Safeguarding the interests of consumers without stifling innovation remains one of the most difficult balances to achieve for regulators. Regulators are constantly trading off considerations of privacy against efficiency; fragmentation against competition; access against risks of abuse. In the digital age, these trade-offs become impossible without equipping consumers with the information, knowledge and tools that they need to protect themselves and make decisions that are in their own best interests. It is only through a complementary mix of appropriate but not excessive regulation, and enlightened and confident consumers, that we will find the right balance of guiding the development of digital financial services so that it is neither hurried nor hampered, and remains sustainable and well-functioning to promote financial stability and inclusive growth. For Bank Negara Malaysia, our regulatory agenda is supported by a long-standing focus on financial education. This year, I am pleased to share that this has been elevated to a nationallevel priority with the launch of Malaysia’s first five-year National Strategy for Financial Literacy. A key focus of the strategy is helping consumers protect themselves against fraud and exploitation, and embrace innovation more confidently in the digital era. This needs to start with the young, but without neglecting those for whom the digital world is both unfamiliar and daunting. Specific challenges in a digital era Let me just mention a few of the specific challenges that financial services authorities will have to contend with in the digital era.

2/3  BIS central bankers' speeches  Increasing incidents of data abuse on social media platforms, security breaches and cybersecurity threats can sow mistrust and confidence deficits in digital systems. In our respective markets, these incidents are likely to reveal gaps in existing data protection and consumer protection regimes and the need to explicitly address ownership rights and permitted uses of personal customer information. Prospects of digital profiling, and decisions driven by the use of complex algorithms can also result in financial consumers being unfairly discriminated against or targeted by unsolicited and unscrupulous marketing campaigns. Rather than delivering on its vast promise, digitalisation could instead become a polarising and divisive instrument. Take the provision of online credit, for example, the use of algorithm-based online credit scoring tools have led in some cases to assessments that are gender-biased, with female candidates consistently assigned lower credit scores compared to male counterparts of equal financial standing. Behaviourally, there is in fact evidence in Malaysia and likely elsewhere, to suggest that the opposite is true. We can and must do better. Proportionate laws and regulations must be in place to hold financial service providers accountable for establishing effective safeguards against the theft or abuse of personal data, and discrimination or unfair practices. The focus on consumer protection needs to shift from just addressing customer touchpoints, to the consideration of consumer needs much earlier in the product design process, in the formulation of distribution strategies or in the setting of risk limits.