The lessons we learnt imply that leaders must recognise and align their priorities to steer their respective institutions to contribute more broadly and strategically to economic development. This will include playing a more active role in technical assistance, and serving as key repositories of specialist knowledge, resource aggregators for strategic development projects and credible advisers to the Government. These ‘additionalities’ are important ingredients in ensuring the effectiveness of development financial institutions. Strengthen accountability frameworks through performance standards that emphasise development additionalities While the notion of additionalities is not new, their link to how the development institutions are managed and governed remains generally weak. As a result, their important contributions are often not translated into tangible outcomes that are seen and felt by the stakeholders and the public at large. This leads me to my second point. Traditionally the achievements of development institutions have always been measured predominantly by the volume of financing provided to the targeted sectors. There are several reasons for this. Non-financial development additionalities are harder to quantify the cause and effects are also not always clear. As such, more effort and investments are required to collect the data for measuring socio-economic and development outcomes that are associated with such programmes. However, this must not hold back efforts for us to do better. They are a major channel for directing development, both at an international and domestic level. It is therefore, imperative that there is confidence in the effective and efficient use of funding aid to achieve the intended development goals.

Cultivate a strong culture of innovation within to increase value-add and catalyse private investment Development institutions should be leading innovators in providing solutions to stimulate investment and entrepreneurship especially in uncharted sectors. In my view, a key part of their contribution to development has to be in evolving non-traditional approaches to encourage investments in targeted sectors, precisely because conventional approaches have not responded adequately. Indeed, they should be providing the richest environment for adaptive learning, creativity and innovation to effectively serve their mandates. Innovation is also being supported through a “test and learn” approach which allows for experimentation by financial institutions in close coordination with regulators. This approach promotes a deeper understanding of risks inherent in new solutions and products, and the appropriate ways to control them. The introduction of the regulatory sandbox in several countries, including Malaysia, to support regulatory flexibilities for the deployment of FinTech reflects such a “test and learn” approach. Development financial institutions should use technology to advance the cause of their mandate. To be innovative, development financial institutions must be able to attract and retain good leadership and talent. KfW in Germany and Business Development Bank of Canada (BDC), two global development financial institutions, were recognised as being among the top 100 employers in their respective countries in 2017. Well-designed talent strategies, and an environment that nurtures experimentation and adaptive learning with appropriate oversight and controls are key. These require bold and visionary leadership.