15-07-2008
KUALA LUMPUR: The Ministry of Finance (MOF) has appointed Datuk Tajuddin Atan as public interest director (non-executive director) of Bursa Malaysia Bhd.
Tajuddin is also president and group managing director of Bank Pembangunan Malaysia Bhd, where he was appointed to the board on Dec 1, 2007.
Bank Pembangunan is a development financial institution owned by the government through the MOF and is mandated to provide medium- to long-term financing for capital-intensive projects in infrastructure, maritime and high-technology sectors.
Tajuddin is also a director of Global Maritime Ventures Bhd, Global Carriers Bhd and Malaysian Bulk Carriers Bhd.
He was managing director of Chase Perdana Bhd from 2001 to 2004 and chief executive officer of Bank Simpanan Nasional from 2004 to 2007. He has also worked in Bumiputra Commerce Bank Bhd, where his last position was senior vice-president.
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_24957e84-cb73c03a-4788d500-aef1a64a
Wednesday, July 16, 2008
Tuesday, July 15, 2008
Financial planning the order of the day
Tuesday July 15, 2008
Players say it’s key to insurance peneration amid challenges
PETALING JAYA: Strong emphasis on financial planning is all the more needed to improve the local penetration rate of insurance given the unfavourable economic climate, according to industry players.
Manulife Insurance (M) Bhd president and chief executive officer Peter Roberson said lack of knowledge on insurance was not the reason for the low penetration rate, rather how products were distributed.
“If distributors approach their customers from a financial planning perspective in a professional manner, then customers will be better educated on their needs and more prepared to accept solutions to address those needs.
“Once we can move agents towards practising financial planning, there will be greater awareness on the benefits of insurance among the public. But, to be effective in providing proper financial planning service, one needs to be full-time and professional in the manner he conducts his business,'' he said in an interview.
According to Robertson, distributors have to change their mindset from product pushing to one that focuses on needs-based approach.
What this meant, he said, was instead of seeing a customer to sell a product, the distributor would conduct a proper financial planning analysis before proposing a suitable product.
A spokesman from a general insurance company who shared similar views said currently agents still lacked financial planning skills and there was an urgent need for them to upgrade their skills to ensure products were sold in accordance with customers' needs.
“Although there are programmes and training on financial planning, there are agents who still push products ather than analyse their customers' needs. A change in mindset is crucial here,'' he noted.
Life Insurance Association of Malaysia (Liam) president Ng Lian Lu said the percentage of the population insured last year was about 40.1% and, to enhance the penetration rate, continuous education on the importance of life insurance as one of the wealth management tools was needed.
Ng said a study conducted by US-based Life Insurance Marketing and Research Association International on consumer attitudes and buying behaviour between December 2006 and January 2007, showed the majority of consumers did not understand how life insurance worked, nor did they realise the value of financial planning.
“Therefore, the challenge for the industry is to create branding and educational campaigns to show the value of life insurance and financial planning by utilising a variety of mass media channels in order to reach different segments of the market,” he said.
“In addition, the industry has to provide continuous training and education to the agents to develop the skills necessary to meet the policyholders’ needs.”
Ng said with effect from January 2004, all agents were required to attend a minimum of 30 continuing professional development (CPD) hours each year to maintain their agency contracts.
The CPD framework is a comprehensive training guide covering the different types of training that each level of agency force should pursue.
“The industry is doing its best to enhance the skills of agents on financial planning. Liam continuously works with the Malaysian Insurance Institute, the Malaysian Financial Planning Council and the National Association of Malaysian Life Insurance Financial Advisors to develop new training programmes for the agency force,'' he said.
Players say it’s key to insurance peneration amid challenges
PETALING JAYA: Strong emphasis on financial planning is all the more needed to improve the local penetration rate of insurance given the unfavourable economic climate, according to industry players.
Manulife Insurance (M) Bhd president and chief executive officer Peter Roberson said lack of knowledge on insurance was not the reason for the low penetration rate, rather how products were distributed.
“If distributors approach their customers from a financial planning perspective in a professional manner, then customers will be better educated on their needs and more prepared to accept solutions to address those needs.
“Once we can move agents towards practising financial planning, there will be greater awareness on the benefits of insurance among the public. But, to be effective in providing proper financial planning service, one needs to be full-time and professional in the manner he conducts his business,'' he said in an interview.
According to Robertson, distributors have to change their mindset from product pushing to one that focuses on needs-based approach.
What this meant, he said, was instead of seeing a customer to sell a product, the distributor would conduct a proper financial planning analysis before proposing a suitable product.
A spokesman from a general insurance company who shared similar views said currently agents still lacked financial planning skills and there was an urgent need for them to upgrade their skills to ensure products were sold in accordance with customers' needs.
