According to the IMF in its policy paper on Strategy Toward Mainstreaming Gender, published in July 2022, reducing gender disparities in opportunities, outcomes, and decision-making roles raises economic growth and enhances macro-financial stability.  The IMF added that, there have been growing evidence that a country’s economic growth and macroeconomic resilience increases with greater participation of women in the economy or in other words, women economic empowerment.  It is my honour to be here today to speak at this Women Empowerment Conference on the topic “Fostering Diversity and Inclusion in Financial Services”. This topic is not only timely but also crucial as we strive to build a dynamic, sustainable and resilient economy. 

Ladies and gentlemen,

Women participation in the financial sector is critical as the financial sector, by providing financial services, is the core of our economy. The financial sector is the anchor that will support and fund the nation’s economic transformation and has a key role in elevating the financial wellbeing of all households and businesses.

For the financial sector to be truly effective in promoting transformative and sustainable economic growth, financial services by the sector must be aligned and calibrated to reflect the diverse needs of the society they serve. The financial sector must therefore strive to be one that is both dynamic and inclusive.  This means ensuring that women, minorities, and other under-represented groups have both access to financial services and for them to also have fair and meaningful representation within the financial industry.

Today, I wish to firstly focus on the important role women play in fostering an inclusive and dynamic financial sector and secondly, the role of the financial sector including the central bank in promoting greater diversity and thus, facilitate women participation and empowerment.

I will share some of Bank Negara’s experience and the strategic initiatives we are undertaking to foster a more inclusive financial system.  I will end with a call for action for the insurance industry, focussing on how the industry can foster diversity and inclusion.

A. Setting the Context – Key Data on Women in Malaysia

Let me begin by outlining the progress of both women economic participation and financial inclusion in Malaysia.   Despite high enrolment rates for women in primary, secondary, and tertiary education, Malaysia ranks only 13th out of 19 East Asia and Pacific countries in the 2023 Gender Gap Index. Women face lower economic participation and opportunities, with a labour force participation rate of only 56.5% compared to 83% for men.

In terms of total employment, women make up 38.9% of total employment, with the largest share of women being employed in the services sector.  In the finance and insurance industry, the share of women is significantly higher, at 52.1% of the total workforce in the industry. 

However, women generally earn less than men for similar roles, and this gender pay gap persists.  In 2019, overall women’s wages were 2.0% lower than overall men’s wages. For the finance and insurance industry in particular, women’s wages were 13.4% lower than men’s wages.  Post-pandemic, in 2022, the gender pay gap remains and only decreased slightly. Overall women’s wages were 1.2% lower than overall men’s wages. For the finance and insurance industry in particular, the gender gap has also decreased.  However, it remained high at 8.9%.

While women hold about 37% of senior management roles in the public sector, the number is much lower at 25% in the private sector. In the top 100 public listed companies on Bursa Malaysia, women occupy approximately 17.7% of board positions, and only about 15% of the seats in the Malaysian Parliament are held by women.

In terms of financial inclusion, while there is no significant gender gap in account ownership, with 98% of women owning deposit accounts compared to 97% of men, there is room for improvement in women access to other financial services. Only 20.6% of micro, small and medium businesses (MSMEs) are women-owned, and women’s loan ownership is slightly lower at 40% compared to men at 43%.

These data points highlight both progress and ongoing challenges in achieving gender equality and women empowerment in Malaysia.

B. Role of women in fostering an inclusive financial sector

Ladies and gentlemen,

Let me now highlight the important role women play in fostering an inclusive and dynamic financial sector.  According to a study by McKinsey, companies that are diverse and inclusive are better able to respond to challenges, attract top talent, and meet the needs of a diverse customer base^[1].

Diverse teams bring a variety of perspectives and experiences, and they tend to be more successful at solving complex tasks and issues.  Heterogenous teams also foster creative thinking and innovation, which leads to the development of new products and services catering to a broader customer base. In financial services, where innovation is crucial for competitiveness, diversity provides a significant advantage.

Inclusive teams also make more informed and effective decisions, enhancing risk management and strategic planning. Additionally, a diverse workforce can better understand and serve a wide-range customer base, tapping into underserved markets, improving customer satisfaction, and driving growth. This ensures that financial services are accessible to everyone, regardless of their background.

