Before I conclude, let me again stress that the development of more inclusive financial sectors is an important objective, and as policymakers we need to pursue this without compromising on the prudential standards that sustain confidence in the financial system. Branchless banking has tremendous potential to increase the outreach of financial services provided the different players and regulators are able to work within common regulatory framework. And finally that we must adopt a collaborative stance in pursuing this important global agenda which can make a real difference for the millions of people that remain caught in poverty. 4  BIS Review 162/2009  On behalf of Bank Negara Malaysia I would also like to thank our principal facilitators for the workshop from the Consultative Group to Assist the Poor, the subject matter experts from World Bank, the representatives from Maxis Communications Malaysia and Global Exchange of Philippines, and the representative from Group Speciale Mobile Association who joins us from London. I also welcome the participation of the Alliance for Financial Inclusion in this Forum, and we look forward to working with all of you on developing more inclusive financial sectors in the Asian region. Finally, I would like to thank all the participants who have come in from all over Asia to support this Forum. I wish you a fruitful forum and hope that you will form valuable professional relationships during this event. BIS Review 162/2009  5
We believe that the industry is ready to build and expand its capacity in this area. While we are moving to being more risk-based, there is still a lot more to be done. This includes educating everyone in the industry that “risk-based” does not mean “total risk aversion”. While it is crucial to protect our financial system from being abused, it is also necessary for financial institutions to serve their roles and purposes in the economy and for the society. Accordingly, the new 1/3  BIS central bankers' speeches  regulatory framework demands reporting institutions to take greater ownership of their individual AML/CFT frameworks. Reporting institutions must strengthen their internal governance and controls to preserve financial integrity, not because Bank Negara tells them so, but because it is the right thing to do. This demands a high level of maturity by the industry. For individual institutions which have established a mature control environment, there will be greater latitude to design control frameworks in a way that is more operationally flexible. On the other hand, for individual institutions who are not quite there yet, the new framework raises the compliance bar, calling for them to strengthen awareness, governance and processes to ensure they have the capabilities to preserve integrity of the financial system. On this point, I wish to applaud the Financial Services Professional Board (FSPB) on its recent publication of standards on whistleblowing and on managing conflicts of interest.