Minister Urges Trust in AI

Kuala Lumpur July 8: Malaysia’s financial sector must ensure trust remains at the heart of banking as artificial intelligence reshapes the industry, with the greatest threat coming not from machines themselves but from people being manipulated into making the wrong decisions, Finance Minister II Datuk Seri Amir Hamzah Azizan said.
Delivering the keynote address titled AI, Trust and the Future of Finance at the Malaysian Banking Conference and Bank Audit Conference (BAC) at the Kuala Lumpur Convention Centre today, Amir Hamzah said AI was transforming every aspect of banking, from lending and fraud detection to cybersecurity, compliance and customer engagement.
However, he stressed that technology alone could not safeguard the financial system.
“AI is a tool — powerful, transformative, but ultimately dependent on human judgement and oversight. The more intelligent the ledger becomes, the more vigilant we must be in safeguarding it against emerging risks and vulnerabilities.”

Scams are a trust failure

Amir Hamzah said the rise of financial scams demonstrated that the biggest vulnerabilities often lay not in technology but in human behaviour.
According to Bank Negara Malaysia’s 2025 Annual Report, Malaysians lost RM2.8 billion to financial scams in 2024, with 95 percent of cases involving authorised transactions in which victims were manipulated into transferring money themselves.
“This is not a technology failure. It is a trust failure.”
He said scams had become increasingly sophisticated through social engineering, mule accounts, phishing, impersonation, synthetic identities and AI-generated deception, requiring banks to strengthen fraud detection, authentication systems and customer protection.
“And it tells us something crucial: the greatest risk in an AI-enabled financial system is not necessarily the machine making wrong decisions. It is the human being manipulated into making the wrong one.”

Trust remains banking’s foundation

Using the evolution of the banking ledger as a metaphor, Hamzah said banking had always been built on trust rather than technology.
He noted that while ledgers had evolved from paper records to cloud platforms, payment systems and AI models, the underlying principle had not changed.
“A ledger was never merely a book of numbers. It was a record of trust.”
“It is no longer bound in paper or confined to branches and vaults. It sits in cloud systems, payment rails, mobile applications, risk engines and artificial intelligence models. It moves faster than any human hand can write.”
“Whatever form the ledger takes, one thing must remain constant: Trust.”
He said banking, audit, compliance, governance, technology and talent could no longer be treated as separate disciplines because they collectively underpin confidence in the financial system.

Economic reforms underpin confidence

The minister also highlighted Malaysia’s recent economic progress, saying the government’s reform agenda had strengthened investor confidence despite growing geopolitical uncertainty.
He pointed to improvements in the country’s fiscal position, inflation, investment performance and international competitiveness, noting that approved investments reached a record RM426.7 billion in 2025 while Malaysia climbed from 23rd to 15th place in the IMD World Competitiveness Ranking.
“Each figure is not a trophy. It is a posted entry. Proof that the account is being managed, and that reform is not merely a slogan. It is a foundation upon which greater confidence and durable prosperity can be built.”
He said banks played a central role in translating reforms into investment, productivity and long-term economic growth by financing businesses, infrastructure, housing and industrial expansion.

Governance must keep pace with AI

Hamzah welcomed the AI Governance Framework developed by AICB’s Chief Risk Officers’ Forum with Bank Negara Malaysia’s support, describing it as an example of industry-led governance rather than regulation imposed by government.
“It is not Government telling banks how to use AI. It is the banking profession governing itself. That is how trust is built from within a system, not merely imposed upon it.”
He said internal audit, risk and compliance functions should no longer be viewed as barriers to innovation but as essential components of the trust architecture needed to govern AI responsibly.

People remain at the centre

Despite rapid advances in AI, Hamzah said banking would always remain a people-centred profession.
“The question they cannot answer for us is the oldest one in banking: who do we serve, and how well are we serving them?”
He said the financial sector would increasingly need professionals who understood finance, data, behavioural risk, sustainability and ethics, but above all recognised that every transaction ultimately involved a person rather than simply a data point.
Concluding his address, Hamzah said technological progress should never come at the expense of trust.
“When we speak of the future of finance, it is easy to be drawn to the language of speed: faster payments, faster approvals, faster analytics, faster decisions. But speed is only one measure of progress. A financial system must also be fair, secure and trusted.”
“The ledger may now be digital, automated and intelligent. But its oldest entry remains unchanged: trust.”