Ladies and gentlemen, While the efficiency of electronic means of doing banking is valued, the basic tenet of banking services that is providing security and safety still remains. The potential benefits from electronic delivery channels need to be exploited without undermining the security and confidence of the banking public. The challenge to providing multi channel services in today’s banking is the ability to integrate and interface the different delivery channels. Multi channelling strategies therefore needs to be approached holistically. BIS Review 22/2003  1  Technological development is not only about creating alternative delivery channels, but it is also redefining the financial landscape. Indeed, as a result of significant innovations in technology, the payments industry landscape will be redefined with the entry of non-banks into payment services once thought to be the domain of banks. Banks need to be more proactive in their role in the payments mechanism. This includes continually finding new effective ways to provide the payment services in a cost-effective, and efficient manner by taking advantage of technological advances and meeting the changing demands of businesses and consumers. Banking institutions need to innovate to reach potentially new markets and consumers. It is not just about web enabling existing products and services but also being able to provide the complete financial services required by consumers and businesses. It is also not just about implementing technology solutions but being able to customise the product offerings to our local requirements and preferences.

A corroborative effort involving both public and private sectors, through a public-private partnership, is key, especially in Asia. This is in light of the large size of risks to be insured, the substantive size of population which needs insurance cover but remains unreachable, and the lack of natural incentives for the private sector to offer sufficient coverage for certain risks. A PPP approach recognizes the different roles as well as limitations of governments and private insurers, and can enable innovative solutions collectively. Public-private financing solutions, such as natural catastrophe insurance pools, micro insurance, and alternative risk transfer solutions such as catastrophe bonds, have the potential to enlarge the financial capacity of insurance solutions, by providing affordable cover to a wider pool. With the expertise and capital  BIS central bankers’ speeches  3  support from international and regional organisations, the public and private sectors can work together in developing purposeful risk transfer solutions for the region. 12. It is encouraging that governments, regulators, industry, academia and international organisations in Asia have already taken initial steps to develop effective PPPs to enhance natural catastrophe risks management. In October last year, for example, the International Finance Cooperation (“IFC”), a member of the World Bank Group, announced a partnership agreement with MAIPARK Indonesia, a specialised catastrophe reinsurer formed by the government and industry, to develop an earthquake-index insurance product to help protect banks that provide loans to individuals and micro, small and medium enterprises from losses due to natural disasters such as earthquakes6.