Kuala lumpur: Bank Negara Malaysia's (BNM) supervisory framework should evolve to become more collaborative and consultative with the financial industry, including greater use of regulatory sandboxes, said former BNM deputy governor Datuk Ooi Sang Kuang. Ooi emphasized the need for the framework, which is an instrument used to maintain a stable and credible financial system, to adapt to the challenging needs of the economy.

According to BERNAMA News Agency, Ooi suggested that the framework needs to be modified so that, instead of being prescriptive, instructing banks on their actions, it can become more collaborative. He highlighted the importance of identifying risks through discussion and potentially employing sandbox environments to address them. During the plenary session titled 'Resilience: Implications for Policy and Practice' at BNM's Sasana Symposium 2026 (SS2026), Ooi expressed the need for a shift from a directive approach to a consultative one.

Ooi noted that the current risk-based supervisory framework, developed after the Asian Financial Crisis, should place greater emphasis on collaboration between regulators and financial institutions to manage risks associated with emerging industries. He warned that maintaining the same approach without flexibility could hinder the growth of new industries requiring innovative financing models.

He emphasized that the new growth industries possess unique risk profiles, and adhering to the existing framework could impede their development. Ooi advocated for strengthening collaboration between regulators and the financial sector to enable better risk assessment and management, aligning with Malaysia's broader economic transformation and innovation agenda.

Themed 'Reforms for Resilience: Navigating Uncertainties', the SS2026, held from July 28-29, features discussions on key economic and financial issues, including economic resilience, wages, cost of living challenges, investments, energy security, Islamic finance, and private healthcare costs.