Shorter transaction chains: Expanding direct access to non-bank PSPs, FMIs and foreign banks will reduce the number of intermediaries involved in a cross-border transaction, thereby making payments quicker and more transparent. 2. Enhanced competition and lower cost: Expanding access can level the playing field between banks and other PSPs and foster greater competition and innovation to give customers a greater choice of services and potentially lower prices. 3. Improved financial stability due to reduced tiering risk: The risk of spillovers of a direct participant’s default due to the transactions of indirect participants decreases. Page 5  These benefits needs to be balanced against risks such as additional counterparty credit risk and operational risk that central banks needs to be aware of and safeguard against when considering expanding access. The report discusses how these can be mitigated, for example setting minimum standards of resilience and security, and how to overcome potential barriers such as national legislation. How extending RTGS operating hours across jurisdictions can help improve cross-border payments The Building block 12 report examines RTGS operating hours. Limited RTGS operating hours across jurisdictions can lead to a delay in cross-border settlement, especially between countries with significant time zone differences. The report identifies the current “global settlement window”, between 06:00 to 11:00 (UK time) when the highest number of RTGS systems across jurisdictions are concurrently open allowing cross-border transactions to settle across those jurisdictions without delays.

The changing priorities and lifestyles of this new generation, growing wealth and increasing proportion of middle income population will also support continued and further growth in demand for investment-linked and wealth management products. As a result, the insurance industry has, and will continue to, expand its role beyond merely providing protection products. Against this backdrop, prospects for increasing the insurance penetration rate in our economies are clearly positive. However, this will hinge on the ability of the industry to respond to these changing demographics and dynamics in the financial system. In 2006, the insurance premiums averaged 2.95% of GDP in South East Asia as compared with 8.8% in the U.S. or 16.5% in the U.K. Compared to the  BIS Review 134/2007  1  banking sector, the insurance industry remains relatively less developed and commands a significantly smaller percentage of the total financial assets of the region's financial system. To tap these opportunities, appropriate strategies, new thinking and approaches will be required. In this regard, a significant development has been the evolution of alternative distribution mechanisms for insurance products and services in the region, notably through bancassurance. Indeed, bancassurance has developed in a number of ASEAN markets into a viable alternative distribution approach to the traditional agency force. Perhaps, in those markets where the insurance distribution channels through agency force have yet to be firmly established, bancassurance could provide a quantum leap to allow insurers to rapidly widen their outreach by tapping into an established banking network and client base.