Need to provide secure framework in technological innovation

KUALA LUMPUR: There is a pressing need for the financial industry and nation to provide an enabling and secure framework for technological innovation, said Bank Negara Malaysia (BNM) governor Datuk Nor Shamsiah Mohd Yunus today.

Citing an example, she said, the need to formulate a cohesive, coherent and comprehensive national strategy on cybersecurity is urgent.

Nor Shamsiah

“We can only play our intended role to support the broader economy if we are attentive to both strategic and operational considerations of risk,” she said when opening the inaugural MyFintech Week 2019 here, today.

The world as was pointed out by her had shifted dramatically and urged to pay attention to five megatrends.

The five megatrends according to her, related to the shift in global economic order with the rise of Asia, risk of climate change, rising income inequality, rising populism and protectionist policies as well as the advancement of technology.

Increasing reliance on technology according to the governor, presented risks that could not be ignored including on issues of data privacy, discrimination or biases and displacement of certain segments within society.

“In the digital age, higher order risks of cyber-attacks and operational disruptions are magnified in ways that we have yet to fully comprehend.

“Therefore, as we consider the future of finance, we need to contemplate not only how these megatrends may impact finance, but how finance itself can respond to and shape these trends in more positive ways moving forward,” she said.

Nor Shamsiah also stressed that the central bank was committed to playing a facilitative role to enable innovation to flourish.

“Like any financial institutions, we need to balance the significant benefits of financial institutions with its risk.

“We are also mindful that the calls we make in regulating and supervising the industry can themselves, restrain innovation,” she added.

Finance according to her, must be relevant to the needs of the economy and it must offer suitable, cost-effective and quality financial products and services for all segments of society.

It must also respond to the changing demographics and structure of the economy, she added.

“To be safe, finance must not sow the seeds of its own destruction and not serve as an amplifier of risk to the economy.”

The governor noted that the ability of finance to mobilise capital, create leverage and distribute risk-taking created instability which was harmful not only for the particular firm but the economy and society at large.

There was also a greater need for finance to be socially responsible said Nor Shamsiah.

She highlighted that financial institutions must assert the much-needed leadership in a world where continued neglect of equitable development and a rapidly deteriorating environment displaces communities, raising social and political tensions as well as putting future generations at risk.

MyFW2019 which will end June 21, is held in conjunction with Malaysia Digital Economy Corporation’s Malaysia Tech Week 2019.

It aims to promote growth and diversity in the fintech ecosystem, spur digital transformation of financial institutions, drive responsible innovation in fintech and elevate public acceptance of fintech.

With the theme “Shifting Tides: Future of Finance”, MyFW2019 will focus on five key areas including cybersecurity, Islamic finance and Insurtech.