Inclusive workplaces tend to have higher employee engagement and morale. When employees feel valued and respected, they are more likely to stay with the company, reducing turnover and associated costs. This is particularly important in financial services, where attracting and retaining talent is critical.

Companies that prioritise diversity and inclusion are viewed more favourably by customers, investors and the public and this enhances their reputation, contributing towards business competitiveness and the ability to attract top talent. Studies show that these companies also tend to perform better financially due to the varied perspectives and problem-solving approaches that diverse teams bring. In financial services, where innovation, risk management, and customer satisfaction are key, the benefits of diversity are particularly pronounced.

Studies have also shown that firms with a significant share of women in senior leadership positions outperform those that are not because of some leadership behaviours that women exhibit more consistently than their male colleagues.  A study published in the Harvard Business Review, revealed that women leaders exhibit compelling vision for their firms, often act as role models and excel at developing talents and pipelines, and all these are key drivers of financial performance^[2]. 

Thus, by fostering diversity and inclusion, with a material presence of women in position of leadership and decision-making, financial services providers can build stronger, more resilient organizations that are better equipped to navigate the complexities of the modern business environment and meet the evolving needs of their customers.

C. Role of the Financial Sector in promoting diversity and inclusiveness

Ladies and gentlemen,

My second focus is on the role of the central bank and financial sector in promoting greater diversity, in particular, in harnessing women’s role and contribution. At Bank Negara, we are deeply committed to fostering a diverse and inclusive workplace. Our ethos emphasizes merit and equal opportunities for all, and these are embedded in the thrust of our people’s policy.

Our objective is to attract and inspire the best talent to central banking and public policy.  We want people with diverse ideas, willing to challenge and debate and we want them to feel empowered, at all levels, to take the initiatives and push boundaries. Hence, our policies and initiatives focus closely on what drives performance, factor that differentiates talent, what motivates the right behaviours and, measures to manage and minimise the barriers to success.

The focus on these policy thrusts is paying off.  As a result, we have achieved a balanced representation of women and men across the Bank.  Within the Bank, almost half (48%) of department heads are women, and almost two thirds (or 62%) of the central bank critical departments which are focussing on our core mandates of monetary and financial stability are being led by women leaders. The significant female representation at higher levels of decision-making highlights the effectiveness of our supportive policies and initiatives in retaining and progressing female talent.

Let me share some of these key policies and initiatives practiced at the Bank that underscore our commitment to diversity, inclusion, and gender equality in the workplace. These measures ensure that all employees can thrive and advance in their careers while maintaining a healthy work-life balance.

Transparent Merit-Based Rewards and Career Progression

First, the key thrust of Bank Negara’s talent policy is one of a merit-based rewards and career progression.  Our hiring, rewards, and promotion practices are transparent, focusing on individual merit and therefore, gender neutral. Both men and women are compensated equally for comparable jobs, thereby fostering fairness and equity within the workplace. In 2023, competent and capable women made up 55% of the promotions to mid-Managements across the Bank, reflecting equal opportunities for advancement.  

Inclusive Career Development Opportunities

Second, an equally important key policy thrust in people management is our strong focus on career development.  The Bank provides opportunities for all employees to be part of the leadership pipeline and programmes, and for them to engage in cross-sectoral projects and international assignments, as well as mentorship and coaching opportunities.

Almost half of our leadership pipeline comprise of women and our inclusive approach is also reflected in our Structured Leadership Programme for Mid-Management with 56% participation from women. Additionally, 69% of the internally certified coaches are women. This serves as an additional avenue for women in Bank Negara to receive the appropriate guidance and mentorship required to deliver their work effectively.  Furthermore, 46% of our staff engaged in post-graduate studies are women, underscoring an inclusive investment in long-term career growth.  

Comprehensive Supportive Work Environment

Third, the Bank maintains a strict zero-tolerance policy towards harassment, ensuring a safe and respectful workplace. The establishment of a dedicated Ethics and Integrity Office underscores our commitment to the highest standards of ethical behaviour. At the same time, we recognise that in ensuring staffs’ wellbeing, these extend beyond providing the traditional healthcare benefits.  As such our support include mental wellness programs and confidential counselling services to all staffs. 

