The Bank assesses all major financial education programmes to evaluate their effectiveness in meeting the intended objectives through a Financial Education Assessment Framework. The Framework, developed in 2013, assesses the impact of financial education programmes on the overall level of financial literacy and on changes in behaviour. Mobile applications have also been introduced to promote more informed financial decisions. These includes applications for personal money management, updates on important consumer news including financial fraud alerts issued by the Bank, and for consumers to make enquiries, obtain advice and raise their complaints with financial institutions. These mobile applications are customised for use in Malaysia and can be downloaded by individuals at no cost. It is envisaged that wider use of these applications will contribute towards enhancing financial competence. The financial education initiatives in Malaysia has been advanced through collaborative efforts by the public and private sectors. Key agencies involved have included the Credit Counselling and Debt Management Agency, the financial industry, consumer associations and the Employees Provident Fund (which has more than 14 million contributors) to ensure that messages on financial management address all the key issues in savings, debt, BIS central bankers’ speeches  3  investment and protection. These strategies are pursued together with the efforts to promote financial inclusion and to ensure fair treatment of financial consumers. It is important to recognise that the financial industry itself plays a pivotal role in helping consumers improve their financial well-being.

While measures to reduce financial exit costs have met with some success in reducing switching barriers within the financial industry, responding to other factors that discourage consumers from switching to a superior product or financial service has been more challenging. Such factors include the additional effort required to switch financial service providers or products arising from the higher marginal cost of switching. Finally, the measures to strengthen redress mechanisms are also contributing to the enhanced capability of financial consumers, by providing an expedient and cost–effective means for consumers to assert their rights and protect their interests. Effective redress mechanisms also increase consumer confidence in using financial services, while serving to strengthen market discipline. Looking ahead, strategies to further strengthen these foundations are likely to be significantly influenced by two important developments. The first is the broader application of behavioural finance so as to better understand and identify the levers that contribute to better financial decisions in the different circumstances. Recent insights from the study of behavioural finance suggest that emotional and psychological associations with finance are as powerful as the intellectual grasp of how to make wise financial choices. This will have important implications for the design and implementation of both consumer protection policies as well as financial capability strategies. We have found that providing consumers with relevant information in Malaysia did not always lead to better decisions. This was frequently because it was not easy to understand the information and there was also too much of it.