5  These efforts should pave way for faster and cheaper transaction and validation, making the entire system more efficient. Let me now turn to the legal side of our financial infrastructure. Regulations must keep up with the fast-moving financial innovations. To create an environment inducive to financial innovations, the Bank of Thailand introduced a regulatory sandbox framework which allows financial institutions to test new financial technologies in a limited scale to ensure that operational risks are contained, and that proper regulatory framework is put in place before the technology is deployed to the public. In addition to the regulatory sandbox, regulatory guillotine is another approach the Bank of Thailand has adopted to revise and, in some instances, revoke laws and regulations to make them relevant in today’s context and reduce unnecessary legal costs for everyone. I should also note that in April of this year, the new Payment Systems Act became effective. The Act unifies previously fragmented payment laws and regulations and enables us to oversee the development of Thai payment systems in a manner conducive to new payment innovations. On the external front, we introduced the Foreign Exchange Regulation Reform to make cross-border financial transactions more flexible and efficient. We have also made arrangements with regional central banks to support the use of local and regional currencies in trade and investment. These initiatives will help reduce transaction costs and mitigate exchange rate risks in today’s volatile financial market. Ladies and gentlemen, In this challenging global landscape, complacency is costly and could be dangerous.

Not only will this provide a deep pool of highly trained and capable employees, it will also further promote the innovation of Islamic financial products and services. In a dual financial environment, neutrality in treatment between Islamic and conventional financial products is important in order to create a level playing field. It also sets the stage for greater innovation to take place to support the development of the Islamic financial services industry going forward. With the strengthened and robust Islamic financial infrastructure firmly achieved in the first two phases of the FSMP, the Islamic financial services industry is poised to tap new growth opportunities and grow to its full potential. This will inevitably increase the breadth and depth of the Islamic financial market and, more importantly, strengthen Malaysia 's position as an attractive and dynamic international Islamic financial centre. In preparing for the pressures of liberalisation and increased competition, continuous review of the regulatory framework and their implications on the efficiency and an environment conducive for innovation is taken into consideration. The cost and benefits of regulations are carefully weighed to ensure a well-balanced regulatory framework that meets prudential objectives yet remaining relevant and adaptable to the changing environment. Premised on this, the prudential framework is evolving towards a predominantly principle-based regulatory approach. The underlying flexibility inherent in the principle-based approach would involve a regulatory framework that relies more on market discipline, where the market will be entrusted to allocate resources and risks, with greater reward for prudent practices.