1/5  BIS central bankers' speeches  Indeed, the various measures that were implemented have been instrumental in accelerating the e-payment agenda forward, only because of the cooperation of the industry, sometimes with a bit of nudging. But truth be told, we have been able to achieve so much. Today, the payments industry is no longer the exclusive domain of banks. The advent of FinTech driven by the increasingly inexpensive and pervasive internet and mobile technology has encouraged the entry of more agile non-bank players as potential disruptors or collaborators of the incumbent players. This has set the stage for an exciting new era in payments, an era in which the industry is expected to take on a larger role in delivering a more robust and efficient payments system for Malaysia. The Bank will facilitate this in three key ways: i. First, through policy initiatives to encourage collaborative competition or ‘co-opetition’; ii. Second, by further strengthening industry alignment; and iii. Third, by supporting more inclusive governance arrangements for the development of the payment system. Policies to promote co-opetition as a key enabler for greater efficiency, competition and innovation Network effects are critical to an efficient payment system. The larger the network of a payment system, the more valuable it is to users of the payment system.
The problem in many cases of the less developed economies is that firms and households tend to regard foreign assets as the habitat of first choice for any savings, reluctantly accepting domestic instruments as an - often enforced - alternative. The aim of the authorities must be to make domestic instruments the first choice, leaving foreign assets as the route towards subsequent more sophisticated or mature portfolio diversification. In this way, dependence on foreign inflows can be reduced, although there will always be an important and necessary role for them, especially in view of the technology and know-how transfer which may accompany them. The 1997 Asian crisis, along with various subsequent problems with liabilities to foreign investors and lenders, have once again highlighted the vulnerabilities and volatilities which may be associated with overdependence on foreign capital, particularly that which is structured as debt. Yet in many countries there appears to be, as I have tried to demonstrate, a high rate of domestic saving which, if kept more at home and if, ideally, permitted to find a haven under the pull of market forces, could satisfy part of the funding needs for which foreign finance has in recent years been used. Of course, not all countries enjoy a high savings rate in the first place and there may often be a need to encourage more domestic saving. But that question goes beyond the scope of my focus today, which is on what happens to those savings rather than on their scale itself.