In our recently published Financial Sector Blueprint, we stressed the need for strengthened cyber security readiness and responsiveness – not just within the financial sector, but across the whole chain of financial services. This includes third party service providers like telcos and cloud providers. After all, the defences against cyber threats are only as strong as the weakest link in that chain. An ongoing, critical priority for Bank Negara Malaysia and financial industry is to ensure our banking and payment channels remain secure and are equipped with the latest security controls and fraud risk management capabilities. Bank Negara Malaysia has issued multiple security advisories to the industry on modus operandi of latest frauds and additional countermeasures, and will continue to update regulatory requirements to take into account new risks. For example, to further strengthen security measures for online transactions, banks will be required to migrate from SMS-based “one-time passwords” to more secure, multi-factor authentication methods, for certain transactions. By their very nature, frauds and scams will continually seek to find ways to circumvent efforts to eradicate them. Bagai cendawan tumbuh selepas hujan. This means that in our efforts to combat scams, we continue to navigate the need to ensure the strong security measures against potential threats, without excessively increasing frictions that would affect the convenience of, and access to online financial services. For us to achieve this outcome, we also need customers to take steps to protect themselves against evolving threats.
The potential costs of the support measures taken – capital injection, asset purchases, and guarantees of bank debt – in the G7 countries together with Australia, the Netherlands, Spain and Switzerland amount to about twenty per cent of GDP in these economies. 1 Moreover, the consequences of the crisis in terms of job, output and wealth losses, unprecedented increases in public spending and declines in public revenues are enormous. In the end, the citizens of the individual countries involved will have to foot the bill, one way or another. Arguably the most important intangible cost, however, is the fact that governments had to issue an explicit guarantee for systemically relevant institutions, in effect executing a partial government take over of the financial system. 2 Going forward, the world of finance will not be the same anymore. It should therefore come as no surprise that at the national and international level intensive efforts are underway to increase the resilience of the financial system. In recent months, these international reform efforts have included the presentation of many reports and recommendations. The Financial Stability Board (FSB) has published two comprehensive sets of recommendations to improve financial regulation. 3 Both have been endorsed by the G20 leaders. The public sector has not been alone in issuing  1  The outlays totalled eight per cent of GDP. These figures relate to government support measures introduced between September 2008 and June 2009. Source: “An assessment of financial sector rescue programmes”, BIS paper No 48, July 2009.