Over the years, we have put in place various arrangements to enable smooth information flows between the financial sector and the law enforcement community, within a controlled environment. These “public-private partnerships” (PPP) are vital as they allow the financial intelligence unit, law enforcement agencies and reporting institutions to leverage on intelligence-led collaboration and information sharing to detect financial crime and terrorism financing. This will further support investigation and prosecution processes. For Malaysia, our goal is to formalise and further deepen what we have built over the years. As such, I am pleased to announce that the PPP will be officially launched shortly by our Prime Minister. I wish to also express my appreciation to other participating agencies in the PPP namely Polis Diraja Malaysia, the Suruhanjaya Pencegahan Rasuah Malaysia, Jabatan Kastam Diraja Malaysia and the Securities Commission Malaysia, and also the 18 reporting institutions. Second, reporting institutions must accelerate efforts to further expand and develop their AML/CFT toolkit to deal with new and emerging risks. At our end, Bank Negara is in the process of reviewing our AML/CFT policies. A key outcome of this review is the move of our regulatory framework towards being more “risk-based” and “principles-based”. We have come a long way since the AMLA was gazetted in 2001. Since then, reporting institutions have matured in understanding and have fully implemented the regulatory requirements. This is also supplemented by the issuance of various guidance, technical notes and updates on regulation.

By working together to set and voluntarily commit to baseline standards, the industry can demonstrate its readiness for a more risk-based regulatory approach. I hope that the industry will adopt these standards and this means moving beyond symbolic gestures, to the diligent implementation of policies and programmes that promote the desired culture. Bank Negara is also committed to ensuring that regulatory requirements support the country’s digital economy agenda. We are in the midst of developing e-KYC policy guidance to streamline practices of industry players in leveraging new technology. The guidance will clarify desirable outcomes of e-KYC adoption, and set out best practice as well as standardised parameters to measure effectiveness of e-KYC solutions. Our hope is that with its promise of seamless digital on-boarding of customers and lower costs, increased prevalence of e-KYC will help increase competition while also advancing the financial inclusion agenda – and this must be done without compromising on financial integrity outcomes. We will consult the industry and other relevant parties through the publication of an exposure draft early December this year. Third, we must strengthen our defences in view of new risks and changing environment. Recent years have seen authorities across the globe intensifying action against financial institutions for harbouring criminal activity. We see multi-billion dollar fines and all forms of regulatory sanctions, with some facing the threat of closure. On our part, Bank Negara will continue to use supervisory levers to sustain positive changes and drive improvements in the compliance culture in the industry.