Malaysia financial firms lag in AI scaling, report finds

FIDE FORUM and Accenture Malaysia have published a report on AI adoption in Malaysia's financial institutions, finding that few have scaled AI across their organisations.

The research found that 71% of surveyed Malaysian banks had implemented at least one AI application, but only 17% of financial institutions had scaled strategic AI initiatives. None of the insurers surveyed had successfully scaled a strategic AI initiative, and none of the participating institutions had achieved full enterprise integration of AI.

That gap between initial deployment and wider use sits at the centre of the report, which examines how boards can influence AI strategy, governance and organisational readiness. It argues that many firms remain stuck in fragmented pilot projects that have not produced measurable business results at scale.

Malaysia's broader policy push on AI forms the backdrop to the findings. The report places the financial sector's progress alongside national initiatives, including MADANI, the National Artificial Intelligence Roadmap, the New Industrial Master Plan 2030 and the National AI Office.

The study identifies several barriers to broader adoption, including shortages of AI talent, legacy technology systems, governance weaknesses and limited AI literacy at the board level.

It also sets out the financial case for wider implementation, estimating that scaled AI adoption could lift pre-tax profit at Malaysian financial institutions by as much as 16%, or about USD $1.8 billion in additional value creation.

AI could also contribute about USD $113 billion to Malaysia's economy, equivalent to almost one-quarter of the national GDP, the report said.

Board role

The report frames AI not simply as a technology issue, but as a board-level leadership matter. Its recommendations focus on four priorities for directors: scaling strategic AI investment to deliver measurable business outcomes, reshaping talent and workforce skills, building digital infrastructure to support broader deployment, and putting responsible AI governance in place.

Gobind Singh Deo, Minister of Digital, addressed the issue at the report launch.

"As AI becomes increasingly embedded across the financial sector, the role of boards must evolve alongside it. The challenge is no longer whether organisations should adopt AI, but how they can do so in ways that strengthen competitiveness, enhance productivity and maintain public trust. Strong leadership, sound governance and continued investment in talent will be critical to ensuring that AI delivers long-term value for institutions, customers and the broader economy."

Datuk Kamaruddin Taib,  Chairman of FIDE FORUM, said the findings showed that leadership from directors would determine whether institutions could move beyond early experiments.

"Artificial intelligence is no longer a future consideration; it is a strategic imperative. While many financial institutions have already embarked on their AI journey, our research shows that the next phase of AI adoption will depend on the ability of boards to provide strategic direction, effective governance and organisational leadership.

"The successful scaling of AI requires boards to move beyond oversight and play a more active role in shaping strategy, governance, talent development and organisational readiness. Those institutions that succeed will be the ones whose boards provide the leadership necessary to translate AI ambition into sustainable value creation.

"Ultimately, AI is not fundamentally a technology issue. It is a governance and leadership issue that demands active engagement from the board."

Scaling challenge

Lokesh Sharma, Data & AI Lead, Accenture Malaysia, said the issue for the sector was no longer experimentation, but the ability to extend AI into core processes and decision-making.

"AI is no longer limited to experimentation. To realise its full potential, financial institutions must scale strategic bets across core processes, strengthened by capabilities in data, platforms and responsible AI governance.

"Yet in Malaysia, while institutions are actively deploying AI, none have achieved full enterprise integration, where strategy, core processes and technology capabilities operate as a coherent system. The challenge now is turning early adoption into enterprise-wide value, which requires strategic choices on investment, capability building and accountability.

"That is why boards matter. Their authority uniquely positions them to shape the strategic, financial and governance choices required to scale AI across the enterprise."

The event in Kuala Lumpur drew board directors, regulators, policymakers, financial institutions and technology executives, reflecting growing attention to AI governance in financial services. The study is positioned as one of the first board-focused research efforts to examine AI adoption and governance in Malaysia's financial services industry.

Its central finding is that adoption alone has not translated into transformation. Most institutions still lack the operational, governance and leadership changes needed to embed AI across the business.