Enhanced Flexible Working Arrangements

Fourth, flexible working arrangements are a cornerstone of our strategy to meet the rising demand of today’s employees.  These arrangements which are enhanced in the wake of the pandemic, include flexible hours and the option for remote work.  These enable staffs to undertake multiple roles and tailor their schedules to their family or lifestyle needs.  We acknowledge the evolving dynamics of shared domestic responsibilities and extend these flexibilities to all employees, irrespective of gender, aiming to retain talent and allow staffs to thrive without having to choose between personal needs and their career.

Promoting Women Empowerment and Growth in the Financial Sector

Ladies and Gentlemen,

Now, turning to the financial sector.  In June last year, Bank Negara published the Financial Inclusion Framework 2023–2026. This framework clearly sets out our vision, desired outcomes, policy objectives, and strategies for advancing financial inclusion holistically. It incorporates a cross-cutting theme of gender considerations to ensure that barriers and challenges are identified and addressed effectively.

The Bank co-leads with the Financial Education Network (FEN) which is an inter-agency platform comprising of institutions and agencies committed to improving the financial literacy of Malaysians - to prioritise women's financial empowerment through targeted awareness outreach programs for women micro-entrepreneurs and women from the lower income group and other vulnerable segments. 

In collaboration with the government and the insurance and takaful sectors, the social protection for the lower-income group was expanded. Under the Perlindungan Tenang program, lower income households can purchase simple and affordable insurance and takaful plans with a convenient claims process. The Perlindungan Tenang initiative aims to expand the availability and quality of insurance and takaful solutions to meet the needs of the unserved and underserved segments of the population to promote their financial and social resilience.  Further to this, we have provided five new banking licenses, in the form of digital banks, with precisely the objective of enhancing access to financial products and services to the unserved and underserved segments.

As a matter of policy, in evaluating new investments into the sector, a key consideration is the value proposition an investor brings to support better outreach of financial services. This includes prioritising investments which promote the introduction of new products and channels targeting the underserved, reducing costs, enhancing value, as well as those which incorporate and support impactful education and awareness strategies.

D. Call for Action to the Insurance Industry

Ladies and gentlemen,

It is essential to reflect on the progress we have made and the journey that lies ahead in promoting women's empowerment in the financial sector. The Bank remain steadfast in our commitment to fostering an inclusive financial sector that not only empowers women but importantly contributes to the broader economic and social development of our nation.

Through our Financial Inclusion Framework 2023–2026, we are dedicated to addressing barriers and ensuring that gender considerations are integrated into our policies and strategies. Our collaborative efforts in financial education with the Financial Education Network are equipping women with the knowledge and skills they need to thrive financially. The introduction of digital banks and initiatives like Perlindungan Tenang demonstrate our commitment to making financial services accessible to all, particularly the underserved.  Product innovation and attracting investments that align with our goals of expanding outreach and reducing costs further underscore our dedication to inclusivity and growth.

I, therefore, call on the insurance industry to demonstrate full support for this agenda of mainstreaming gender and diversity within the insurance industry:

Firstly, develop and implement strategies, business plans, and significant policies that embed diversity and inclusivity philosophies and principles.

Secondly, establish clear corporate values and set diversity goals and metrics to promote a culture of diversity, equity, and inclusivity.

And thirdly, aim to develop innovative, specialised, and tailored insurance products or financial solutions that cater to the needs and requirements of vulnerable segments, including women and women-owned businesses.

I urge all stakeholders in the financial sector to join us in this mission. By working together, we can create a more inclusive financial sector that not only supports but actively empowers women. 

In closing, let me leave you with a quote from Kofi Annan, and I quote, “When women thrive, all of society benefits, and succeeding generations are given a better start in life”.  With this quote, I wish all of you, the women of today’s financial industry to continue to thrive and be purposeful, and no doubt, this will be of immense benefit to the future generations of Malaysia. Thank you.

^[1] http://www.mckinsey.com/business-functions/organization/our-insights/why-diversity-matters

^[2] https://hbr.org/2012/03/a-study-in-leadership-women-do