While efforts can be made to strengthen the legal and supervisory framework, from the financial industry perspective, strong understanding of risks and effective application of risk mitigation, including commensurate application of the AML/CFT measures are critical for the meaningful conduct and practices of financial institutions. This is particularly important in the conduct of CDD and transaction monitoring that will facilitate strong financial intelligence and reporting, to achieve the enforcement objectives. Authorities are committed to continuously enhance the current legal and supervisory framework. At the same time, financial institutions and other reporting institutions must be robust in their current practices and compliance. Technological Development Everyone agrees that technological advancement is moving at a pace far greater than ever before. For the financial industry to maximise the overall benefit of this progress, we must acknowledge both the advantages and the risks of such rapid technological advancement while keeping abreast with the latest innovations. New devices, software, applications and inventions will continue to emerge. The challenge is for us to keep pace and ensure that industry players understand the potential benefits as well as the risk they bear. As the financial industry evolves into digital, it is inevitable that the industry becomes vulnerable to various new threats and risk factors, especially in the domain of financial crimes and terrorism financing. In the effort to mitigate these risks, it is important that we embrace technology and use it to our advantage in order to strengthen our defences against financial crimes and terrorism financing.

By 20192, cyber-crime could reach up to $ trillion, which is three to four times the total banking asset in Malaysia3. Domestically, we saw persistent increase in cyber security incidents reported to the Malaysia Computer Emergency Response Team with the majority of these cyber incidents being related to fraud and intrusion. The threat is imminent not only in the private sector, but also in the public sector. Enhanced security framework and proper mitigating strategy and action plan is vital in order to manage the risk and alleviate the impact of any potential attack. A research done in 2016 in the US showed that only 37% of the financial services industry have a Cyber Security Incident Response Plan. I believe that our financial industry needs to be in greater state of preparedness on this. Emerging Terrorist Financing Threats Terrorism financing continues to pose significant threat to the financial industry, with larger ramifications that reverberate to political stability and the loss of lives. Importantly, the terrorism financing threat continues to evolve alongside technology. While traditional methods such as mule accounts and cash smuggling continue to be the main feature of terrorism financing, terrorist organisations and actors have not been slow in exploiting new technologies and financial 2/4  BIS central bankers' speeches  products. Social media platforms, online crowdfunding websites and e-wallet services are increasing in popularity among terrorists to gather their resources, especially with the increasing trend in remote radicalisation and “lone-wolf” actors.