KUALA LUMPUR, May 27 — Bank Negara Malaysia (BNM) has introduced a new initiative to redesign product disclosure sheets (PDS) for loans and credit cards, using behavioral psychology to make them more user-friendly. The central bank aims to address the common issue of consumers skimming through dense, technical documents without fully understanding the terms.
According to BNM's official statement, the redesigned PDS will feature clearer language, simplified layouts, and visual cues such as icons and color coding. These changes are based on insights from behavioral science, which suggest that reducing cognitive load can improve comprehension and decision-making. The initiative is part of BNM's broader Financial Inclusion Framework 2025-2029.
BNM Governor Datuk Abdul Rasheed Ghaffour stated that the goal is to empower consumers to make informed financial decisions. The new PDS format will be mandatory for all banks and financial institutions starting January 1, 2027. Early trials showed a 30% increase in consumer understanding of key terms like interest rates and late payment fees.
Consumer groups have welcomed the move, noting that it could reduce disputes and defaults. However, some experts caution that the effectiveness will depend on consistent implementation across the industry. BNM plans to monitor compliance and gather feedback to refine the format further.
