5.1.2 If one financial institution experiences problems today, given the interrelated transactions, it could lead to a systemic issue which will result in the entire system suffering. Therefore, it is equally important to use peer pressure to get weak or prodigal institutions to comply with regulatory instructions and directives. So, it is everybody’s responsibility to ensure that outliers are brought on to the desired path. 5.1.3 Clearly, training and consulting remain very important, especially to change the mindset to a more committed one. All stakeholders need to understand why GRC should be  BIS Review 15/2008  5  implemented as a package and the benefits attached to it, from the point of view of the institution as well as its clients. 5.2  Leveraging on technology  5.2.1 Technology is a critical factor, which facilitates efficiency and effectiveness in the GRC processes. A real time risk, compliance and monitoring environment enables financial institutions to ensure that risks are being managed and disruptive events are being acted upon. Therefore, technology integration across the financial institution would enable institutions to gain more timely and reliable regulatory compliance, more efficient use of IT systems, and lower cost on development and maintenance of software applications. Many organizations that apply GRC best practices have understood that service-oriented architecture (SOA) is more appropriate, as it would promote GRC integration while securing the highest value that IT can offer.

The new entity will be termed licensed International Islamic bank. The business that the licensed International Islamic bank would be allowed to undertake includes the wide-ranging business of Islamic commercial banking, Islamic investment banking and Islamic leasing in international currency. iii. Third, Bank Negara Malaysia will also issue new conditional registrations under the Takaful Act to qualified foreign and Malaysian insurance companies to conduct the full range of takaful business in international currencies. Similar tax treatment will be accorded to these entities as that for the banks. The new entity will be termed International Takaful Operator. iv. Fourth, the Labuan offshore Islamic banks and the Islamic divisions of the offshore banks as well as offshore takaful operators will be given greater flexibility in their business operations by allowing the opening of operational offices anywhere in Malaysia with no limitation on staffing, to conduct non-ringgit business while maintaining their presence in Labuan. This measure would be accorded to the six existing offshore Islamic banks and Islamic investment banks operating in offshore centre Labuan to participate in the MIFC. v.  Fifth, incentives will be given to attract the best foreign talents and market players to the MIFC to spur innovation and offering of attractive Islamic financial instruments. This is to further strengthen the large pool of highly trained workforce with vast experience in Islamic finance already in Malaysia. Further incentives will also be introduced to spearhead the aspiration of developing Malaysia as a centre of education excellence in Islamic finance to complement the MIFC. vi.