“Although there are programmes and training on financial planning, there are agents who still push products ather than analyse their customers' needs. A change in mindset is crucial here,'' he noted.
Life Insurance Association of Malaysia (Liam) president Ng Lian Lu said the percentage of the population insured last year was about 40.1% and, to enhance the penetration rate, continuous education on the importance of life insurance as one of the wealth management tools was needed.
Ng said a study conducted by US-based Life Insurance Marketing and Research Association International on consumer attitudes and buying behaviour between December 2006 and January 2007, showed the majority of consumers did not understand how life insurance worked, nor did they realise the value of financial planning.
“Therefore, the challenge for the industry is to create branding and educational campaigns to show the value of life insurance and financial planning by utilising a variety of mass media channels in order to reach different segments of the market,” he said.
“In addition, the industry has to provide continuous training and education to the agents to develop the skills necessary to meet the policyholders’ needs.”
Ng said with effect from January 2004, all agents were required to attend a minimum of 30 continuing professional development (CPD) hours each year to maintain their agency contracts.
The CPD framework is a comprehensive training guide covering the different types of training that each level of agency force should pursue.
“The industry is doing its best to enhance the skills of agents on financial planning. Liam continuously works with the Malaysian Insurance Institute, the Malaysian Financial Planning Council and the National Association of Malaysian Life Insurance Financial Advisors to develop new training programmes for the agency force,'' he said.
Wednesday, July 9, 2008
BNM: Basel II deadline remains at 2010
09-07-2008
BNM: Basel II deadline remains at 2010
KUALA LUMPUR: Bank Negara Malaysia (BNM) has clarified that the deadline for the full implementation of Basel II risk management framework is unchanged at January 2010.
The central bank told The Edge Financial Daily that all banking institutions in the country had already started adopting the new framework since January this year and hence, there was no need for a deadline extension.
According to a mandate set by the central bank, all banks in Malaysia are required to compute their capital adequacy ratios under Basel II from January 2008.
"In addition, banking institutions adopting the new capital adequacy framework from 2008 are also subject to a capital requirement for operational risk based on either the basic indicator, standardised or alternative standardised approaches," BNM said.
An exception applies to banks that have chosen to adopt the more advanced Internal Rating Based (IRB) approach to compute capital adequacy. These banks have been given an extension until 2010.
According to a recent BNM report, most banking institutions were anticipated to experience only modest increases in their regulatory capital requirements, following the adoption of the revised capital framework.
Seven banking institutions (including four locally incorporated foreign banking institutions) had been allowed to remain under the existing capital adequacy framework (Basel I) until January 2010, in which they would be required to comply with the IRB approach for credit risk under Basel II by the stipulated deadline.
Additionally, 10 out of 12 Islamic banks had adopted the Capital Adequacy Framework for Islamic Banks, which was the revised framework that specified the standardised approach for capital computations for Islamic banks. The two remaining Islamic banks had opted to migrate directly to the IRB approach in January 2010.
The Edge Financial Daily had inadvertently reported on Monday that there was a time extension in the full implementation of Basel II framework to 2013. The report also wrongly quoted Deloitte Consulting Malaysia as saying that the deadline extension would give banks more leeway in adjusting to the complexities of the requirements.
Moving forward, the central bank said the implementation of the revised capital frameworks for the banking and insurance industries would remain as its key priority this year.
The banking institutions that have been granted approval to adopt the IRB approach for credit risk will be required to submit their internal models to the central bank for review before the models could be used to determine regulatory capital requirements.
Significant supervisory resources would be devoted to the review and validation of these models ahead of the 2010 deadline for implementation of the IRB approaches, the central bank had said.
BNM: Basel II deadline remains at 2010
KUALA LUMPUR: Bank Negara Malaysia (BNM) has clarified that the deadline for the full implementation of Basel II risk management framework is unchanged at January 2010.
The central bank told The Edge Financial Daily that all banking institutions in the country had already started adopting the new framework since January this year and hence, there was no need for a deadline extension.
According to a mandate set by the central bank, all banks in Malaysia are required to compute their capital adequacy ratios under Basel II from January 2008.
"In addition, banking institutions adopting the new capital adequacy framework from 2008 are also subject to a capital requirement for operational risk based on either the basic indicator, standardised or alternative standardised approaches," BNM said.
An exception applies to banks that have chosen to adopt the more advanced Internal Rating Based (IRB) approach to compute capital adequacy. These banks have been given an extension until 2010.
According to a recent BNM report, most banking institutions were anticipated to experience only modest increases in their regulatory capital requirements, following the adoption of the revised capital framework.
Seven banking institutions (including four locally incorporated foreign banking institutions) had been allowed to remain under the existing capital adequacy framework (Basel I) until January 2010, in which they would be required to comply with the IRB approach for credit risk under Basel II by the stipulated deadline.
