Muhammad bin Ibrahim: Reflection on professionalism, Hippocratic
oath and the banking industry
Remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara
Malaysia), at the 20th AICB Chartered Banker's Graduation and Awards Ceremony, Kuala
Lumpur, 13 May 2017.
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Thank you for the opportunity to speak at the 20th AICB Chartered Banker's Graduation and
Awards Ceremony. My congratulations to the 1,062 graduates who have been certified across 15
qualifications. Today, you join the ranks of the over 18,600 banking professionals in the nation.
Your graduation is not only an important step in your own careers, but also contributes to our
shared aspirations of elevating the banking profession towards greater heights.
When we reflect about professionalism, the medical profession often comes to mind for its
dedication, devotion, care and interest for society. Over 2,000 years ago, the Hippocratic Oath
was first introduced to the world. Today, most medical school students profess some form of the
oath upon graduation.
While written in antiquity, its principles are held sacred by doctors to this day. Its words have
evolved with history. But its message remains the same: treat the sick to the best of one's ability,
preserve patient privacy, teach the secrets of medicine to the next generation, and much more.
What is interesting is not the oath itself, but the principles it expounds and the deep philosophical
values that have firmly grounded the medical profession over the years. With it has also come an
unwavering sense of identity, ethics and purpose for medical practitioners.
The numbers are equally telling. Polls such as Gallup and Ipsos have consistently ranked
doctors among the most competent and ethical professionals worldwide. In 2016, 65% of people
surveyed believed that medical doctors had either a high or very high level of honesty and ethical
standards. The corresponding number for bankers was a mere 24%. A sad reflection of the state
of affairs in the banking industry.
We trust doctors with the most intimate details of our health problems, complications and
issues. We adhere to their instructions and advice, often assuredly and willingly. Few
professions enjoy such stature, respect and trust. This is the epitome of professionalism.
Professionalism matters. Like the medical field, professionalism ought to form the cornerstone of
the banking sector. It can be fostered. It should be practiced. And above all, it must be earned. As
intermediaries in the economy and guardians of public funds, banking sector cannot hope to
perform its role effectively if the respect and trust of the people is not earned.
As we commemorate this graduation today, there's no better time to ask ourselves what it
means to be a professional banker. Drawing from the medical profession and the Hippocratic
Oath, let us ponder on the traits to guide our pursuit of developing high calibre and trustworthy
bankers, and professionalising the banking industry. Three traits come to mind; Competence,
Character and Calling.
The first is Competence. Competence is a prerequisite of any professional - indeed, the promise
to perform to the best of one's ability is the first line of the Hippocratic Oath.
In other fields, including medicine and law, the competency standards and pathways to
qualification are often developed by the relevant professional bodies. For the banking sector here
in Malaysia, we have made significant progress to professionalise the banking industry with the
establishment of the Asian Institute of Chartered Bankers (AICB), Asian Banking School and the
roll-out of the Chartered Banker qualification. This initiative charts a clear pathway towards
developing higher levels of technical proficiency and specialisation within our profession.
The AICB saw its pioneer batch of 45 graduates in 2015. This is a very good start. It lays the
foundational bedrock for professionalising the banking industry. In fact, several accredited
specialised programmes for the industry were introduced including the ones offered by AICB.
Together with the Chartered Banker Qualification, the creation of specialised training and
certification will further strengthen the required technical competencies and professional
standards for the banking sector. Over time, financial institutions should give due recognition to
these professional qualifications with clear linkages to bankers' career advancement.
As we move forward, we need to introduce steps that will further accelerate the move towards
professionalising the banking sector:
1. Firstly, in line with existing practice for the credit, compliance and treasury functions, key
personnel in other critical functions will also be required to acquire the appropriate
specialised qualifications to better equip themselves in performing their respective functions.
For example, staff who are involved in the development of internal models or those that carry
out penetration testing to address cyber threats shall undergo specialised training and
certification in the relevant fields to ensure effectiveness in discharging their role. To ensure
smooth implementation, the industry is expected to work with AICB and the regulators to
jointly develop the curriculum and a working timeline for implementation.
2. Secondly, to ensure that adequate attention is accorded to quality training and human capital
development, the Bank will extend its supervisory oversight to review the quality of staff
training expenditure. Capacity and capability development will be reinforced through
qualification-based training and certification provided by professional bodies such as AICB.
In this respect, the Board of financial institutions shall devise appropriate incentive structures
to promote such programs by according appropriate weightage in the performance appraisal
of senior management, including the chief executive officers.
3. Thirdly, I wish to lend my support to a proposal, that sometime into the future, all reporting
submissions made by banks to Bank Negara Malaysia are to be undersigned by a Chartered
Banker. This practice is not new. It is akin to the insurance industry where qualified actuaries
are required to certify certain submission to the central bank. This idea came from a senior
banker amongst us. With this requirement, my wish is that it will provide an impetus to the
attainment of the chartered banker qualification.
Second is Character. If competence represents the 'head' of a professional banker, then
character must surely be the 'heart'.
Over the last decade, the ethical scorecard of the financial sector was blemished by
irresponsible risk-taking and opaque practices of bankers in the lead up to the global financial
crisis. Ethical lapses and conduct failures in more recent years have compounded matters.
Far too often, we witness the rise of bankers who are highly competent but ethically deficient.
