The use of mobile applications has also made it much more convenient for individuals to monitor and control financial habits, in addition to helping consumers make financial choices. This has also enabled resources to go further by significantly expanding the reach of financial capability initiatives, and increased its potential to create a more lasting impact on financial behaviour. In Malaysia, initiatives to strengthen financial capability began almost 20 years ago and is an important component of the Bank’s business conduct and financial inclusion responsibilities. The Bank has in collaboration with the Ministry of Education and the financial industry, implemented financial education in schools to promote financial capability skills from an early age. This has now culminated in a process of formally integrating financial education elements into key subjects in the school curriculum. Financial capability programmes among adults are closely aligned to the nature of financial decisions and exposure that individuals are likely to be confronted with at the different stages of their lives. This has therefore shaped the content, approach and timing of our financial education programmes. Of significance, has been the involvement of the private sector, through initiatives such as financial education in the workplace which are organised by large corporates in collaboration with the Credit Counselling and Debt Management Agency in Malaysia. The enabling infrastructure is also being enhanced to provide financial consumers with an integrated platform for easy access to financial education contents that are relevant for financial decision making.

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.