Asian banks already have the advantage of deep understanding on local and regional market conditions and are relatively well-capitalised, an outcome of comprehensive reforms undertaken in the wake of the Asian financial crisis. They are therefore well-placed to seize new opportunities that emerge in the region. Financial institutions that can develop the right capability to execute the right strategy will be availed with the potential of positioning  2  BIS central bankers’ speeches  themselves ahead in the race of being Asia’s Premier banking player, and even position themselves as global force. To move markets into the next phase of growth, financial institutions must be willing to innovate and improve offerings in new growth segments. This has to be supported by good risk and capital management practices, or even develop entirely new skills to embrace new technology and business models. Moreover, Asia’s local banks with the aspiration to expand their regional or global footprint will need to develop talent to enhance their capacity and capabilities to compete beyond borders. This changing landscape should see the level of technical expertise, and skilled resources in the industry advance to new heights. The rapid pace with which change is occurring is not only demanding shorter time to competence, but also heightening demand for professionals with a broader range of skills including leadership and interpersonal skills as well as global business acumen. It is with this in mind that we advocate for professional development standards to be raised.

The region will also be faced with an ageing population in the years ahead. With rising affluence, coupled with the need to achieve higher levels of income to support the increasing longevity, Asian consumers will increasingly demand innovative, better quality financial products and services. At another end of the product spectrum is the scope for enhancing financial inclusion and reducing inequality for the traditionally underserved, such as poor households and small and medium-sized enterprises (SMEs). To unlock the potential of this segment as a driver of growth not only requires product innovation that delivers cost-effective, high-quality and innovative instruments, but also the use of new business model and technology to expand the reach of financial services, especially in poor and remote areas. Second, the strong growth of Islamic finance across Asia in the recent years is another trend that is characterising the region. This dynamic segment will continue to offer strong growth  BIS central bankers’ speeches  1  prospect going forward, backed by its increasing importance as a tool for enhancing financial inclusion and reaching out to the underserved segments, the growing demand for sociallyresponsible investment and ethical financial services in this post-crisis era, and the increase in the wealth of individuals in Asia. Islamic finance has also proved to be a competitive and innovative financial intermediation channel that could strengthen global financial and economic linkages, led by the high growth segment of the sukuk market which has now become an important avenue for international fund raising and investment activities.