Worse, we allow and tolerate such practices. This is unsustainable. It also tarnishes the
reputation of the many who spent their lifelong careers in the industry, and who hold the
profession with great dignity and regard.
Another principle worth attention in the Hippocratic Oath is the adage, "Do no harm". There is a
lot of richness in this ethos. It is worth emulating. Considering that consumers come into contact
with banking personnel far more frequently than they visit their doctors, one may even argue a
higher expectation ought to be applied for the banking industry.
The Bank has actively worked towards reinforcing this objective over the years. The Bank
believes that when the right set of fundamental principles is followed, it can positively shape the
actions and behaviour of people. Therefore, the Bank, in consultation with the industry, is due to
publish five universal 'Principles for a Fair and Effective Financial Market'. These five Principles
encapsulate values that are crucial for the well-functioning of Malaysia's financial market such as
professionalism, integrity, transparency, competition and good internal governance.
In addition to this, the Bank also enhanced standards for corporate governance, strengthened
requirements for KLIBOR rate setting and introduced a Code of Conduct for the Malaysian
Wholesale Financial Markets. These are a few recent examples of initiatives aimed at promoting
greater professionalism, integrity and quality service to the public, consistent with the Hippocratic
Oath to 'Do no harm'. To add seriousness in upholding ethical standards and integrity, beginning
1 January 2018, a strengthened transparency framework for our enforcement actions will also be
introduced to serve as an added deterrence against misconduct.
The recent findings published by the Financial Services Professional Board, based on a 2016
survey of Malaysian banking professionals, are sobering. 23% of respondents observed that
supervisors reward behaviour derived through unethical means. Another 15% expressly stated
that they would act unethically when not being watched or monitored. These disheartening
results are a clear manifestation that our journey is far from over and that, much more needs to
be done to further strengthen the character within the banking community.
There are economic consequences related to ethical choices. It is not a subject of discussion
reserved only for the morally enlightened. The consequences are real. They can be dire and they
can be expensive. The 2008 financial crisis alone cost the U.S. economy more than USD22
trillion. Misconduct costs by banks globally have exceeded USD320 billion since 2008, with
USD42 billion incurred in 2016 alone.
At the institutional level, there should be a 'clear tone from the top' that unethical behaviour will
not be tolerated. This culture of 'zero tolerance' for unethical behaviour should permeate across
all levels of the organisation, including in the process of recruitment, retention and remuneration.
As a community, we cannot possibly expect ethical behaviour to be burnished if we persist in
retaining, hiring or rewarding people who had acted otherwise.
Our work environment should also evolve, making it conducive and safe for individuals to speak
up on ethically questionable practices. Encouraging conversation about ethical behaviour in the
workplace can go a long way in empowering all layers in the organisation to serve as an ethical
beacon. This can significantly reduce the probability and occurrence of unethical conduct.
The third is Calling. We should marvel at the deep sense of purpose and identity contained in the
medical profession. One sentence in the modern version of the Hippocratic Oath is particularly
resonating:
"I will remember that there is art to medicine as well as science, and that warmth, sympathy, and
understanding may outweigh the surgeon's knife or the chemist's drug."
Ultimately, to make sense of what we do in our profession, we cannot shy away from its
purpose. To echo the words of the poet William Butler Yeats: "Though the leaves are many, the
root is one." As a community of bankers, we should have one overriding root purpose - to serve
and steward our community. The services we offer are to serve the larger interest of the
community. We do not originate a loan merely to meet business targets, but to enable individuals
to own homes, businesses to create jobs and for overall societal wellbeing
Finance exists for society, not society for finance. We can no more detach ourselves from this
social purpose than we can separate humanity from humans. It ought to be an inherent part of
us, our profession's DNA.
This sense of identity and purpose should ground all our pursuits. It is also the thread that ties all
functions of banking together. Whether you are in the credit, compliance, IT, risk management or
audit functions, you share a common purpose to society and duty to serve the public interest.
As we reflect back over the centuries, the first banks in the ancient world made grain loans to
farmers and traders who travelled between cities. During the 15th - 18th century, banks also
catalysed the financing of international trade, subsequently ushering in a new age of maritime
discovery and exploration. The banking world then served the real needs of the economy.
However, the creeping commodification of finance over the years has gradually blurred the
nature of finance, with excessive risk accumulation driven by greed and perverse incentives.
Serving the needs of the real economy is key. That is why issues such as financial inclusion,
financial literacy and financial planning are so important to us as our nation progresses. As
professional bankers, we should think beyond profits and understand how to meet the evolving
needs of the economy. Like the medical profession, we cannot begin to prescribe a solution
without first diagnosing the needs of the customer.
As an industry we should aspire that one day, consumers may walk into a bank, safe in the
knowledge that bankers will always have their best interest in mind. That each encounter with the
consumer is viewed not as opportunities to extract value, but as a privilege, to contribute towards
financial wellbeing of the community we serve. It is an aspiration worth pursuing.
Closing remarks
Let me conclude. Like the physicians, my hope is that as bankers we will always uphold the high
standards expected of our profession. Like the physicians oath, an old banking maxim used
centuries ago reads "my word is my bond". Our knowledge of bonds and financial instruments
may tell us what we know. But our bonds to society tell us about our existence.