As a rapidly growing region, greater regional financial  2  BIS central bankers’ speeches  integration will support the more effective and efficient intermediation of Asia’s sizeable funds towards meeting the investment opportunities of the region. Efforts to enhance cross-border financial linkages and advance financial integration have also intensified in Asia in this decade, mainly through the progressive liberalization of the financial sector, the pooling of resources to promote the development of domestic capital markets and the integration of payments and settlement systems. These developments have also seen the growing presence of Asian financial institutions in the region. In 2011, central banks in the ASEAN region have endorsed an ASEAN Financial Integration Framework which will pave the way for greater market access and operational flexibility for qualifying financial institutions. This represents the collective commitment of the region in the efforts to strengthen the region’s capacity to intermediate regional and international financial resources to productive activity in the region. A third imperative is the alignment of the financial sector to Asia’s demographic trends. Demographic profiles vary widely across Asia and have a significant impact on economic potential of the region. For many parts of Asia, demographic developments foreshadow significant changes in consumption, health and educational patterns. These changes have reinforced the significance of domestic sources of growth. Asia’s rising domestic demand has been supported by the development of a much broader range of financing options.

A critical aspect of cybersecurity is the need for banks to adequately invest in safeguarding their systems and platforms by training their employees on how to identify potential cyber-attacks, mitigate vulnerabilities, and escalate issues appropriately. Moreover, to address potential insider threats, banks must establish and maintain robust protocols and controls in managing employees’ access to the firm’s systems and databases. Ensuring that sensitive firm data, personal information, and critical infrastructure are accessible only to those trusted employees who need access is vital to guard against accidental or intentional data loss, theft, or damage. 3/4  BIS central bankers' speeches  Supervisors expect that institutions create a strong risk culture around access control and vendor management. Employees are banks’ first lines of defense against cyber vulnerabilities, so investment in employee training is critical. By raising awareness about potential threats and vulnerabilities, a bank can equip employees with the knowledge and judgment to recognize attacks such as social engineering and mitigate the impact. In addition, training can reduce the probability that an employee will unintentionally cause a breach. For example, we have seen deficiencies due to weak internal controls and policies and procedures, which have led to increased exposure to cybersecurity risk. Institutions are expected to ensure service providers comply with applicable regulations that are consistent with safe and sound banking practices. Closing I’ve outlined three major, transformative changes and trends that all of us in this room— community bankers, regulators, and supervisors—are currently facing.