financial institutions.

A masterclass and a media roundtable facilitated deeper conversations on the trends, risks and opportunities in harnessing the power of GenAI in banking and the importance of future-proofing Malaysian banking practitioners in this digital era.

"The dynamic discussions and informative presentations provided delegates with valuable insights on how financial institutions can embrace and scale GenAI responsibly, harnessing the power of GenAI to create value for institutions, enhance customer experience, improve productivity and elevate operational efficiency.

"GenAI should, therefore, form part of financial institutions' core business strategy, and not be treated as a separate technology or digital initiative," said ABM chairman Datuk Khairussaleh Ramli.

Meanwhile, Digital Minister Gobind Singh Deo said financial institutions must look at three important issues – infrastructure, cybersecurity, and upskilling or reskilling – when using new technologies like AI.

"Secondly, with a good infrastructure, we have to make sure it is secure. Finally, we have to ensure that the workforce knows how to use the infrastructure," he told reporters on the conference sidelines.

“This infrastructure is very important. Without it, we cannot connect with customers and make transactions online,” he said.

He said the banking sector workforce must know the challenges posed by this new technology which impacts certain job clusters and the public has to accept the importance of the digital economy to the country because it will contribute enormously to gross domestic product (GDP).

"Malaysia needs to be prepared because we are competing domestically, with ASEAN countries and globally,” he said.

“We can achieve the digital economy's targetted 25.5% contribution to the GDP by the end of next year. I think we can reach a larger figure than that," he said.

On cybersecurity, he noted that his ministry tabled the first reading Personal Data Protection Act (Amendment) Bill 2024 in the Dewan Rakyat.

The amendment aims to increase the penalty to RM1 million from RM300,000 for offences committed by data controllers or data processors violating personal data protection principles, he explained.

The second reading will also be tabled at the current Parliament session, which proves the government's commitment to cybersecurity and the protection of personal data, he said.