For central banks and financial regulators, technological changes have far reaching implications – in particular on the structure of financial markets, banks and other financial institutions. Corporations around the world from every industry, origin and size, are directing enormous resources towards investments in technologies that are transforming the way they conduct business. The global annual spend on business technology is estimated to be close to $ trillion in 2019 . Of this, financial services firms rank in the top quartile of annual spend to revenue. Global investments in financial technology start-ups are reported to have chalked up another $ billion in the first half of 2019 , driven by a combination of interest and demand from consumers for new fintech propositions and the scaling up of challenger and collaborative fintechs. These developments raise important questions for the conduct of monetary policy, the management of payment systems, financial regulation and supervision, and even the very concept of money as the lifeblood of any economy. On many fronts, we find ourselves in unchartered territory – often uncomfortably so. In response, central banks and financial regulators are similarly expanding resources both to better leverage technology in performing our core functions of promoting monetary and financial stability, and to defend against its attendant risks. Central to both these goals is our ability to evolve – and in many respects, re-define – our governance, risk and control environment for the age of disruption. Why is this necessary?

Because new financial technologies are presenting significant opportunities, but also enormous challenges for central banks and financial regulators. 1/4  BIS central bankers' speeches  They hold out the promise for achieving broader and more inclusive access to financial services, characterised by greater speed and convenience, and lower costs. The emergence of new financial institutions and multiple payment systems could dramatically improve financial intermediation and reduce concentration risks. Greater access to data also carries tremendous value for better surveillance and policymaking. However, these developments also carry with them new risks and challenges – from more interconnected systems through which risks can transmit in and across organisations and financial systems; to concerns associated with privacy, misinformation, security and criminal abuse. Moreover, as financial systems continue to undergo major technological transformations, their resilience remains largely untested during periods of crisis. Technological disruptions will continue to push the limits of our ability to identify and pre-empt risks. This will also increasingly place authorities who are responsible for financial stability, at odds with a desire to encourage and not stifle innovation. Managing this balance will require us to approach governance, risk and controls with fresh lenses. For Bank Negara Malaysia, this has entailed a number of strategic imperatives. The first has been a sharper focus on strengthening regulation and supervision to promote resilience. The Bank recently published new standards on risk management in technology for financial institutions and strengthened our expectations on the management of outsourcing risks by firms.