Additionally, 10 out of 12 Islamic banks had adopted the Capital Adequacy Framework for Islamic Banks, which was the revised framework that specified the standardised approach for capital computations for Islamic banks. The two remaining Islamic banks had opted to migrate directly to the IRB approach in January 2010.
The Edge Financial Daily had inadvertently reported on Monday that there was a time extension in the full implementation of Basel II framework to 2013. The report also wrongly quoted Deloitte Consulting Malaysia as saying that the deadline extension would give banks more leeway in adjusting to the complexities of the requirements.
Moving forward, the central bank said the implementation of the revised capital frameworks for the banking and insurance industries would remain as its key priority this year.
The banking institutions that have been granted approval to adopt the IRB approach for credit risk will be required to submit their internal models to the central bank for review before the models could be used to determine regulatory capital requirements.
Significant supervisory resources would be devoted to the review and validation of these models ahead of the 2010 deadline for implementation of the IRB approaches, the central bank had said.
Tuesday, July 8, 2008
Basel II deadline extension to give banks more leeway
The Edge 07-07-2008
KUALA LUMPUR: Bank Negara’s recent extension of the deadline for banks operating in Malaysia to meet the Basel II capital adequacy ratio requirement to 2013 from 2010 has given banks more leeway in adjusting to the complexities of the requirement.
“It is a good decision by Bank Negara to extend the deadline to 2013. From a practical standpoint, this allows more time for the readiness of data availability, which is normally a key challenge for the banking industry.
“It also allows banks more time to gain a deeper understanding in interpreting the Basel Accord to gain competitive advantage beyond regulatory compliance by reducing capital reserves, consequently increasing capital available for investments,” Deloitte Consulting Malaysia executive director Ow Chee Hong told The Edge Financial Daily.
Basel II was aimed at creating an international benchmark for regulating how much capital banks need to put aside as security against financial and operational risks.
BNM required that all banks in Malaysia compute their capital adequacy ratios under Basel II from January 2008 but allowed an extension of up to 2010 for those that chose to adopt the more stringent internal rating base (IRB) approach.
Intelligent software solution provider SAS Malaysia, which has provided Basel II compliance software system to Affin Bank Bhd, EON bank and AmBank Bhd, said most banks in Malaysia had opted for the more stringent standard as the deadline approached.
But according to John Lee, KPMG’s head of financial risk management for the Asia-Pacific region, the lack of data and shortage of appropriate experience are the biggest obstacles to implementing the preferred Basel II approach.
Lee said that most Malaysian banks were adopting a phased approach, opting for The Standardised Approach (TSA) or Basic Indicator Approach (BIA) that is less sophisticated before considering the Advance Measurement Approach (AMA).
The Basel II Capital Accord and its implementation in Asia Pacific has placed banks in the region on a varied and disparate platform.
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_fb7cefe2-cb73c03a-1b092820-eada34d7
KUALA LUMPUR: Bank Negara’s recent extension of the deadline for banks operating in Malaysia to meet the Basel II capital adequacy ratio requirement to 2013 from 2010 has given banks more leeway in adjusting to the complexities of the requirement.
“It is a good decision by Bank Negara to extend the deadline to 2013. From a practical standpoint, this allows more time for the readiness of data availability, which is normally a key challenge for the banking industry.
“It also allows banks more time to gain a deeper understanding in interpreting the Basel Accord to gain competitive advantage beyond regulatory compliance by reducing capital reserves, consequently increasing capital available for investments,” Deloitte Consulting Malaysia executive director Ow Chee Hong told The Edge Financial Daily.
Basel II was aimed at creating an international benchmark for regulating how much capital banks need to put aside as security against financial and operational risks.
BNM required that all banks in Malaysia compute their capital adequacy ratios under Basel II from January 2008 but allowed an extension of up to 2010 for those that chose to adopt the more stringent internal rating base (IRB) approach.
Intelligent software solution provider SAS Malaysia, which has provided Basel II compliance software system to Affin Bank Bhd, EON bank and AmBank Bhd, said most banks in Malaysia had opted for the more stringent standard as the deadline approached.
But according to John Lee, KPMG’s head of financial risk management for the Asia-Pacific region, the lack of data and shortage of appropriate experience are the biggest obstacles to implementing the preferred Basel II approach.
Lee said that most Malaysian banks were adopting a phased approach, opting for The Standardised Approach (TSA) or Basic Indicator Approach (BIA) that is less sophisticated before considering the Advance Measurement Approach (AMA).
The Basel II Capital Accord and its implementation in Asia Pacific has placed banks in the region on a varied and disparate platform.
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_fb7cefe2-cb73c03a-1b092820-eada34d7
Friday, July 4, 2008
AmBank group acquires Basell II operational risk management system
The Edge
03-07-2008
KUALA LUMPUR: AmBank group has appointed LIST S.p.A, Italy as its operational risk management solutions partner for the group in preparation for compliance with more advanced approach of operational risk management under Basel II and Bank Negara Malaysia requirements.
