The Central Bank of Malaysia (“BNM” or Bank Negara Malaysia) has issued a discussion paper outlining its proposed approach and views on the development and adoption of artificial intelligence (“AI”) in the financial sector, and is inviting public feedback.
As the financial sector increasingly embraces and integrates AI into its operations, BNM’s discussion paper outlines its position and regulatory approach, and considers how the current framework may need to evolve to address emerging developments, challenges, and risks.
The paper is exploratory in nature and aims to initiate an open dialogue on the state of AI adoption, related challenges and areas for industry-wide collaboration. BNM has also expressed willingness to facilitate regulatory discussions with industry stakeholders to proactively shape the sector’s AI regulatory framework.
At this stage, the regulation of AI remains at a relatively infancy stage globally, with authorities across sectors and jurisdictions still determining the most effective approaches. This discussion paper represents BNM’s initiative to shape the sector’s response to emerging AI use-cases and their associated risks.
Therefore, stakeholders in the financial sector, including financial service providers, industry associations, technology service providers, and other interested parties, are encouraged to review the paper and provide feedback on the issues raised. The consultation process may help shape the future direction of AI regulation in Malaysia’s financial sector.
BNM’s official public announcement and the full discussion paper are available here. The public consultation period runs until 17 October 2025.
We will be issuing a more detailed update on the discussion paper’s key points in due course.
This Alert is issued by the Contact Partners from the Technology, Media & Telecommunications, Data Privacy & Protection Practice Group whose contact details are set out on the right column of this page.
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