In a statement yesterday, AmBank said the operational risk management system to be acquired, OpRisk Evolution, was part of the group’s efforts to enhance the risk management practices and meet Bank Negara Malaysia’s requirement.
It will be implemented mainly for the five major entities within the AmBank group — AmBank (M) Bhd, AmInvestment Bank Bhd, AmIslamic Bank Bhd, AmInternational (L) Ltd and AmAssurance Bhd.
AmBank said it was a complete module comprising loss incident data collection, risk and control self assessment, key risk indicator, quantitative analysis for capital allocation and monitoring mechanism for senior management via the dashboard function.
It said the project cost over RM2 million for the group, inclusive of both hardware and software for the entire project implementation. The system is to be delivered in phases to the group under a nine-month project timeline.
“The selection of LIST, a leading business consultancy and software solutions provider on operational risk, demonstrates the AmBank group’s commitment to meeting global best practice in risk recognition, and risk management practices” said Charles Tan, chief information officer, AmBank group.
“One of LIST’s strong objectives has always been to enter into smart partnership programmes with our clients in consolidating resources, converging skills and sharing knowledge in operational risk management,” said Fabrice Le Calvez, sales director, LIST Group S.p.A.
Basel II is an effort by international banking supervisors to update the original international bank capital accord (Basel I), which has been in effect since 1988. The Basel Committee on Banking Supervision developed the current proposals with the aim of improving the consistency of capital regulations at an international level, make regulatory capital more risk sensitive, and promote enhanced risk-management practices among large internationally active banking organisations.
The Basel II framework consists of three pillars that seek to increase financial stability by better aligning a bank’s regulatory capital to the actual risk, by supervising this process and rewarding banks with lower risks profile.
The three pillars are:
1. Minimum Capital Requirements — specifies the determination of a bank’s capital requirements consistent with the level of risks taken.
2. Supervisory Review — a mandatory supervisory review of the methodologies and processes that a bank implements to meet the requirements specified in the 1st pillar.
3. Market Discipline — provides further support by insisting on a high degree of transparency, by obliging a bank to have a formal disclosure policy regarding its financial condition and performance.
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_e7042e37-cb73c03a-c8c7d600-b831620b
03-07-2008
KUALA LUMPUR: AmBank group has appointed LIST S.p.A, Italy as its operational risk management solutions partner for the group in preparation for compliance with more advanced approach of operational risk management under Basel II and Bank Negara Malaysia requirements.
In a statement yesterday, AmBank said the operational risk management system to be acquired, OpRisk Evolution, was part of the group’s efforts to enhance the risk management practices and meet Bank Negara Malaysia’s requirement.
It will be implemented mainly for the five major entities within the AmBank group — AmBank (M) Bhd, AmInvestment Bank Bhd, AmIslamic Bank Bhd, AmInternational (L) Ltd and AmAssurance Bhd.
AmBank said it was a complete module comprising loss incident data collection, risk and control self assessment, key risk indicator, quantitative analysis for capital allocation and monitoring mechanism for senior management via the dashboard function.
It said the project cost over RM2 million for the group, inclusive of both hardware and software for the entire project implementation. The system is to be delivered in phases to the group under a nine-month project timeline.
“The selection of LIST, a leading business consultancy and software solutions provider on operational risk, demonstrates the AmBank group’s commitment to meeting global best practice in risk recognition, and risk management practices” said Charles Tan, chief information officer, AmBank group.
“One of LIST’s strong objectives has always been to enter into smart partnership programmes with our clients in consolidating resources, converging skills and sharing knowledge in operational risk management,” said Fabrice Le Calvez, sales director, LIST Group S.p.A.
Basel II is an effort by international banking supervisors to update the original international bank capital accord (Basel I), which has been in effect since 1988. The Basel Committee on Banking Supervision developed the current proposals with the aim of improving the consistency of capital regulations at an international level, make regulatory capital more risk sensitive, and promote enhanced risk-management practices among large internationally active banking organisations.
The Basel II framework consists of three pillars that seek to increase financial stability by better aligning a bank’s regulatory capital to the actual risk, by supervising this process and rewarding banks with lower risks profile.
The three pillars are:
1. Minimum Capital Requirements — specifies the determination of a bank’s capital requirements consistent with the level of risks taken.
2. Supervisory Review — a mandatory supervisory review of the methodologies and processes that a bank implements to meet the requirements specified in the 1st pillar.
3. Market Discipline — provides further support by insisting on a high degree of transparency, by obliging a bank to have a formal disclosure policy regarding its financial condition and performance.
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_e7042e37-cb73c03a-c8c7d600-b831620b
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